Business zen: Reading the market

Russell Bell

LAST week a big decision was made that will impact us all in one way or another. Whether it was a good one or not will be evaluated in the fullness of time but it is an example of the power that decisions carry.

Decisions are key in business and life, and can have a profound impact on how successful, or otherwise, you and your business become. And because each of us have different backgrounds and can see things in a different way, we may choose different solutions to the same problem.

How do we make the right decisions for our business?

It's all about information and experience, which in turn, hopefully, create knowledge and wisdom. I also believe in trusting 'gut instinct' but believe that this is our subconscious processing the information we have based on our 'experience memory'.

Where decisions tend to go wrong is where information is not complete and accurate, or you do not have the experience to recognise a trend or developing situation. Too often you hear of business failures where assumptions were made or the market moved in a way that caught the business owner out.

Risk crystallizing in this way can be mitigated through having robust information, management processes and advisers with the experience that you may not have in full. Last week I talked to a client about establishing an 'advisory panel' - the panel to be populated by businesspeople with skills and business experience, which filled gaps in this owner's experience. For example, marketing may be an area of weakness so the panel would include a marketing expert.

It's much the same concept as having a business mentor, and if you don't have one I recommend that you find one.

Even the smallest amount of advice could be the key piece of information that will transform a potentially incorrect decision into a good one.

Of course there are always unexpected events that are difficult to gather complete and accurate data about and near impossible for any advisor to warn you of. However, even in these circumstances, indicators are out there. For instance, the 2008 housing bubble bursting gave rise to the "mother of all recessions" and I recall reading an article on this very scenario way back in 2006, years before Bear Sterns and Lehman Brothers.

So it's important that you critically assess the current state of the information and advice that feeds your business decisions.

If you find that you are experiencing a 'run of bad luck' in sales it may be that you aren't asking your customers the right questions. If you have a cashflow problem it may be that your accounting system should have warned you months ago that it was coming.

You might already have a board, a number of advisers and you operate as a team, in partnership or alone - the quality of information and advice is critical to your success. Get it right and more often than not your decisions will be good ones.

■Balance Consulting is a Whanganui consultancy specialising in business strategy, process excellence and leadership mentoring - contact Russell Bell on 021 2442421 or John Taylor on 027 4995872.