The most important business concept: Reality check
The most important concept in business and management isn't a theory, a product of research or some pithy quote from a leadership guru. It's called a reality check, and it's what savvy executives do when confronted with ideas that just don't seem right.
It happens every day in companies big and small all over the world. Some inexperienced, incompetent or pseudo-intellectual manager has a little too much Kool-Aid to drink and proposes a plan that's ludicrous, idiotic, outrageously risky, self-serving or some combination thereof.
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If not for a reality check, far more companies would fail, venture capitalists would be buried in bad investments and, most importantly, your career won't go very far. Here's an example that I'll never forget.
The executive staff of a Fortune 1000 semiconductor company was engaged in an all-day strategy meeting to decide the fate of a microprocessor product line that was getting destroyed by archrival Intel, bleeding gobs of red ink and taking the entire company down with it.
The product line VP gets up in front of the room and presents slide after slide of unrealistic product milestones, sugarcoated forecasts and business school mumbo jumbo that would have confused Peter Drucker. Clearly, that's how we'd gotten into this mess to begin with.
Then somebody -- I'm not saying if it was me or not -- starts asking some really pointed questions along the lines of, "Let's cut the crap. You're slipping farther and farther behind Intel every day. Is there any reasonable probability that that's going to change anytime soon?"
Soon thereafter, the CEO decided to jettison the division and write off the losses. It was the right move. Before long, we were back in the black, the stock was off to the moon and everybody was happy. End of story.
Having experienced dozens of company-making or company-breaking situations just like that one over the years, I've come to the conclusion that, more often than any of us would like to admit, a reality check is the only thing that stands between glorious success and catastrophic disaster.
If you're wondering why that is, I can shed a little light on that, as well. There are loads of reasons why otherwise smart and accomplished people propose or push incredibly dumb ideas, but more often than not, it's got something to do with ego, incompetence, myopia, blind optimism, unknown territory, bad assumptions, too little or too much skin in the game, or they've gone bonkers and are off their meds.
That's a long way of saying it doesn't really matter why it happens, just remember that it does happen, all the time. So keep that reality check handy and use it liberally. Better to call people out when something sounds or smells funny than to kick yourself, all the way to the unemployment line or bankruptcy court, because you didn't.