THE BUSINESS WE MEANT TO BUILD

How good businesses lose their way

Chapter 12 – Research, Review, Then Respond

There are days when the telephone begins ringing before the newsreader has finished explaining what has supposedly happened. A government has announced something, an economist has predicted something else, and a commentator has converted both into an approaching catastrophe before breakfast. By nine o’clock, business owners are calling their accountants wanting to know what action must be taken that afternoon. The difficulty is that the announcement may not yet be legislation, the prediction may be based upon assumptions that do not apply, and the catastrophe may exist principally in the enthusiasm of the person describing it. Nevertheless, an immediate answer is expected because accountants are apparently issued with crystal balls somewhere between their university degree and professional registration.

I understand the desire to respond quickly. Business owners carry risks that commentators merely discuss, and waiting can sometimes narrow the available choices. A change in interest rates, taxation, employment law, technology or customer behaviour may eventually require a genuine response. Anticipation can be a valuable business discipline when it is grounded in evidence and connected to a clear purpose. What concerns me is the growing belief that the speed of the response is more important than the quality of the thinking behind it.

The modern environment rewards reaction because reaction is visible. News arrives, social media amplifies it, experts interpret it, and somebody inevitably explains that businesses failing to act immediately will be left behind. The argument is often persuasive because it contains enough truth to sound urgent. Conditions do change, opportunities can disappear, and businesses that refuse to adapt may eventually become irrelevant. However, none of that means every announcement is relevant to every business, nor does it mean that movement made before understanding should be mistaken for progress.

Perhaps the better discipline is less dramatic. Research whether the claim is true, review whether it matters to this particular business, and only then decide whether a response is required. Those three steps may sound painfully ordinary in a world that prefers instant solutions, but ordinary thinking has saved businesses from extraordinary mistakes. Research asks what has actually occurred rather than what somebody fears may occur. Review asks how the matter connects with the business, while response remains a decision rather than an involuntary reaction.

The distinction matters because something may be accurate in general and almost meaningless in the circumstances of an individual owner. An economic forecast may correctly predict weaker consumer spending across the country while a particular business serves customers whose demand remains strong. A Budget announcement may indicate the government’s intention without creating an immediate legal obligation. A proposed tax measure may attract several months of commentary before the final legislation looks quite different from the original media release. The fact that a subject deserves attention does not mean it deserves control of the business today.

One of the older principles repeated throughout my professional life is that if it is not written, it did not happen. The expression is usually associated with records, agreements and evidence, but it also provides a useful defence against premature reaction. A headline is not legislation, an interview is not a regulation, and a political promise is not an operating instruction for the business. Even a written announcement must be read carefully because the words “proposed,” “intended,” “subject to consultation” and “from a future date” carry rather different consequences from the words “enacted” and “effective.” The boring work of establishing what exists may lack the excitement of announcing a solution, but it is still the work upon which sound advice depends.

This can place accountants and advisers in an uncomfortable position. A worried client may not want research and qualification; they may want certainty, preferably before lunch. They may expect the adviser to predict the final form of a proposal, the behaviour of the economy and the response of competitors who have not yet heard the news. It can be tempting to provide a decisive answer because decisiveness looks professional, while “we need to understand more” can sound disappointingly cautious. Yet confidence borrowed from an adviser is not the same as clarity developed by the owner.

The original promise that Banks Consultancy would act like a “silent” partner was never intended to mean that we would sit quietly while a client followed every passing alarm. It meant thinking closely enough about the business to ask whether the alarm belonged to it. A genuine “silent” partner should want to know what has changed, what remains uncertain and what decision may eventually be required. They should also ask what the owner is trying to achieve, because no sensible response can be separated from the destination. Advice should strengthen the owner’s judgement rather than replace it with the adviser’s anxiety.

In the cold light of day, the question is often whether the head and the heart are examining the same problem. The heart hears that costs will rise, customers will disappear or a valuable opportunity will be lost. The head should ask how much, when, according to whom and on the basis of what evidence. Neither should be dismissed, because instinct can recognise danger before a spreadsheet gives it a number. However, instinct deserves investigation before it is allowed to redesign the business.

This is particularly important when compliance or taxation is involved. There are times when action genuinely cannot wait, and advice obtained too late may become little more than an explanation of why the available choices have disappeared. There are also times when businesses spend money, restructure operations or create unnecessary complications to solve a problem that has not yet become real. Advice before compliance is valuable because it allows obligations to be understood and planned for, but advice before compliance does not require invention before facts. Courage before convenience may sometimes mean acting early, while on another occasion it may mean resisting the comfort of appearing busy until the proper position is known.

The corner being cut in all of this is not merely research. It is the connection between the proposed response and the journey the business has already chosen. Structural changes can be expensive, distracting and difficult to reverse. New entities, systems, staff arrangements, pricing models or financing decisions may consume months of effort before the owner discovers that the original threat never arrived in the form predicted. The business has still paid the price, even though the problem eventually disappeared into the pile of yesterday’s urgent headlines.

I have often wondered how businesses find themselves so far from their intended direction while remaining convinced they are being responsive. The answer may lie in a succession of small detours, each justified by an announcement, a seminar, a forecast or a confident person on a screen. One rabbit hole leads to another, and valuable time is spent seeking answers to questions that were never properly formed. This is part of the frustration beneath How Did We Get Here: not simply that poor decisions are made, but that accepted noise can slowly become accepted direction. By the time somebody asks whether the journey still serves the original dream, the business may have become very efficient at travelling towards somewhere else.

The influence of Dumbing It Down appears in the pressure to ask “how” before anybody has had the courage to ask “why.” How do we restructure, automate, reduce costs, increase prices or protect ourselves from the predicted change? Those may eventually become sensible questions, but they are not necessarily the first ones. The wiser beginning may be to ask why this issue matters to this business and why action is considered necessary now. Questioning the urgency is not denial, and refusing to follow the room immediately is not evidence that the owner has failed to understand it.

CANEI, Constant and Never-Ending Improvement, does not require businesses to react to every passing idea. Improvement should leave the business stronger, clearer or better able to serve its purpose. Reaction may simply leave it different. There is nothing particularly admirable about changing direction quickly when the new direction has not been examined. Steady improvement often involves refining what already works while keeping enough awareness to recognise when genuine change has arrived.

This is where the Discipline of Boring again proves its worth. While the market discusses what might happen, the business can continue issuing invoices, collecting debts, monitoring cash flow, reviewing margins and keeping accurate records. Those activities do not represent a refusal to engage with the future. They create the information and resilience required to respond properly when the future becomes clearer. A business with reliable numbers can assess an announcement against evidence, while a business without them may be forced to substitute emotion, headlines and hope.

My book 20 Days Too Late arose from watching decisions become urgent only after the useful options had narrowed. Its warning is not that every possibility requires immediate action. The deeper point is that timing matters because good decisions need enough time for facts, advice and consequences to be considered. Acting too late can be costly, but acting too early without understanding can be costly as well. The objective is not speed for its own sake; it is readiness before the decision becomes unavoidable.

The practical reflection for an owner may begin with two uncomfortable questions. Who or what am I really fighting, and where does this proposed change fit within the ultimate goal? The enemy may be a genuine commercial threat, but it may also be uncertainty, embarrassment, competitive anxiety or the fear of appearing inactive. It may be worth writing down what is known, what is merely expected and what evidence would justify a response. Once those distinctions are visible, the business can decide whether it needs action, preparation, observation or simply the patience to continue doing its real work.

Maintaining the rage and keeping a finger on the pulse of the business are not the same as chasing every movement around it. Awareness matters, anticipation has value and some decisions deserve to be made before the rest of the market recognises their importance. Change for the sake of appearing responsive, however, is not a strategy, and reaction without thought does not become wisdom merely because it occurred quickly. The business owner still carries the right to research, review and decide whether the noise deserves a response. The final decision remains theirs, as does the responsibility to ensure that any change strengthens the journey rather than merely proving that they heard the alarm.