Posted: January 10, 2014
More on overcoming workplace fear in the new year
Part Two: Avoid becoming PollyannaStephen Dietrich
(Editor's note: This is the second of two parts. Read Part One.)
Fear in a business setting can take many forms. Fear of not being able to sustain operations at historical levels can be a driver to sell before failing. Fear of not being able to handle growth and the success of the business may lead to incorrect hiring decisions. All of these actions (or inactions) will likely guarantee failure.
Fear can take the form of analysis paralysis. One of the common beliefs as to why Saturn was unable to continue to be a successful auto manufacturer is that the company could not decide what its market was. Allegedly there were strong internal competing views on what the Saturn market actually looked like.
As was evidenced by the slow rollout of new products, the apparent thematic inconsistency in those products, and the jumble of advertising motifs appealing to a confused concept of the relevant market, it seems likely that a clear decision was not made by Saturn on what it thought it was or what it wanted to be. Eventually, this lack of direction and decision was likely a significant factor in its demise.
When fear is not allowed to run amok, it is not all bad. For example, a successful American company that designs, manufactures and sells electric roadsters and luxury sedans with roots in California, did not let fear stop the company from making historic changes and revamping its entire business model. While the ultimate fate of company is still undecided, it has made an impact on the retail auto industry by going against the grain of traditional automotive practices, and will be introducing new models in 2014.
Be Reasonable and Open
Flexibility in any business setting is often required to accomplish goals. Any project or transaction worth doing will demand adjustments along the way. It is often the case that as new information becomes available, different paths or solutions are needed to reach the objective; being aware of this necessity and being willing to adapt are hallmarks of a good leader, internally and externally.
Rick, the owner of a sports clothing company, could not let his past fear go. A former business deal had gone bad when Rick had purchased some property without being fully informed of the potential environmental issues by the seller – costing the seller a large sum of money to resolve.
Now Rick was selling his company to Alice and was on information overload – dumping every bit of information he had in her lap to provide full disclosure of the condition of the property, specifically environmental issues, so he wouldn’t be liable if the deal went sour.
He had partners that trusted him to get the deal done with no post-closing issues. This was also Rick’s big exit; his homerun. If this fell apart, Rick could not imagine what life would be like. Rick was being propelled by fear, and it created unnecessary anxiety and mistrust between Alice and Rick.
Once Alice understood the pressure and fears with which Rick was grappling, Alice worked through her business issues and concluded that she had enough comfort to go forward with the deal. Alice suggested to Rick that Alice’s company provide an acknowledgement relating to disclosure, and Rick’s company provide a representation that stated that he had provided all the information available to his knowledge. Rick was able to proceed with confidence and manageable fear that no unknown information bomb was waiting to explode. Alice was able to reasonably quantify her business risk and not be afraid she was missing a salient fact in the deal.
Avoid Pollyannaish Methods
When looking to understand situational dynamics in business, fear must be included as a potential issue. It is Pollyannaish to believe business is only rational thought and understanding. Many projects and companies have been founded and function with this belief. But, companies are made up of people and history shaped by human experience.
A wise and thoughtful business leader will look at all aspects of a situation, the inherent humanity included, and make decisions and engage with a fuller understanding of the dynamics. More often than not, this type of engagement will result in a better operation, transaction, agreement or strategic plan.
With most of 2014 ahead of us now, understanding that fear is one of the strongest motivators will help when seeking out solutions to overcoming common workplace obstacles.
Stephen Dietrich is a shareholder at the international law firm of Greenberg Traurig, LLP. Dietrich represents corporate and other entities in mergers and acquisitions, debt and equity financing, and restructuring transactions. For more information, email him at firstname.lastname@example.org or call 303-572-6502.