other person to find the correct solution.
Suggestions for How to Use This Question
“What do you feel is the right decision for
you?”
Baltasar Gracián, a Spanish Jesuit who lived in the seventeenth century, was a trusted
advisor
to kings, queens, and wealthy nobles. In his still-popular book,
The Art of
Worldly Wisdom, he wrote: “When you advise a prince, you should appear to be
reminding him
of something he had forgotten, rather than the light he was unable to
see.”
Sometimes, your job is to help others go deeply into their hearts and recognize their
own decision rather than push them in a particular direction.
When to use the question
When the choices are extremely close. (When
someone cannot make up their
mind about two alternatives, more logical analysis may not help.)
When the decision is a very personal one that may also affect loved ones. (You
cannot quantify the impact of moving to a new city on a child. Only the heart can
understand that).
Alternative versions of the question
“What does your heart tell you?”
“How will this impact your family (spouse,
children, loved ones)?”
“With each of these choices, what regrets do you think you might have—either
way— in two years?”
Follow-up questions
“What would you say is the deciding factor for you?”
“What's your next step from here?”
16
The Greatest Teacher
My client's stock price is languishing. It's treading water, going nowhere,
like a sailboat in the doldrums. (That's the area near the Equator where the
winds
will die for weeks at a time, leaving sailors stranded).
Without a rising stock price, the options owned by the company's senior
management are worthless. It's hard to hire new executives. They are, in the
worst case, susceptible to a hostile raider. The business could be stripped
clean, its assets plundered like war booty in medieval times.
The company hires us to figure out why this is happening and to suggest
remedial strategies. They are committed to getting to the bottom of things.
We put our best team of analysts on the case. We even seek the
collaboration of a brilliant finance professor at the London Business School.
The diagnosis is clear: Investors in this company's
stock expect higher
returns than the business generates—at least the way it is managed today.
This means its cost of equity is higher than its return on equity. One of the
major problems is that there is a retail store business saddled with
expensive leases and weak product categories. The customer's average
purchase is tiny.
They need strong medicine. And it may be a bitter pill to swallow.
We create a report that is leading edge. It incorporates the latest capital
markets theories and analytical models. It has charts and graphs that would
rival the battle plans for the invasion of Normandy. 172 pages.
We are proud of the depth, thoroughness, and incisiveness of that interim
document. It is incontrovertible. Unequivocal.
Our first meeting to present the preliminary recommendations, however,
is little short of a disaster. We should
have remembered Helmut Von
Moltke's warning, “No battle plan survives contact with the enemy.”
We're in a large meeting room at the company headquarters, sitting
around a table. I begin my presentation. I
barely get started when the
executives representing the retail business begin attacking every aspect of
our analysis. They defend their turf like grizzled,
street-smart junkyard
dogs. Anticipating our conclusions, they have even
hired their own
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