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Business Insights from Andrea Hill

Why this rant about reality? Because so many business decisions are based, not on reality, but on emotions.

Everything I Need to Know I Learned on TV

10 January 2008


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I hate to spend much time writing about reality, because so few people actually want to deal in it. But I’ll take a risk on realities tonight, because for some reason Wednesdays seem more reality-receptive than the other days of the week.

Let’s start with the reality that it’s impossible to get a home loan these days. As a person who is selling a home and buying a home, I can tell you that there is plenty of financing out there. If you have good credit, if you have some money to put down, and if you have an income. Sounds fairly reasonable, right? So, is the reality that the housing market has fallen apart, or that the housing market was unrealistic to begin with and has simply corrected? If I – who have been stuck selling a house for 185.5 days now – can recognize this fact, other less emotionally attached people surely could. And the financial markets? Well yes, they’ve suffered. But credit has certainly not dried up. And all these newspaper journalists touting the difficulty of getting credit are likely scaring away my potential buyers (among other arguably more important economic damage they are also likely causing).

Let’s not even get started discussing whether the primaries are reality-based or not.

How much reality is involved when we are making a hiring decision? Do we pay attention to all the important facts and figures, like work history, education, experience, behavioral indicators, references, and only then trust our gut feeling? Or do we rationalize that we have particularly high EQ (when polled, over 90% of poll-ees claim to have high EQ, compared to various studies that indicate the actual number is somewhere in the 15-25% range)? And what are those rationalizations actually based on? A different reality. The one that tells us to what extent someone is like us or doesn’t remind us of someone who irritates or scares us.

Business income/operating statements reflect the reality of a business, right? But which reality? Depending on how you capitalize, amortize, categorize, and agonize, the same business could have many different income statements – without anyone doing anything wrong. There’s nothing wrong with this. But when one uses income and operating statements to manipulate, to support personal opinions that may or may not be based on fact or good knowledge, one can damage a business.

Most of us have had the experience at least once of listening to someone talk themselves (and probably others) into doing something unethical. It’s not hard to take facts and manipulate them to support a questionable reality.

Here’s one of my favorites. “I don’t have time to . . . (fill in the blank).” That’s not reality. We all have time. It would be more honest to say “It’s not important enough to me to . . . (fill in blank the same way as before).”

Why this rant about reality? Because so many business decisions are based, not on reality, but on emotions. Yes guys, you too – just as often as the gals. We get all wrapped up in believing we are right, or fearing we might be wrong, or fearing the consequences, or being offended that someone doesn’t agree with us – the list goes on and on and on. Every single day in buildings across the globe people make decisions that are ultimately about making themselves feel better, or smarter, or smarter-than, or to keep them from being so damned afraid. And what does it do for business? Nothing very good.

Reality is another word for truth. Truth is exceedingly hard to get at. And what we want to be true and what really is true are frequently not the same. But a dedication to truth in all its grimy grungy splendor can free a person, an organization, a community – you get the picture, so aim high here – to accomplish great things.

Really.

(c) 2008. Andrea M. Hill