My Dad taught me to drive in a late 1950’s Hillman Minx. It had a column mounted shifter and a very stiff clutch! But…It was the promise of freedom on the open road and I could not wait to test its upper limits, if you know what I mean! Sensing my enthusiasm, one of the mantras that my dad drilled into me was, “never accelerate into a closing gap.” Indeed, remembering this advice—sometimes at the last moment—saved me from some hair-raising moments, or worse.
As the years passed and my career unfolded, I came to learn that this mantra had a figurative as well as a literal application. Here’s the reality: trying to cover an error with what turns out to be another error will always end in disaster. To stay with the automotive theme, we can all name at least one major iconic brand whose senior leadership may be ruminating over this truth right now.
In an editorial that I wrote for the Conference Board of Canada some years ago, I offered that, “The fog of current circumstances can be cut through only if you can stand in the future and describe that future in a level of detail that is as specific as your organization’s current circumstances.” Sometimes the clarity you need can only be achieved by bringing trusted and impartial advisors into the dialogue. While this is a critical discipline when contemplating strategic decisions, it also has importance in everyday business. During my days on the trading desk, when an error occurred—like trying to close a short position by selling, only to end up with twice the original short position—we had a hard rule: flatten the trade and take the loss—never try to trade it out.
Dealing decisively and transparently with missteps can be costly, but never as costly as the impending financial or reputational hit that lurks when the first error is not dealt with head-on.
If ‘short term-ism’ takes precedence in decision-making, the long-term invariably is mortgaged, if not sacrificed completely. People will generally forgive errors, but they will not forgive cover-ups.
Published with acknowledgement to Thomson Carswell, publishers of the 2nd edition of Sales Force Management in the Financial Services by Paul K. Bates, from which parts of this article were drawn.
A Chartered Professional Accountant (FCPA), Fellow of the Society of Management Accountants (FCMA) and Certified Management Consultant (CMC), Paul's career has spanned: senior academic administration; business and divinity school lecturing; investor advocacy; capital markets regulation; investment dealer executive leadership with P&L accountability; expert witness and international consulting in the financial services sector. He is a former member of the council of Canada's Social Sciences and Humanities Research Council (SSHRC). Paul holds a Master's degree in Theological Studies from McMaster Divinity College, where he is pursuing a Ph.D. in Theology.
 The Corporation With Integrity: A Well-Found Vessel in an Angry Sea; The Conference Board of Canada, 3 pages, May 6, 2009; Executive Action Report by Paul K. Bates http://www.conferenceboard.ca/e-library/abstract.aspx?did=3031