Recently I was in a meeting with ten other people and we were trying to resolve a risky business situation that had legal and financial implications for the company. Discussing risky business situations with this group of folks was nothing new. In fact, we were having the same conversation over the same situation without any resolution that we had on previous occasions. We were going in circles with no resolution.
I started thinking: what were we really talking about and why weren’t we pulling a plan together to mitigate the risk we were facing?
Listening as each person shared their thoughts, I noticed a common theme. The theme was – how great the organization was; how far it had come; how successful it was; how everyone in the room was smart and creative. In fact, half-way through the meeting, each person in the room had been identified as being amazingly brilliant and accomplished by another person in the room.
Every now and then, someone in the meeting would mention the risky business we were discussing and were supposed to be deciding how to manage. Even then, everyone would immediately return to hiding behind the veil of greatness by congratulating the speaker on how brilliant their description of problem was.
But yet, we had no plan to resolve the situation nor did anyone own up to wanting to resolve it.
As the lawyer, for the most part, it is not my job to start delivering taskers to the business folks in the room in order to solve a problem. But, I can use the tried and true lawyer move of asking a bunch of questions to illuminate the issue that may make everyone anxious enough to start developing a mitigation plan. Even when I did that, the conversation eventually circled back to how awesome we all were.
Then it dawned on me that the real issue we faced was actually a governance and management problem and not the risky situation we had gathered to discuss. Unless these folks were willing to admit they had a governance and management problem. That is, an inability to strategically and tactically develop and execute a plan in the face of a legal and financial challenge, they weren’t going to solve any problems. They need to own up to the fact that maybe everyone was not so smart because they had created a problem. The problems would not get resolved because everyone was too smart and too accomplished to admit that the smart people caused some of the problems; or, some problems cannot be solved without a lot of time, money and human capital being expended. Or maybe, it was just so risky that we needed to walk away from the situation. But no one wanted to say any of this.
I do not think my experience is unique, I think in some organizations the ambitious, smart, creative, energetic, accomplished people get stuck and need to stoke the ego fires. Unless someone in the room can say “yep, we are all smart but we are all facing a big problem that we need to fix”, the smart people will never solve the problem. They essentially convince themselves that there is no problem.
I think despite what we all saw happen at Enron and in other corporations this is a chronic disease in corporate America. (Reminder on Enron – a bunch of really smart people kept coming up with really bad, ultimately illegal ideas that drove the company to ruin.) Self-congratulating on past business success and personal intellectual capabilities does not resolve risky business situations – instead – it creates an ostrich in the sand situation until the government arrives with a subpoena. Then, the government is figuring out why the risky business went down and who was responsible for the risky business going down.
Lest you think I am some cynical, pessimistic, grumpy lawyer… I can say unequivocally that I am not. And, I can say that the vast majority of my clients are really smart people who do affirmatively drive to identify and mitigate risks before they become something of interest to the government. I so admire my those who founded and lead my clients because they too are optimists, embracing challenges and embodying Winston Churchill’s approach to challenges: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
