Sloppy preparation and decision-making are inexcusable
In Peter D. Kaufman’s important work, Poor Charlie’s Almanac, Kaufman catalogs the learning, decision-making, and investing methodologies followed by famed businessman and Berkshire Hathaway co-founder, Charlie Munger.
One of the most insightful perspectives that Munger brought to business is summed up in the statement, “While poor outcomes are excusable in the Munger-Buffet world — given the fact that some outcomes are outside of their control — sloppy preparation and decision-making are never excusable because they are controllable.”
This quote reminds me of something I learned many years ago while in the Explorer academy at the Los Angeles Sheriff’s Department. Our drill instructors would regularly bark out the statement, “If you fail to prepare, you prepare to fail!”
Kaufman’s point in this piece is simple. There are so many things in day-to-day business operations that are uncontrollable. You can’t hold yourself or your people accountable for the things that you and they can’t control.
But there are a few key things that are within your and their control. Two of the most important are preparation and decision-making. The more prepared you are, and the more insightful someone’s decision-making, the greater impact they will make on your business.
If you focus on helping people to grow and develop in those two areas you’ll see a greater impact in your business in the coming year. But if you allow for low levels of preparation, you’ll experience more failures day-to-day than are acceptable. And if you allow for uncorrected poor decision-making, you’ll open your business to significant risk and failure.