The playwright Oscar Wilde
wrote, “A cynic knows the
cost of everything and the
value of nothing.” By nature,
most successful business executives tend to be more optimists
than cynical naysayers.
The leaders who are the best
of the best, however, have an
internal mechanism that allows
them to dream, dare and do
while simultaneously knowing
to challenge and question. The
good leaders probably possess
a yet undiscovered gene that
automatically flashes a yellow
warning sign in the back of
their heads reading “trust, but
verify,” when they’re introduced
to the unproven or unknown.
Experience, judgment and wisdom are the tools needed to distinguish between dismissing an
idea as flaky and accepting it
at face value.
Case in point is the now
infamous Bernard Madoff,
the Ponzi-practitioner
extraordinaire, who also
had a bit of Houdini in him
because he could touch a dollar and make it instantly disappear. His signature pièce de
résistance was the vanishing
act of putting other people’s
dollars in his own pocket by
using a sleight-of-hand
maneuver, most likely in the
form of a glib smile and nifty
software program. The software
produced a faux monthly statement that recapped the bogus
previous 30 days’ perennial successful results. This led trusting
investors to believe they could
sleep soundly thinking that their
money was not only safe but
also growing exponentially.
This garden-variety swindler,
who makes the Wild West bandit Jesse James look like
a saint in comparison,
certainly did not discriminate. Reportedly, he purloined more than $50 billion
from supposedly savvy fund
managers to unsuspecting charities with no doubt a few widows and orphans sprinkled in
for good measure.
How could this have happened? First, people wanted to
believe. Secondly, most of us
have an innate desire to be associated with winners. However,
eventually, we all learn the cold
reality that if it is too good to be
true, then more than likely, it is
too good to be true. Worst of all,
some professional “money managers” turned over unimaginably huge sums to this Ponzi
artist without apparently doing
their own due diligence, which
is not only an ethical prerequisite
but also an exercise demanded
by common sense if not common law. Had the unsuspected
subscribed to the principle of
“trust, but verify,” this scheme
would have failed. Instead,
decades passed before the genie
was out of the bottle, and it took
the biggest stock market disaster since the Great Depression
to defrock this con man.
How can executives learn
from this debacle and translate
the concept of “trust, but verify”
into a safety net to protect the
enterprise without dampening
creativity and enthusiasm that
could lead to the next great
business success?
Every stockbroker must learn
the Securities and Exchange
Commission’s Rule 405, which
is “know your customer.” This
same requirement must apply
to businesses. At a very minimum, have a sense of whom
you are dealing with. Is it coming from a trusted peer or subordinate or the nephew of your
brother-in-law’s barber? The
best bets are made on those
who have done it before and
have done it successfully. Some
call these habitual achievers
“serial entrepreneurs,” but they
also can be innovators who toil
down the hall from you and
constantly deliver on promises
and concepts. Good leadership
requires the discipline to hear
out a proposal yet employ finely
tuned instincts and cunning,
sometimes indelicately referred
to as the “smell test.”
Sniffing out the nuances of
the real story to discover
hyperbole or worse takes discipline and patience. Once the
answers sort of make sense,
move to phase two by doing
some quick back-of-the-envelope calculations and research
to determine if there is at least
a snowball’s chance that whatever is being proposed won’t
melt away as soon as your
check clears the bank.
Finally, talk to others who
may have tried something even
remotely similar to what has
been proposed. You’ll be amazed
at what complete strangers and
even tangential competitors will
tell you when you simply pick
up the phone and ask.
To build, grow and succeed,
every organization needs a
constant inflow of new ideas,
be it products, services or a
better way to skin that proverbial cat. Somewhere between
an optimist and a cynic is a
realist who always knows the
difference between a quacking
duck and a striped zebra.
MICHAEL FEUER co-founded OfficeMax in 1988. Starting with one store and $20,000 of his own money
during a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual
sales of approximately $5 billion before selling it for almost $1.5 billion in December 2003 to Boise
Cascade Corp. Feuer is CEO of Max-Ventures, a retail venture capital/consulting firm, and co-founder and
co-CEO of Max-Wellness, a new health care product retail chain concept that is launching in 2009. Feuer
serves on a number of corporate and philanthropic boards and is a frequent speaker on business,
marketing and building entrepreneurial enterprises. Reach him with comments at [email protected].
