Lesson 74: Prudence
Adventurous is a polite way to describe me as a child. My antics in Kindergarten sent me to the emergency room: Once, I wandered off a trail and stepped on a live beehive sending a swarm of angry bees on me. Another time, a classmate’s playful shove sent me into a furious chase down a flight of stairs to catch them only to trip and tumble to the bottom. My lack of foresight got me hurt and led to my literal downfall. These early incidents were some of my first introductions to the importance of prudence.
My childhood adventures were vivid lessons in the consequences of acting without prudence, a quieter virtue that employs reason rather than reaction. Prudence would have told me to stay on the path or stop running down stairs. But this is often easier said than done.
As a searcher, I look at businesses for sale and my impulses have led me to look at companies that are in the wrong industry for me. For example, this week I looked at a hair salon for sale. After thinking about cosmetology programs a couple weeks ago this business caught my eye. However, I conducted some industry research and found cosmetology school is one of the smallest sectors in the career and technical education (CTE) industry. Here is an example of an industry overview:
Prudence led me to research the industry thoroughly and make the wise decision to pass on that particular business. While the idea of a hair salon initially caught my eye, my research revealed a crucial insight: cosmetology schools represent the smallest sector within the CTE industry. Skilled trade and nursing schools are much larger markets. My decision to pass is data driven.
Prudence is not only useful for making decisions when buying a business, but also when managing people. My leadership style prioritizes people, and with people comes conflict. In his TEDx Talk, Kwame Christian, Esq. describes how compassionate curiosity helps him navigate conflict both in his professional life as an attorney and personal life as a husband. In a heated conflict, he has asked, “I can tell you are upset, so what are your biggest concerns?” He calls this compassionate curiosity, but I see it as an effective application of prudence. By pausing to consider the other person’s perspective before reacting, he employs reason to find a resolution.
Before buying a business, I hear searchers “fall in love” with the business. It leads to the temptation to ignore problems in the business or avoid conflict with the seller. If we decide to ignore problems and avoid conflict before owning the business, then you will fail as an operator. As leaders, we are ultimately responsible for the outcomes of the team. My playful mistakes used to send me to the emergency room, but my failure to be prudent as an operator will send my business into Chapter 11 bankruptcy.
My values are to act with love, humility, and wisdom. Wisdom guides my decisions. In Entrepreneurship Through Acquisition, my excitement to become a CEO must be balanced with the prudence to turn down opportunities which are not a fit for me. My MBA experience has prepared me to acquire a small business, so I want to leverage the quiet wisdom of prudence. I still have the scar on the back of my head from that fall when I was 5 years old. It serves as a reminder of the safety prudence offers.
This is Lesson 74: Prudence. Next week is Lesson 75: Expertise.
