Commentary: The process of learning good business judgment

Journal Record, The (Oklahoma City), Jun 17, 2002 by H. Goldsmith

I think it was Will Rogers who explained that "good judgment comes from experience and much of that comes from bad judgment." No doubt many seasoned entrepreneurs have a sincere appreciation for Will's insight; for none can say that their judgments were impeccable throughout the life of their ventures.

Much of their experience and good judgment was gained during periods of economic boom. It is very difficult to discern between good and poor judgment during "boom times." As a boom gathers momentum, poor judgment often becomes the norm, flying in the face of "conventional wisdom." Once the boom goes bust, poor judgments are seen in the light of day and most of what went up comes down. The post-boom era is often filled with painful memories and littered with broken relationships, tarnished reputations and regrets. Larry Magid published "Rules for Entrepreneurs" in the Los Angeles Times (5/17/2002), an article that offers sage advice to entrepreneurs from a post-boom and bust perspective. 1. Don't take it personally when things are rough but - just as important - don't let it go to your head when they are good. Ego and expectations that the good times will last forever have been the downfall of many an entrepreneur. 2. Be careful how you treat people on the way up. You might meet them on the way down. 3. We live in a world where power and authority is fleeting and subject to change. Don't fight it - learn to live with it. Today's boss could be tomorrow's subcontractor. Keep those lines open. Make friends and keep them. They will work wonders for you. 4. Network for new contacts, but cherish your old ones. Keep in touch with buddies from college and even high school. 5. Seek advice, but make your own decisions. If it doesn't feel right, don't do it, regardless of what "experts" tell you. 6. Learn to do things on your own. Try not to rely on others for all the essentials of running your business. Even when you can afford help, don't think you're too important to do your own typing, ship your own packages, answer your own phone and clean up your own mess. 7. When you meet new people, make the relationship a two-way street. Never take without giving something, even if it's just a handshake and a sincere "thank you." Figure a way to introduce yourself in 10 seconds. Follow up with an e-mail. 8. Be impulsive, but always wait at least a day before acting on an impulse. 9. Avoid wasting money on fluff. Expensive office space or furniture may look nice, but it's not nearly as impressive as being able to keep your business afloat. 10. Live well but modestly, even during times of success. Silicon Valley is populated with people with car payments and mortgages they can no longer afford. One way to keep the repo man away from your BMW is to buy a Toyota instead. 11. Be flexible and willing to scale up or down. Keep your costs under control. It's amazing how small companies can throw away enormous resources with little return. 12. Do your own public relations and marketing, or have it done by someone whom you trust and who knows what they are doing. Don't get ripped off. 13. Never hire a CEO unless that person is as passionate as you are. And don't take his or her word for it. Check out the person carefully to make sure his or her past isn't littered with failures. 14. Take care of yourself. Buy a good chair, wear a telephone headset, get plenty of exercise and eat well. Make sure you have solitude to think creatively. A walk, a swim, a weight lifting session, yoga meditation or a bike ride may yield more benefits than the best consultants in the world. 15. Stay business-like, but remember to be passionate and playful. Have fun. These rules will have different meanings for different entrepreneurs. For the ones who have experienced the exhilaration of riding the boom and the agony of enduring the bust, they are gentle reminders of lessons already learned. For future entrepreneurs who have never experienced the boom or bust, one can only hope these rules will prevent them from gaining their good judgment the hard way. H. Randall Goldsmith is the executive director of the Oklahoma Technology Commercialization Center, operated by the Oklahoma Technology Development Corp., a private, not-for-profit corporation dedicated to the creation of high-technology businesses. The center is operated under contract with the Oklahoma Center for the Advancement of Science and Technology and is funded with state appropriations.