Common sense in business
Any slacker can solve a problem with an unlimited budget. Even a fire will go out if you dump a ton of cash on it. Clearly, there are situations where all the money in the world won’t save you anymore. For example, the Titanic. But in other cases, indeed, the speed of its solution to a complex problem is proportional to the amount of investment made. So the first impulse of many people is to try to solve the problem with more money when standard ways don’t work.
The non-standard nature of the problem means there is a high degree of uncertainty about what it really is. Perhaps by increasing the usual budget by 20%, we will get the desired breakthrough. Or maybe we will pour investments indefinitely, trying to concretize the abyss. In fact, such unfortunate initiatives can regularly be observed when leaders obsessed with “good” intentions waste colossal public resources for the sake of some ideology. In terms of psychology, their pleasure is super-valuable and therefore has no bottom. Like a drug addict, they will not stop until they have zeroed out all their reserves.
Fortunately, business is one of those areas where common sense can be measured. The function of business is to create and multiply value, which is indicated by an increase in market capitalization. This is how the criterion of right and wrong emerges. If a company’s value has grown, it is good; if it stagnates or falls, it is bad. You can assess whether a particular initiative effectively corresponds to the main function. It’s about ROI, which is the return on investment of funds in project X versus project Y. So the business has a limiter that protects against crazy initiatives. Provided, of course, that the business owners prioritize common sense and not something else. After all, even a strong team of top managers is powerless to prevent the owner from destroying his business.
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