McKinsey’s essay “Delighting in the Possible” is worth reading and contemplating for many reasons. What stood out to me is their premise that “uncertainty cannot be solved with pat procedures.” Sometimes, you need to shift your core assumptions because a fact-based view can prevent your company from great “possibilities”.
The article cited the example of a firm facing increasing demand and wondering how to finance production to meet it. Could the firm stay within budget by cutting heads? McKinsey said the answer was to look at the situation from a new perspective and ask: How can we share our workload in a new way without cutting services or staff?
When I worked at Seagram, I spoke to the owner of Maker’s Mark, who was willing to sell his company for $20 million. Seagram’s CFO turned down our recommendation because he said the business would “get lost in the rounding.” Maker’s Mark is now worth $1 billion. It was small then because of a lack of capital, which Seagram could have provided.
My feeling is that good financial information can help companies avoid the “probable” suboptimal outcome and allow them to move on to the “possible” great outcome, if finance acts as a Strategic Business partner, rather than a constraint on success.
