An interview with Matthew Neill Davis, about his book “The Art of Preventing Stupid: How to Build a Stronger Business Strategy through Better Risk Management”.
The Art of Preventing Stupid is a how-to book about an efficient, comprehensive way to address and deal with your business vulnerabilities.
What inspired you to write this book?
For the last 24 years, I’ve seen people walk in my office and guess what? As they’re telling me their problem, I’m going, “My gosh, if we would have talked about this and dealt with it, we could have prevented this.” It’s the same stuff that happens over and over again.
The book is called The Art of Preventing Stupid, and it’s a how-to book about an efficient, comprehensive way to address and deal with your business vulnerabilities. It walks you through a system that I called it “Being Kind of Smart”, “The Art of Preventing Stupid”, because I maintain that most of the problems business people get into are really stupid mistakes that could have been prevented. And I just don’t want to mince any words about it because I’m a practicing lawyer, and we do business law. That’s all we do.
So, the book is about teaching people how to think about ways to prevent themselves and their businesses from getting in trouble.
What are some examples of stupid mistakes?
One that I talk about in the book, which is pretty dramatic and was really an event that led me to go off and write this book and develop out our custom legal department program. We were sitting around with some clients and talking about their business, and just at random I said, “Hey guys, how much insurance do you have? What’s your auto liability?” And they told me … I think they said it was a million. And I’m like, “Guys, you’ve got 30 loaded down Ford 550s which are the big, bulky Ford trucks out on the highways. You can’t have $1 million in insurance. That’s just not going to work. I mean, it’s not a question of if there’s going to be an accident, it’s a question of when. It’s just statistics.
And I freaked out, and sure enough, they went out and got more insurance, a whole lot more. And six months later we had a wreck. One of the drivers was not doing anything wrong really, but his truck hydroplaned. Horrible, horrible accident. And it was a company killer, but we asked the right questions, and we got in front of the problem.
Any examples of “stupid” and how to fix it?
Once I was talking with friend of mine, a client of mine, president of a big company, they do hundreds of millions of dollars in business every year. And I sat him down and said, “You know, you’re 52 years old. We don’t have a successor for the company as far as who’s going to run it, it’s family business. And you know, you think that the next president of the company’s going to be your son who’s at an Ivy league school, who thinks he’s going to be precedent of the United States of America. You know, he’s kind of an idealistic young lad right now, and he’s not going to be ready to be president of this company for another 15, maybe 20 years if he ever decides to. So, we need to start thinking about who’s going to run this company if something happens to you.” He said, “Yeah, you’re right.”
And what we just did is we looked at a management catastrophe and said, “Well let’s do something about it.” So, we went out. We hired two really qualified senior vice presidents, and guess what that did? That made the company stronger. And because of dealing with that vulnerability, we then went out and bought the competition.
What are the key takeaways from the book?
Key takeaways are, first of all, learn to recognize that your vulnerabilities come from one of those three areas. And if you just learn on the most basic level to ask yourself what catastrophes can possibly happen, and as you think through it, and I’m just going to interweave these because we use what we call The Business Immune System. That’s our 21-point analysis that we break the businesses that we worked down with, and we use it ourselves as well. Every quarter at least we’ll do it, usually more at various different meetings.
So, you think about the business vulnerabilities from a standpoint of what catastrophes can happen, and what are we not ready for. You can’t prevent them all, but you can generally prepare for them all.
Number two, what are we ignorant about that we need to know? For instance, last year we were completely totally ignorant about book marketing. This is our first book, and we’ve spent an enormous amount of time and energy getting educated, learning to master book marketing, and we’re still working on it because it’s one of our goals is using the book for marketing.
And then the third, of course, is ineptitudes, which is where we slack and let’s pay attention to what we know we need to do that we’re not doing.
And just starting to focus your thoughts on those three things can move you really efficiently through dealing with where your potential problems are going to come from.