Why You Should Strive Towards Being Very Correct More So Than Being ‘Not Wrong’
During the pandemic, we were approached by a client to construct and deliver on a marketing campaign for them. This involved various aspects of brand marketing; from strategy, content development, influencer marketing to analytics and reporting. Our team began work on the project; strategising, developing a budget, etc…
It was then proposed to and approved by the client and then it was all down to the decision of pricing. My team crunched down numbers, factoring in production costs and profit margins, and planned to price the project at 28K USD. I then priced it at 89K USD and guess what? The client agreed.
Now, the team could have closed the deal at 28K USD. For example, if the production costs came up to 21K USD, we would have a 7K USD profit margin. To the average person, that doesn’t look too shabby, but why should you settle for just that, when you know the quality of what you produce is a lot higher in value to the market than that?
The problem here is that most people are often good at not failing. They’re good at trying new things, but only when there is very little risk of downside. They’re good at pushing themselves, but only when there’s no one around to see them fail. However, a problem arises when it becomes a lot more important to “not fail”, than to well and truly achieve success.
Each time you choose to avoid running the risk of failure, you are training yourself to avoid taking risks that could potentially lead to something bigger and better. You are training yourself to pass on opportunities of maximum potential, in favour of playing it safe. You are training yourself to use the fear of failure as a driver for decision-making.
Doing business, people become very concerned about being, not wrong. Unfortunately that is the effect of the education streaming and scanning system. We are conditioned to be as less erroneous in our ways as we can be, which in turn makes us lose focus on being as correct as we can be.
Based on this situation, if my team had closed the deal at 28K USD, it looks not bad, profitable even. However, I have witnessed this multiple times in my career; for example, sales pitches that could have been done at 10K, sell at 8K. Reason being, a lot of bosses don’t dig deeper and look at maximum potential. This could be equated to lack of experience or even lack of confidence. A lot of them gauge success based on a closed deal, as opposed to what that deal could have been worth.
If client X is willing to pay 100K USD and our business development officer closes the deal at 10K USD, there’s a 90K USD opportunity cost to the company. A mediocre business owner would congratulate them on a closed deal, instead of questioning why it was closed on a cost lower than the product/service was actually worth. Similarly, if a land is valued at 100 Million USD and we sold it at 10 Million USD, you definitely don’t deserve a pat on the back for closing the deal at 10 Million USD. If it’s valued at 100 Million USD and you sold it at 130 Million USD, now that deserves a pat on the back.
The same should be applied in business. Understanding this also helps you to value people, give credit and allocate rewards justly. The peril of valuing credit and rewards wrongly is that your business fails. From the hundreds of businesses that I have come across over the years, almost 90% of them have mediocre owners, which is why 90% of them shut down after a couple of years. It’s all dependent on perspective, with my team doing the budgeting and estimating 21K USD as production cost, from their point of view, we make a 7K USD profit. We close the deal. Job done. Profit made.
However in a parallel future, us closing the deal at 89K USD, with the same production costs, we profited 68K USD. While both parallel futures may be right, one sure looks a hell of a lot better than the other, right? In all honesty, the actual “right” number could have been a lot more, even 120K USD, maybe. Perhaps I shouldn’t be so arrogant as to think my ruler is the correct ruler, because what may seem right to me, may be mediocre to someone else. Something that looks correct may not be correct, with the right perspective.
Sometimes it’s worth it to take your shot. If your default approach in any given situation is to “not fail,” then you’ll find it really hard to ever truly win, because you’re conditioning yourself to think that it’s better to make an easier decision that’s “not wrong” than a difficult decision that has the potential to be right.
Sometimes “not wrong” is wrong.
*Scenarios used for the purpose of this article have been altered to respect the confidentiality of our clients.