May 12, 201401:45 PMMind Your Business
with Corey Chambas
The power of ‘why?’
(page 1 of 2)
Four-year-old kids are famous for asking “why?” Some kids will continue to ask “why?” “why?” “why?” until eventually the parent exasperatedly exclaims, “Because I said so!” Well, as frustrating as it might be, that 4-year-old is on the right track. “Why?” is the key question a person needs to ask to learn and grow intellectually.
Last week I was interviewing a potential recruiter who talked about the key personality trait of their staff being curiosity. This intrigued me, as I believe this is also a key personality trait for a good commercial lender. Of course, I had to ask myself “why?” and it got me thinking about the power of “why?”
In my business, a commercial lender needs to fundamentally understand if a business will succeed, and curiosity and asking the question “why?” are key. For example, many businesses will optimistically project improved results in the future. Rather than just taking that projection at face value, there needs to be good rationale for why that would be the case, and the lender should ask “why?” And it shouldn’t stop there.
Say the answer to the first “why?” was improved gross profit margins. The lender then needs to ask why that will happen. The response to the second question might be something like, “They’ll be increasing prices.” Again, the lender should continue thinking and asking more questions such as, “Why didn’t they do it last year if it’s that simple? And why wouldn’t customers then go to another supplier?” Like the 4-year-old, the lender needs to continue to ask “why?” until he or she fully understands.
The importance of this in our business is twofold. Not only do you get the information necessary to make a good lending decision, you also gain business knowledge that can make you a better business advisor and enhance your ability to help clients succeed.