Fear is usually considered an irrational emotion, and with good reason. When people are frightened, they often make rash decisions that turn out very badly. The perceived danger may even be less harmful than the fear motivated action taken to counter what may be only a mirage. Business people acting out of fear of loss often pose a great danger to their own organizations. Fear can cause a good company to strike out, on a very bad pitch, well outside of the strike zone.
Fear of loss appears in several forms. Some versions of the phenomenon are very overt and high profile in nature. Other varieties are more insidious and affect decision making in more subtle, and often very deady ways. In any case, business people motivated by fear of loss, and very often without any positive plan of action, can doom their company to failure. The resulting loss is precisely the one that was feared the most.
Overt fear of loss appears most often during times of crisis, or more importantly, during times of imagined crisis. For the business person who fears loss, potential threats appear seemingly from everywhere at once. The perceived threats may not be substantial at all, but to the business owner operating in fear crisis mode, the scenarios can seem very real indeed. Even worse, the entrepreneur on high false fear alert is very likely to ignore more rational advice from business associates, bankers, employees, and other advisors. The irrational response will be that no one understands, and the fear driven person may shut off all other input entirely.
In those isolated circumstances, the fear driven person is likely to make decisions, and hand down orders, that make little sense to the staff. Fear begins to grip the entire organization, as employees keep their heads down and avoid making any mistakes. In irrational times, anyone could be dismissed for any reason, including making the right decision that would benefit the business and its customers. When bogeymen are seen lurking everywhere, good ideas and good people are all too often the acrificial lambs.
A more insidious version of fear of loss works like an invisible hand in every decision made by the business person. Decision making becomes very centralized, as no one else can be trusted to make any choices, or present any ideas. After all, to the loss fearing individual, everything and everyone can be an agent of loss. Delegation of responsibility becomes only a pipedream as no one can be trusted to do the job properly. Instead of letting staff members handle routine tasks, and provide input for business direction, employees are seen as untrustworthy. No one can do the job like the owner becomes the norm.
Good people soon discover their opportunities in such organizations are clearly curtailed, and other employment is sought. Customers and clients feel their concerns and needs are not being met, and vote with their feet and wallets to a competitor. The business enters a death spiral and the fear of loss becomes a self fulfilling prophecy.
Don't let fear of loss cause you to make irrational decions, and to fail to follow a solid business plan. There will be rough patches in any business, but they are succeeded by growth and prosperity. Trusting your staff and advisors will prevent that loss fear from gripping your company by the throat.
Fear of loss simply results in failure, which was allegedly what was being avoided at all costs. Don't let it happen to your business.
