First, full disclosure: The idea of equating emotions to elephants is not mine. In his book, The Happiness Hypothesis, psychologist Jonathan Haidt suggests that our emotions are like elephants and our intellect their riders. He argues that emotions can be stronger than intellect and can motivate our actions, especially when we don’t acknowledge their existence.
As I read Haidt’s arguments, I realized how emotions affect our financial decisions. Every day I work with business owners who struggle against emotions such as fear or powerlessness (just two examples) to achieve their financial goals.
Let’s look at one emotion, or elephant: powerlessness.
Tony and Angela Marino operated a carpet cleaning business that had started to struggle after years of robust growth. As cleaning options increased (e.g. carpet-cleaning machines available for rent at grocery stores) their business steadily lost market share.
When we met, Angela, the woman I’d always known to be a take-charge person asked, “Pat, what are we going to we do?” After offering several strategies for their consideration and pointing to competitors who had adjusted to new market conditions, I concluded, “You need to make some changes.”
Tony responded, “People always used us because of our excellent reputation. The calls poured in.” As soon as I could interrupt his description of the good old days, I chimed in with a statement that often flips the switch for business owners who feel powerless to confront change, “What has always been is different now.”
Name The Elephant
The Martinos are typical of business owners who feel powerless to change course, even when surrounded by evidence of the need to adjust. The Powerlessness Elephant had the Martinos cornered, they didn’t know it, and, not surprisingly, they weren’t budging.
Mobilize Your Resources
Unable to find a chink in their armor, I tried a different tact. During a meeting of a business owners’ coaching group that we all belonged to, the owner of a small printing firm (who, with our help, had transformed his business in a declining industry) described what he had done to turn his business around. I asked this owner to talk with the Martinos afterward.
Apparently, the printer got through the chink I could not. The day after, Angela called me saying they were open to upgrading their marketing efforts and expanding their services. We set up a time to discuss my suggestions that found no traction during our first meeting.
Develop A Plan
In my subsequent meeting with the Martinos, there was energy in the room. They were interested in advertising and creating a strong website backed by social media. They were willing to train their service techs to spot opportunities for additional services on site. They agreed to identify one or more new products or services that would diversify their business and tap new markets. We put all of these ideas in a plan, put deadlines on all tasks and identified experts who could help the Martinos on a consulting basis. Most importantly, we set financial goals for each action and dates to monitor progress.
Signs Of The Powerlessness
Stubborn resistance to change is just one sign of the Powerlessness Elephant. Others include:
- Paralysis
- Actions that sabotage one’s long-term goals
- An unwillingness to believe that the right answer may also be the painful answer
Powerlessness is not an emotion reserved for business owners. Couples and individuals facing important financial decisions of all kinds can be cornered as well.
If you have ever felt stuck while trying to sort out some money matter in your life, or you find yourself unable to change when everything around you tells that you must, I suggest the same steps the Martinos took:
- If you are stuck in the face of a decision or changing circumstances, know that an emotion–one as big as an elephant–could be standing between you and your goals.
- Take advantage of the resources and guidance available to you. Call your financial planner, a business coaching group or a trusted mentor, and listen to their observations.
- Develop a written plan, with benchmarks, that takes you from where you are to where you want to be.
Don’t let an elephant stand between you and your financial and business goals.
Patrick Carroll, CFP ® , CExP is the founder of Obsidian Business Solutions, author of Tame Your Money Elephants (Apple Ridge Press, 2016) and creator of The Lifestyle Protector Process TM. He helps business owners grow their companies and meet their post-business financial and life goals. You can reach him at Patrick.carroll@obsidianbusinesssolutions.com or 301.990.1165.