You may remember the soothsayers described in ancient history who could predict the future. When they made pronouncements, their audience was comforted by having the scary unknown future become known. Thus, the name, sooth-sayers. They soothed the audience by putting fear of the unknown to flight.
The True Nature of Worry
The human brain is a problem-solving instrument. It learns from experience, abstracts future dangers, and takes measures to avoid potential pitfalls. You only touch a hot iron once as a child before your brain tells you not to do that again. Any danger the brain remembers and can foresee it takes immediate measures to avoid. It’s a problem-solving machine so it also looks for problems, imagining dangers. Because of experience, it looks for events in the future that it cannot see so it starts to worry. It is trying to solve a problem it hasn’t yet identified. Worry is like a motor racing without the gears being engaged.
Contractors Worry
All contractors recognize the risky nature of construction and take measures to mitigate the risks they can see and predict. We are good at solving problems when we know what the problems are. However, in the back of our mind we know that every project will produce unexpected and even unimagined problems.
Most construction professionals believe that their ability to react to unexpected setbacks when they occur will make the difference between success and failure. They are mistaken. Once a risk factor has occurred it is too late to avoid it or its impact.
Every construction project is fraught with risk. No one can prevent it, but risk can be predicted and avoided. An experienced CFO uses financial analysis to predict future risk and can install measures to mitigate the negative impact.
The Las Vegas Soothsayer
The reason that Las Vegas sports books always make money is because they employ risk experts who are skilled at recognizing and handicapping future risk. Such esteemed handicappers as Billy Walters, Vegas Dave, “Krackman”, Bryan Leonard, and Drew Martin have been seeing into the future and predicting sports outcomes successfully for years by recognizing and weighing the risk factors that determine who wins and who loses. They can beat millions of sports bettors across the country because they utilize risk prediction data and analysis that is far more accurate than the gut instinct used by most sports bettors.
The Construction CFO
The human brain worries about dangers it knows are lurking, but that it cannot see. Worry, however, is not problem solving. Experienced construction CFOs, like Vegas handicappers, are soothsayers who can predict future outcomes. They are trained in a specialized system of statistical and financial analysis that can foresee hidden future financial risk and install preventive measures to avoid and mitigate negative impacts. The CFO plays the same role for the construction CEO as the odds maker plays for the bettors on the Strip. The function is the same. Only the location is different.
If You Are Worried…
If you are worried weekly that you won’t have enough cash to meet payroll, or pay subs or material suppliers, experience has taught your problem-solving brain that a cash shortage is always lurking in the future. You just don’t know exactly where or when.
You already have someone on your team who can look into the future and assure you that all developing cash needs have been considered and will be met. Even if you don’t understand exactly how your soothsayer does it, you would certainly welcome the opportunity to be worry free and leave your creative mind to solve other problems in the present.
And You Can’t Sleep…
The problem-solving brain never turns off. Even when you’re sleeping your brain is working to figure out where you’ll get the cash you didn’t know you were going to need this month. Every contractor I have ever known has this constant worry night and day. If you don’t, you’re really in the dark or you already trust your professional risk manager.
Count Your Blessings…
If you do trust your risk manager (CFO), count your blessings. Vegas handicappers set the odds in their favor because they are expert at identifying, analyzing, and pricing future risk. CFOs specialize in the same analytical service for contractors. They take the guesswork out of cash flow management and offer the contractor’s brain relief from worrying and the space for creative problem solving. If you are lucky enough to already have one of these soothsayers on your team, listen to their pronouncements and count your blessings.
Next Week
Next week we’ll reveal the construction soothsayers’ (CFOs) prediction techniques and demonstrate how they can predict the future and eliminate nagging worry from the contractor’s daily life.
For more information on recognizing risk, read more at: RISK
For a broader view of the construction CFO, read more at: CFO
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Please circulate this widely. It will benefit your constituents. This research is continuous and includes new information weekly as it becomes available. Thank you.
