Conventional Thinking

“And then what?” - Young Jeezy

Let’s face it. Conventional wisdom often sucks. It’s too simplistic and can rarely be applied in practice.

One of the more popular sayings in the business acquisition world is “do no harm”. This is in reference to the first 6 to 12 months after acquiring a business where most people say, you shouldn’t change anything. You should sit back and learn as much as you can. Then implement changes after that waiting period.

I reject that. It’s too simplistic and following it blindly will cause you some serious pain in certain circumstances.

So what’s Chesterton’s Fence?

Chesterton's Fence, named after the English writer G.K. Chesterton, and here it is in his own words:

“There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.””

In plain talk: Change should not be made until the reasoning behind the current state of affairs is understood.

This is the basics of second order thinking (which I learned exclusively from hip-hop philosopher Young Jeezy). Assessing the consequences of an action and then thinking, “And then what?”

Fences aren’t constructed on a whim. A fence is planned, thought out, materials are bought, and someone has to put in the labor hours to build it. It is your job to find out why they did so.

Chesterton’s Fence is a much better heuristic for analyzing whether or not change is needed after acquiring a business. It requires thoughtful analysis for each decision point. Not some random time frame that doesn’t take into account your situation.

In our latest acquisition (a commercial cleaning & floor-care company) we noticed some things right away that we thought may need changing. One was moving all of our company files and documents to the cloud. The previous owners kept paper records for everything. Big Iron Mountain boxes stacked up in the warehouse.

1st Question: Why?

Well it’s the way they always did it. They felt comfortable working this way. They knew where everything was.

2nd Question: And then what?

Well we knew we would need to train the staff on using the cloud and they may be resistant to that. But a flood or a fire and literally all of our customer information would be gone. And that information is very valuable to several teams including ops, customer service, & sales.

So week 1 we ripped the band-aid off. Conventional wisdom would’ve said to wait 6 months but we asked ourselves: why the fence was there & what would happen if we removed it? We were satisfied with the outcome of removing the fence and we did.

One caveat to this is you want to earn trust from people before making a bunch of changes and you also want to communicate why those changes are happening.

What are some changes that you need to make in your business?

Think about them and use the Chesterton Fence heuristic to see what consequences will come from you making that change.

**Shoutout to John Seiffer @BetterCEO who introduced me to the Chesterton’s Fence concept and is a great follow on Twitter**

Three Interesting Finds This Week

Elon Musk’s 7 Min Meeting Format

Not Offshoring Is Costing You $1.5M

How a PE Shop Used Analytics to Generate $$$

Kicks I’m Feeling This Week: (Nike AM1 “Clear Jade”)