Success Is Not Guaranteed

J. Keith Hughey


Volume XXI, Number 12 (Issue 1016) March 20, 2023

Success Is Not Guaranteed

Vague dreams, nurtured, shared, refined, instilled, and zealously pursued should be a reliable prescription for success. Unless you make the mistake of leaning your ladder against the wrong wall. My point is a strategy, no matter how well executed, can nevertheless end in disaster if the goal is ill-conceived, the effort ill-timed, or the potential risks not appreciated, understood, or managed.

For example, lots of businesses, especially in the hospitality and retail sectors, suffered, and many closed during the COVID pandemic for reasons beyond their ability to anticipate, control, or manage. For some, the government’s intervention efforts were the sole difference between failure and the chance to fight another day.

Similarly, during the notorious down cycles in the oil patch, almost every energy- related company in the exploration and production sectors of the industry, be they large or small, have taken dramatic steps to survive. Yet for those that were excessively leveraged or otherwise poorly managed, cutting back didn’t result in eventual success. When you study it, practically every sector in our economy, other than governmental entities, experience ups and downs. Even those presumed to be recession proof can, at times, find themselves at the mercy of budgetary constraints and shifting needs and priorities.

Turning to today’s news, much of the coverage has focused on several large, but non-systemically important banks that have failed. There is evidence other financial institutions (“FIs”) may be in similar straits. That is troubling for many reasons, not the least of which is the central role FIs play in our local, regional, national, and international economies. Regardless of their size, or perhaps because of their differences, they all have key roles to play. Whether some go by the wayside or get bailed out remains to be seen. But having spent my entire career in and around the financial services industry, I can say with incredible certainty the causes of the latest banking failures are complex, meaning there is ample blame to go around.

While there will be multiple post-mortems to come, it is safe to say a primary factor and common denominator in the latest group of bank closings is a compendium of risk management failures, i.e., a virtual primer of what not to do. In the interim, some of the guilty parties will go to great lengths to shift the blame, if not entirely excuse themselves of any culpability. But do not let their protests or claims of innocence deceive you. Risk management mistakes are management mistakes.

Soli Deo Gloria

“Be very careful, then, how you live—not as unwise but as wise, making the most of every opportunity, because the days are evil. Therefore do not be foolish, but understand what the Lord’s will is.” Ephesians 5:15-17

J. Keith Hughey

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Transforming Potential into Unmatched Performance
Copyright 2023 by J. Keith Hughey. All rights reserved. Permission is hereby granted for reproduction and redistribution of this essay as provided under the copyright laws of the United States of America. The entire early library of Monday Morning Musings issues may be found at Your comments are welcome and encouraged.

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