The Curve of Learning

At any moment in time we are the sum of our previous dreams, thoughts and actions. Whatever happens to us over the next 5 years will make us the sum total of what we already are plus those 5 years dreams, thoughts and actions. And, in line with the universal principle of cause and affect: where our thoughts are causes, our resulting conditions are effects.

Everything that happens to us, whether good or not so good, develops our learning curve path. And the harsh reality is that we learn more during a downward curve than a rising curve. There are 2 very important keys however:

1. Whether we choose to learn from that downward curve – which we must, and...

2. Understand the WHAT and WHY that led us inexorably towards that learning curve!

I have experienced both the liquidation of a company in 1986 and personal bankruptcy in 1991.

From 1987 to 1990, however, I built my company to bigger than it was before 1986. The question is therefore: Did I learn from my learning curve of 1986? The answer is YES and NO.

Yes, because I was to learn from what went wrong, regroup and do it again. No, because the fact was that it did happen again.

The first time was because my Bank collapsed and my overdraft facilities and loans that my company was absolutely dependent upon were immediately recalled. Now at that time I took full responsibility – there was little point in blaming the bank: A major borrower had taken the bank to the cleaners through default (the borrower actually committed suicide – which is not a good way out and bankruptcy is by no means a fate worse than death). Over the ensuing months I was able to liquidate all my assets – although at below par value – and honourably clear my debts.

That is why I was able to get back on my feet so quickly as I won the support of other banks through my clear expression of integrity. From a personal perspective I went from a 4000 sq ft Victorian Mansion and nice cars to living in a 250 sq ft apartment and an old small Renault. Within 2 years I was living in an Edwardian Mansion overlooking the river with land and Jaguar cars again.

I worked very hard, very hard indeed – but many people work hard, very hard and if that was the main prerequisite for success then everyone that worked very hard would enjoy success.

I was certainly driven by my ego to re-establish what I had lost as soon as possible. In which case I had probably not built a firm enough foundation to sustain such rapid growth.

In the major recession of the early nineties interest and mortgage rates were around 14%. Nothing was selling and my portfolio of commercial rental properties I had built – which was providing an annual return of £650,000 (and that was over 20 years ago) was committed to an even larger development in conjunction with another developer. That developer, Rush & Tomkins, a 130-year veteran and leader in the UK construction industry, went bust. Sun Alliance forced me into personal bankruptcy, then sold my portfolio at a 60% discount to another developer.

Being seriously wiped out this time with the hardship of being Bankrupt (which was a real impediment over 20 years ago) it took me 5 years of moving around from cheaply rented accommodation in a borrowed car before I could get back on my feet.

Even though I earned some pretty serious money by many people’s standards so much was committed to repaying debts – which I did not have to do, due to being a bankrupt, and to the chagrin of my family. However as far I was concerned at that time, it was ultimately my responsibility.

What did I LEARN from these traumatic experiences?

I learned that it was my lack of business experience. I was too nice and believed everyone else was like me. On both occasions partners had reneged on deals – literally lied to my face. I now no longer take things at face value and never have another business partner that I do not have full contractual agreement with. It is better to own your company, than give it away to someone that promises to bring something to the table, vehemently believes they do, yet ultimately have loyalty only to themselves and their own agenda. They do not have your passion or belief.

Now, clearly there are exceptions and my wife, Roni, whom I have known since we were at school, is a partner in the full sense of the word because she has fully shared in all the traumatic experiences that I have brought upon us.

And that is the key point I learned...
That I brought them upon myself.

Certainly I have learned considerably more in going down than in going up – however I brought it upon myself. Looking objectively and dispassionately at the records it was clear to see that the Bank was in error in my first liquidation, as they over-extended themselves and I was caught in the line of fire. However, I believe, that to be in the wrong place at the wrong time is down to us.

We have, perhaps unwittingly, misguidedly and often unintentionally put ourselves in that place. But the harsh reality is we find ourselves in the line of fire because of earlier thought and actions.

Upon reflection I remember thinking, again and again in 1986 and in 1990 that I must not go bankrupt. Clearly there were warning signs I had become aware of – after all we do actually know our business position better than a bank – yet I was, perhaps not consciously, ignoring them. I carried on doing the business in the belief that I would get through. I should not have overstretched and expanded so quickly and made myself dependent on one funding source.

I then did not learn from my previous learning curve. To happen again within a 5-year period it had to be wrong thinking and action. And I was the common denominator in both situations.

It is very important to welcome challenging times as the best learning curve – so long as they are dissected and analyzed to the actual learning to be gained within the curve. Furthermore it is vitally important whenever embarking on a new venture to be very clear about the what and the why that are motivating, directing and driving us towards it.
Business is by far the greatest of all arenas to test our mettle and build courage, resilience and determination. Your business, your venture, your dream is the vehicle that you have chosen to fulfil your potential. What is important is that you are master of where your business is driving you to, and not its slave taking you somewhere that is not a good place for you.

For this reason business must be continually monitored with clear systems put in place. Systems that flag up well in advance when something is leading you in the wrong direction. Though I relied on blueprints to build house and offices, I did not have, as with most other businesses, a clear operational and financial plan. I learned that to my own detriment.

Many businesses are forced to cease trading every single working day in the UK. Nobody actually plans to do that consciously. No-one wants to witness hours of blood, sweat and tears in the arena they have chosen to put part of themselves into become wasted and lost.

Nobody starts with that plan in mind. But the question is raised: Did they actually have a plan? And perhaps that is the main point, because to revisit that proven worthy adage:

When you fail to actually develop a watertight plan,
you must be, by definition, actually be planning to fail.

But there is a real point of value: we would never become the person we are fully capable of becoming without enduring learning curves. They are the furnace in which our mettle is tempered into cutting edge steel.

Without them we remain dull iron. The secret is to embrace them, understand, learn from them – and above all – harness them to move to higher heights.

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