I recently saw the movie The Darkest Hour. At its heart it’s about the anguish of making a decision. And what a decision! It depicts the dilemma Churchill faced before Dunkirk—whether to fight or whether to concede, knowing the consequences of both. It’s a decision he leaves to the very final hour, and on the basis of one conversation with the king he flips, and says, No, we have to fight.
I can only imagine the pressure of having to make a decision that is life and death for thousands of people. To save 270,000 men at Dunkirk, Churchill had to despatch a battalion of 4000 men to make a noise some 30 miles away from Dunkirk in order to draw the attention of the enemy—and all 4000 perished. The movie shows them composing a telegram to them saying, You can’t expect any support from us. You’re going to die.
There is no way to compare what Churchill had to face with the decisions we face in business and finances. That would be offensive. But the way Churchill went about making his decision does teach us something about how to combat the natural anguish that happens when making life-altering choices.
The decisions we have in business aren’t usually life and death. But they can cause anguish. And the anguish comes from not wanting to be wrong. The price of being wrong can be quite high financially. And you might lose the trust of your staff. You might lose customers. Your anguish might just be about getting distracted by the decision, because it takes so much time and energy.
So, how do we evaluate choices? Let’s think about how Churchill evaluated his.
Churchill began with his own opinion. He had a very firm opinion that Hitler was the enemy, even from the mid to late 1930s. He knew all along that Hitler wasn’t good news. So he acted on his opinion. He knew they had to fight.
People also have opinions when it comes to investing money. Take a couple investing in a rental property. I’ll show them the numbers, and show them how much it will cost per week to top it up. I’ll get them to assess the risk of tenant damage and rental arrears. That is all fine as long as you are of the opinion the property is going to appreciate in value. That’s not a baseless opinion. The assumption is it’s a good thing because people have done it before and been very successful.
Potential business owners apply the same logic to investing in a business, or even beginning a new one. They have a firm belief that they can make a go of it, that they have identified an opportunity in the market that they can address and, hopefully, make money from.
You must, however, evaluate your prior assumptions. What are they based on? Churchill’s opinion of Hitler was based on history, on past actions and words. When it comes to the property market we know that it isn’t always going to go up. We’re in one of those periods now where it appears to be a bit flat. The increase in value has stopped and it may even have slipped into a negative. However, we have enough history to know that in the long run, it will be worth it. When it comes to business, sometimes people are infatuated with the idea of running a business and think all their ideas will work in an instant.
This brings us to another vital aspect of evaluating decisions. That is, how to mitigate the risk. In terms of the property market, it might be a case of asking what happens if the property price does go down? How can you weather the storm? It usually comes down to your income stream and how good your deposit is. If they are strong, you can make the decision that you can weather the storm because, while there might be a short term downturn, long term there will be an increase in value. In a business, risks are mitigated by planning well, by researching the market thoroughly, and by seeking advice from qualified business advisors, coaches and mentors.
Churchill was willing to sacrifice the few for the benefit of the many. He sacrificed 4000 to save 270,000. Four thousand lives is an awful lot. But that enabled him to have an army to fight on with. That’s how he mitigated the risk.
As The Darkest Hour shows so well, history was on a knife edge. The same can’t be said about most of our financial decisions. It’s not so life and death. But they can cause a lot of anxiety. Thankfully, we will never be in Churchill’s shoes. But there are some things to learn from how Churchill came to his decisions—by acting on his own assumptions, insight and informed knowledge, and mitigating his risks—that should inform how we tackle the financial decisions that are likely to make a significant impact on our lives.