Failure Friday: Death and Taxes Face Uncertainty

Rick Baldwin is the most interesting funeral director you will ever meet.  He is also an alum of the College, member of our Hall of Fame and part of the Dean’s Advisory Board.  You will also notice his name on a plaque on BA 1-239.  He offers the following story about failure in his industry….

It is more fun writing about the wins than the losses. Failure does not have a good taste! It is, however, often avoidable.

I read a newspaper book review this morning of a new book entitled Think Like a Freak. It reminds me very much of the ‘thought process’ that pervades in board-room thinking in most of the places I have spent my career. That self-affirming thought process has resulted in most of my failures.

The book makes a lot of points, but these three struck a chord with me, and they are helping me measure my own ways of critical thinking. The author says:

  1. Being confident that you are right is not the same as being right
  2. A sure sign of a bad predictor: dogmatism
  3. When someone is heavily invested in his or her own opinion, it is inevitably hard to  change that person’s mind

I have spent my life as a funeral director and in my role as a funeral director/businessman/investor, realize that funeral preferences are now changing fast, but that we (the undertakers) are changing slow. And our slow pace of change is mostly because of the three reasons noted above!

As background, it should be noted that from about the time of the US Civil War, until perhaps 1980, funerals were essentially all the same. A standard funeral service included embalming the body, purchase of a casket, viewing the body, a funeral ceremony in the chapel or church of choice, followed by burial at the local cemetery. Funeral homes were built with ecclesiastical chapels, owned expensive hearses and limousines, featured prominent downtown locations with large parking lots, and generally featured high retail pricing operated with generous profit margins. But in one generation, it all changed!

Because of the population bubble brought by the aging baby boomers, their affluence, the mobility of all Americans, and the relative predictability of the timing of death, funeral practices radically changed. Funeral directors were forced to compete on price (which was considered unethical for generations), buyers no longer wanted to buy caskets or view bodies or ride in limousines, and they preferred cremation with the ashes lovingly scattered in a favorite place. All those traditional funeral practices simply fell from favor. Notwithstanding, because it all happened so quickly, the traditional funeral directors were in denial about the new funeral preference. They thought the changes were temporary. As a result they were trapped with ownership of expensive assets and offered services that consumers no longer wanted to purchase.

As outlined in Think Like a Freak, in their denial arguments funeral directors thought they were right, they were dogmatic in their arguments, and they were heavily invested from a financial view.

For most of that time, I was right there with them.
The business failures I have experienced can be explained generally by the author’s points made above, and they include stubbornly retaining major investments in real estate, auto fleets, casket displays, chapels, parlors, and so on. We kept them because we too were dogmatic thinkers and because we were already heavily invested. We thought we were right and it was hard for us to change our minds. We ignored what our customers wanted to purchase because it was inconvenient for us ~ and our decisions were ultimately expensive!

We lost a lot of money being stuck in our own rut. So did the pay phone investors, and so did Mr. Blockbuster, and so are the drug companies of today who refuse to compete on price.

From here, I am taking-off my blinders! I now have free-thinking business partners. I am asking non-vested eyes to review my plans. I am asking independent thinkers to be critical of my ideas. I am adopting some better ways of seeing myself and my plans for the future. And I am hoping to avoid failures that are self-imposed!

 

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