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[This post is part of a series on business…for business owner/managers and their lenders.]

If you came of age in the late ’60s or early ’70’s you may remember the rallying cry: “Question Authority”.
HippieGirliStock_000007293636XSmall.jpgIf your parents came of age then, they may not have passed on this wisdom from their hippie days. Or if they did, they changed it up: ‘Question authority, but not mine!’

It would be great if more people working at Enron and Worldcom had taken the idea of questioning authority to heart.

Recently I was reminded about how easy it is to accept the judgment of the leaders.

The Ten Essentials of Business by Linda Keith CPA

For my kayaking readers, here was the plan for the day. [Or you can skip this paragraph and still learn the lesson.] 12NM (nautical mile) paddle out of Fair Harbor, WA. Circumnavigate Reach and Stretch Islands. Cross Case Inlet (1 NM) and explore, then return. A check with NOAA that morning gave us this forecast:
SW Winds 10-15 KT (Nautical miles per hour, also called ‘knots’), waves 1-2 feet. Possible showers and TSTRM (thunderstorms) in the afternoon.

Thunder and lightening…can you hear it?
As we prepared to leave the house at 7:40am there was thunder…and lightening. My husband suggested being in the water in a lightning storm was a bad idea. My reply: “Our trip leaders, Bob and Caroline, have 30 years experience kayaking. I’ll trust their judgment as to whether the storm has blown over.”

How tall is this Porta-potty?
As we were first there I wandered on over to the Porta-potty. (Can I really write this in a blog. Hmmmm. Oh, sure!)

As I sat there I heard a tremendous clap of thunder seemingly right overhead. I wondered for a moment if lightening would choose the Porta-potty to go to ground. How embarrassing. Somehow getting struck by lightening while kayaking would be more … acceptable.

Our fearless leader arrives…
Along with the other 8 paddlers, we discussed what to do. Bob was inclined to go. Several people had rented boats. For two, it was the qualifying ‘experience paddle’ that would allow them to graduate from our sea kayaking class. We had driven over one hour to get there.

He thought he could modify the paddle to eliminate the crossing, the greatest threat of a lightening strike. Vern had a brand new boat and really wanted to try it out. The wind had just died down, the clouds seemed to be parting.

The newer paddlers expressed their concerns, so we decided to go to a restaurant for coffee and give the storm an hour to move on…or not. Then we would decide.

Lightening.pngIt was beautiful!
The last time I saw such a dramatic thunder/lightening storm was over the Great Salt Lake in Utah.  Loud thunder so close that our coffee cups rattled.

One by one, paddlers made the decision that even if others went, they were going to head for home. At 10:02am Bob canceled the trip.

The pressure’s on…
As our trip leader, Bob felt bad that many of us had traveled over an hour to get there, rented boats, and counted on this trip to graduate from our class. 

The less experienced asked the right questions this time…
I train lenders on tax return analysis for making good loan decisions on business loans. When working in groups, I remind the newer lenders to be sure to speak up and not assume that a more experience lender is seeing everything or evaluating the impact correctly.

This time, the less experienced paddlers questioned authority, and they were right. The best leaders want you to question authority if you see something amiss.

You may not always be able to cancel the trip as this group did, but at least you’ll know you spoke up.

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Linda Keith, CPA

Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis.
She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans.
Creator of the Tax Return Analysis Virtual Classroom at www.LendersOnlineTraining.com, she speaks at banking associations on risk management, lending and director finance topics.