"No basta decir solamente la verdad, más conviene mostrar la causa de la falsedad." Aristóteles
We might think that all decisions within a family business are guided by logic. However, in everyday life it is common to encounter false arguments that can be a source of conflict. To illustrate this situation, I want to share an African fable that came to me some time ago.
Once upon a time there was a hyena who, far from his herd, found a dead goat. She decided to hide it to enjoy it alone. When her companions approached, she lied to them saying: “I just feasted on a bunch of cattle that the townspeople threw in the garbage dump.” The herd, excited by the news, ran to the place, raising a great cloud of dust. The hyena, seeing such a commotion, fell into its own trap and thought: “What I told you must be true, I have never seen so much emotion.” So he ran after them, forgetting about the goat.
The hyena was a victim of his own false argument. In the business world, many family businesses fall into these types of logical fallacies that can divert them from their path to success. Below are some examples that will help the leader build a strategy based on solid and rational arguments.
1. Reputation is not an argument in itself
It is valid to argue based on what an authority says, as long as it is done logically and based on facts. However, many companies cling to “we have always done it this way”, falling into the fallacy of authority. A clear example is Pan Am Airlines, which failed to adapt to the modern market despite having been the largest airline in the world for six decades.
2. Betting on change does not mean heading towards disaster
Some family businesses refuse to make changes to their management, believing this will inevitably lead to chaos, which constitutes a “slippery slope fallacy.” A typical case is to think that the implementation of corporate governance will be an exhausting process that will result in the loss of control of the company. However, statistics show that 67% of organizations that opted for institutionalization achieved financial improvements.
“In the business world, there are countless logical fallacies that can derail a family business from the path to success.”
3. Being a pioneer does not guarantee success
When a family business seeks to expand, it can fall into the fallacy of believing that innovation alone guarantees results. This is dangerous if it is not accompanied by an adequate analysis of the information and a correct risk assessment. Lehman Brothers is an example of this fallacy: they irresponsibly bet on unsustainable mortgages, believing without evidence that their strategy would work, which led to their collapse.
Leading a family business in a conscious, responsible and rational manner is not an easy task. Intelligence and rigorous analysis of each situation are the essential tools of leadership to avoid falling into dangerous deceptions.
In the end, logical fallacies may seem harmless, but their impact is devastating. Curiously, the more convinced we are of the truth of our false arguments, the further they take us from success. Just like the hyena, sometimes the biggest traps are the ones you set for yourself.
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Twitter: @mariorizofiscal
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