‘No’ means being able to commit to ‘Yes’
Published: July 25,2010
In 1994, Quaker Oats purchased Snapple for $1.7 billion. They hoped to replicate the success they had with Gatorade. However, they failed miserably. After three years, Quaker Oats sold Snapple for just $300 million. In 1998, Daimler Benz merged with Chrysler to create Daimler Chrysler for $37 billion. However, by 2007, Daimler Benz sold Chrysler to Cerberus Capital Management, a firm which specializes in restructuring troubled companies, for only $7 billion. These are just two of numerous stunning failed business decisions. In the last few years, we have watched large banks write off billions of dollars of assets for bad loans, many caused by poor decisions. While large companies can often endure such stunning losses and still survive, most entrepreneurs don’t have that margin of error. A costly decision can prove fatal. This points to one of the most powerful words in an entrepreneur’s vocabulary — “No!”
The power of no is much easier in theory than practice. We all have personal bias that impacts our decision making. Deal momentum is also a powerful force that can lead us into dangerous decisions. Negotiating gurus William Ury and Roger Fisher in their book “Getting to Yes” remind us that we should never lose sight of our BATNA (best alternative to a negotiated agreement). We must be wary of pride and greed, which lead to countless mistakes in business. The reality is that saying no is actually a positive business strategy.
Michael Heidelberg and his team at Cardinal Ventures understand the power of no. Michael began his career in public accounting with KPMG and earned his CPA. He honed his analytic business skills when he moved into the wireless industry. He then furthered his real estate deal-making skills with Yates Construction where he worked in investments, mergers and acquisitions and development. In 2004, Heidelberg launched Cardinal Ventures, a real estate development and management company, and joined forces with Mack Mitchell, also a CPA, and Edgar McKee, a construction manager. Harrison Young left architecture to join the company in 2007. Cardinal Ventures originally consulted on real estate projects in Orange Beach, Ala. After navigating through the real estate downturn, the company focused its efforts on developing The Blake, an assisting living company with locations in Gulf Breeze, Fla., Ridgeland and a third one opening soon in Malbis, Ala. These are high end, 100-plus-unit facilities providing assisted living and Alzheimer’s care. The projects have been well received and the company is considering additional expansions of the concept.
Heidelberg noted “we look at a lot of development opportunities. We only proceed with projects that we have a high level of confidence in. It does not take many wrong decisions to put a small company in jeopardy, especially in this economy.” The Cardinal Ventures team knows their core strengths and competencies. Heidelberg added, “We try to identify the critical drivers that most impact success and decide whether or not we can excel in those areas.” Exercising the power of no takes discipline and focus. You have to be able and willing to do the extensive data collection and detailed analysis to really understand opportunities. In a very challenging financial environment, Cardinal Ventures has continued to get needed financing because of the creativity and perseverance of Heidelberg and his team and their candidness with investors about both opportunities and risks of projects.
I am encouraged by the success of Cardinal Ventures and the next generation of Mississippi’s entrepreneurs and developers that they represent. I am sure they will continue to have a positive impact on Mississippi business for years to come. We all could probably use additional practice on saying no. As entrepreneurs, we want to build and grow things, and saying no can be quite a challenge. However, we all have finite time and resources, and, to maximize our impact, we need to learn the power of “No!” in order to fully commit to the opportunities where we say “Yes!”
Martin Willoughby, a business lawyer in Jackson, is a regular contributing columnist for the Mississippi Business Journal. He can be reached at firstname.lastname@example.org.
To sign up for Mississippi Business Daily Updates, click here.
FOLLOW THE MBJ ON TWITTERMy Tweets
Top Posts & Pages
- UMMC reaching out after death of high school football player
- Former Godwin CEO Danny Mitchell dies at 66
- Thousands of acres of Delta farmland to go on auction block
- Northrop Grumman lands $354M Air Force contract for Global Hawks
- Tragedy for Jackson Prep: Football player Walker Wilbanks dies
- Board files suit against VA over release of patients' names
- MDOT: Work on I-269 is on schedule, several phases at halfway point
- City trying to determine who has authority to spend gaming money
- More school districts join MAEP lawsuit brought by Musgrove