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Living In Denial

Financial Planning

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Financial Planning article in Advisorkhoj - Living In Denial

How are newspapers dealing with the digital era globally? As usual the answer is as one would expect it to be in a fickle minded world. While some newspapers are dealing with it well, others are living in denial. In India the forecast of newspaper revenue is quite flat as compared to last year, more or less with minor growth but certainly not the way in which digital is exploding. The vernacular, low income rural parts of the country which have strong affinity for the newspaper will sustain this media vehicle for some more years in India. In some parts of the world there is a newspaper closing literally every day. So while news will continue to flourish and our desires to consume information will only grow, it is the format in which we consume the information which is set to change by huge proportions. Falling hardware prices coupled with easy access to a variety of points to a world that would look a lot different from what we have seen so far. The coming of digital age is a boon for advertisers who can now look for sharp targeting consumers and reducing wastage significantly. More bang for the buck. Whether it is the newspaper or the television, living in denial will only accelerate their demise.

Living in denial is a malaise that can be extremely damaging in the long run. Not only will it hurt the person who chooses to live in denial but along with him or her, the consequences of living in denial will bring down all those who are closely dependant or associated with the person. If the person happens to be the leader who is in a state of denial, then not only the leader but his followers too would land up paying a price for denial.

Denial manifests itself in several areas. There are people who bring themselves to defy “age” by choosing to believe that they are always 40 for instance. There are people who refuse to stand on the weighing scale because they can't muster up the courage to accept their weight. There are people who will wear clothes one size smaller because they are living in denial and not accepting that they have become obese. People develop defense mechanisms to justify vices such as drinking, smoking, reckless driving etc. There always seems to be a reason for doing what they are doing and being as they are. What they do all the time is popularly described as the Ostrich Syndrome because the moment the Ostrich gets to sense danger in the vicinity instead to fleeing chooses to dig its head in the ground so that everything in the vicinity is out of its view. Shutting one's eyes is therefore a mechanism for “denial” and quite obviously it is a pointless solution to a situation that needs to be dealt with otherwise. The basic premise for denial is to “run away” from the truth and to hold on to your perceptions of reality because the truth seems rather hurtful. When one is in denial mode then the tendency is to selectively search for evidence which supports his or her view and rejecting those which are contrary. This is a stage when the mind stops being rational altogether. Post retirement lifestyle changes or the inability to accept that one is not as efficient and smart as one in their youth are common examples of living in denial. When it comes to living in denial of a disease such as cancer, HIV etc. the consequences of living in denial can be fatal.

Just as people live in denial, in the same manner senior managers too live in denial. A business leader may be so accustomed to doing business in a particular way that despite early warnings, he chooses to lumber along in the manner in which he has been doing business. Kodak is a fitting example of a company that chose to look the other way, when it was fairly apparent that the days of printed photographs were numbered and the digital wave was gearing up to engulf the market. Kodak knew the future that was ahead of them. In fact they also had the knowledge and technology to get into digital. But they chose to live in denial and were eventually ousted from the market. Similarly Sony was caught with its pants down when Steve Jobs launched the iPod. Then again the Apple stole Nokia's thunder with the launch of the iPhone. For some time it appeared that both Sony and Nokia continued to live in denial but eventually it seemed to have dawned upon them that unless they change their products and way of doing business they would get extinct sooner rather than later. The story of Blackberry reeks of the living in denial syndrome and eventually having to mimic the leading brand in what appears like a last resort. Now we are seeing how the ranges of Samsung Galaxy products are giving Apple a run for its money. The ball now seems to be in Apple's court and it is up to Apple to innovate and leap frogs ahead of Samsung or else live in denial till the cows come home.

There are reasons why business leaders live in denial. To change the way things are done is a much more difficult thing to do and the temptation to lumber on seems more enticing from a short term perspective. However, the risk of living in denial is grave and can prove to be very costly. It is hence the trait of a visionary leader to prepare his organization for the future that his vision can gauge. The strategies of a visionary leader may appear daft to many because it is a few who can see the shape of things to come way into the future and strategic investments are the ones that would yield the best results when the one comes face to face with the future. When Apple was thinking “iPhone” it was seeing what Nokia was missing. And perhaps because Nokia was cruising along it failed to see the writing on the wall and rather chose to believe that the future would be the present.

Even today, how many companies genuinely believe that the strategies of yesterday won't be the strategies of tomorrow. The desire for the status quo is so enticing. It is imperative to gauge the difference between us and the youth, the Gen Y and comprehend the future from their perspective. What are their habits? What are their likes? What are their dislikes? In what ways are they different from us? These are the strategic questions that need to be answered while planning for tomorrow. Every delay is costly and perhaps will be the reasons for making an organization go extinct.

In cricket, I often feel that those who vehemently support 5 day test match format by terming it “real” cricket are those who are in a sense living in denial. The shorter version of the game is for the youth and the future belongs to them. Again those who speak against the aid technology or the DRS system are again living in denial. These changes are coming and nothing can prevent them from reshaping the future.

While living in denial may be incorrect it is also vital to realize that there still is a place for a person to step back and assess the changes taking place. Not every change is a defining one. There are also fads that come and disappear. There is always some room to analyze and research the facts before jumping into any conclusion. This is what skepticism is all about. It represents the “orange light” period – a time to contemplate, think and act. Denial on the other hand represents downplaying or completely ignoring known facts to the detriment of one's finances, relationships, physical and mental health. Denial begins as a natural response to loss, but becomes damaging and dangerous over time.

So what is the remedy for “living in denial”?

1. Accept the fact that this is a problem that has to be overcome. Examine the problem with honesty and come up with a plan of action.

2.Take the help of experts / professionals to help you recover from your denial mode. A counselor, a marriage therapist, a psychiatrist,   a doctor, an accountant who understands how bankruptcy is to be dealt with etc.

3. Cooperate completely and honestly with the professional help. Work with them and not against them by hiding facts. Dishonesty will derail the process. Understand and accept that they are professionals whose job is to help you and nothing else.

4. Create a plan with professional help and ensure that you follow it. The will and motivation to walk the talk is what will get you out of denial mode. So if you are planning a surgery, draw up a plan and go about it earnestly.

5..Act fast and purposefully on the plan that you work out along with a professional. The plan is to move from a denial mode to a positive state of mind. It is moving forward in the right direction. Hence there should be honesty and purposefulness in the approach. One should neither contemplate nor procrastinate. Being swift and agile in implementing the plan is the essence to emerge out of the denial mode.

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Dharmendra Satapathy

Dharmendra has just turned an entrepreneur. Prior to this he was Head-Marketing at Tata Asset Management. He is a Mechanical Engineer from University of Pune & MBA in Marketing from Symbiosis Pune. Spent the first 14 years of his career in advertising with Lintas, O&M and FCB. Entered world of finance 7 years ago. To help common man understand financial jargons he created Professor Simply Simple which has more than 100,000 downloads from across the world.

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