Part 1 of this post I introduced the "GAG" rule to help entrepreneurs and others eliminate worry and fear. If you did not read Part 1, you should head over and do it now. In this post I give a personal example of how I applied the rule myself (before I gave the cool name) in my own business several years ago. To this day I employ the same process in all aspects of my life and it still works like magic.
A Real Life Example of the GAG Rule
A few years ago my company took on a large, $100,000 project. There was a great deal of expensive hardware involved and complex engineering services. There were also lots of eyeballs on the project as it was dubbed a test case for the technology involved. Success meant similar large projects and lots of positive publicity. Failure would mean just the opposite. We also had a very tight window to start the project. If we did not start by February 1, the project could be delayed until the fall or cancelled altogether. This in itself would be a huge failure. The stage was set, and the pressure was on.
We assured the customer that all was well and hardware would arrive on time to begin the project. This was in early December. The hardware needed to be ordered by late December to start the project on time. Then we ran into a snag. Because we were overextended on other projects that were invoiced but not paid, our bank would not extend our credit to make the purchases. No problem I thought. Just go to another bank. However, we forgot one important detail. All of our collateral was tied up with our existing bank, so no other bank would touch us. Not one to be easily deterred, I moved onto plan B.
I consulted with a real estate investor friend who offered to front the necessary funds. He just needed to close on a property, which would happen within a week or so. Problem solved. I assured the customer everything was on schedule and the project would start on time. So we moved onto other planning aspects of the project. This was around mid-December.
Christmas came and went and we were on the heels of New Year's. Now I was getting nervous. My friend had not closed on the property yet due to issues with his buyer but he assured all would be fine. Then, I received a call from him late one evening while still in the office. The closing was postponed until February. My heart sunk into my stomach as my body slumped over my desk. There were only a few days left in December and it was clear that I would not make my deadline. I spent the next two weeks frantically searching for a solution. Anyone reading this posting thinking to themselves, Well, why didn't you just [fill in the blank]. I tried that.
I sat at my desk in mid January alone in the office. It was well after 8pm and I was the only person in the building beside the cleaners and their whistling vacuums down the hall. I accepted the very real possibility that we would lose this project. Then, I contemplated the worst case scenario and started writing. I concluded the following:
1. A loss a $100,000 project, revenue that we were counting on.
2. Missed opportunities from other organizations monitoring the project. The potential loss would be in the hundreds of thousands of dollars.
3. Loss of credibility and reputation with the customer and the vendors.
4. Giving the impression that my company was in financial trouble.
At that point I decided I really had nothing to lose since the project was as good as dead anyway. For the first time in weeks I felt calm and relaxed. I decided I would make two important calls the next morning. The first call would be to my bank and the second call to the customer.
Nothing to Lose
I sprung out of bed the next morning and raced to the office. They say a man with nothing to lose is dangerous because he is willing to try anything. That is exactly how I felt, and it was truly liberating. So, I spent the next 2 hours on the phone with my bank making the case for them extending our credit for the hardware purchases. I'm pretty sure I made some enemies that morning because I let them know how I really felt about their arcane processes. But I will save that for another blog post. They finally agreed to extend half of the required funds. This was the most progress I had made in weeks but half was not enough.
I sat staring at the phone for several minutes. I needed to let the customer know about the problem, which would likely mean an immediate loss of the project. Then, something occurred to me. I had in my wallet a charge card with no preset limit. The upper limit was determined at the time of purchase and was based on credit score and previous spending patterns. Up to that point, I used the card for overnight travel and other minor purchases. I had never used it for more than $1500 in a single month and my average spending amount was far less than that. Being a charge card, the amount had to be paid back within forty days of the bill, which I did religiously without ever missing a payment. This was a long shot, but I had nothing lose right?
I called the company and explained my problem and asked them to test my upper limit. This is where they run a process on their end to see at what amount the purchase would get denied. Surprisingly it was enough to cover the remainder of the hardware costs with just a little bit to spare. It took every bit of discipline in me not to leap out of my seat and scream at the top of my lungs.
I could not believe it. After I hung up the phone, I leaned back in my seat to take in the entire experience. It had been a harrowing few weeks. It was at that very moment that I thought to myself, One day I need to write a book about all of these crazy experiences.
I eventually did make that second phone call. The one to the customer. I simply told them that all was on schedule but there was a slight possibility the hardware would arrive a bit later than expected but that we could continue working on planning and design. They were perfectly fine with the update and expressed enthusiasm with getting started. Then to my surprise the hardware arrived in the first week of February, far ahead of schedule!
Not until I got the information out of my head and on paper where I could analyze it, did I begin to make progress. Once I studied the worst case scenario, which was a real possibility, I realized it was not the end of the world and I could survive it. Most importantly, the process quieted my mind, making it possible to focus on other possibilities. Use the GAG rule whenever you run into a problem that paralyzes you with fear and worry. The GAG rule inspires action, which is a requirement for solving any problem.
Godspeed and I look forward to seeing you in The Players Loung.