Rule #6: Going Concern
When you first hear the term "going concern" in the business world, it usually means that there's nothing to worry about regarding a company's future. Ironically, the phrase often triggers the opposite reaction, making people uneasy about a company's stability. But what does "going concern" actually mean?
Decoding "Going Concern"
In accounting, "going concern" refers to the assumption that a company will continue its operations for the future periods, typically at least for the next twelve months. This principle allows businesses to prepare their financial statements under the premise that they aren't facing imminent closure or bankruptcy. To put it simply: the music is playing and it will continue playing for a foreseeable future.
A Walk in the Park
I remember an afternoon stroll with my friend Fuad, someone whose insights into life and career choices I deeply value. As we wandered through the park, our conversation drifted toward our personal anxieties about the future—those nagging "what ifs" that keep us up at night. I was in a middle of a career shift, with potential relocation ideas. He was in the middle of a transformation battle of his own.
During this particular walk in the park Fuad shared a perspective that stuck with me:
"You know, most of the time, things turn out okay. We tend to focus on potential negative outcomes, while for the most part of our lives things turned out to be…okay. We are where we are today, because somehow things turned out okay”
His words resonated. Reflecting on my own experiences, I realized that many of the scenarios I'd fretted over had either resolved themselves or never came to pass. The countless hours spent worrying were, in many cases, unnecessary.
The Toll of Constant Worry
While it's natural to experience concern about the future, persistent anxiety can have negative effects on both mental and physical health. Chronic worry, also know as anticipatory anxiety," is characterized by excessive fear about potential negative events that may never occur (never is the key word here). This state can lead to heightened stress levels, impaired decision-making, and a diminished quality of life.
Research indicates that our minds are prone to overestimating the likelihood of negative outcomes. This tendency, known as the "simulation heuristic," involves mentally simulating worst-case scenarios, which can amplify perceived threats and exacerbate anxiety. Such patterns by themselves can create a feedback loop, where imagined fears feel increasingly real, leading to even more stress and avoidance behaviors.
Moreover, studies have shown that a significant majority of our worries are unfounded. For instance, a study published in Psychology Today found that 91% of participants' worries did not come true, and of the remaining 9% that did, the outcomes were often better than expected.
Embracing the "Going Concern" Mindset
Since that conversation with Fuad, I've adopted a personal mantra: "Life is a going concern." In other words, despite the uncertainties and challenges, life tends to move forward. Businesses operate under the assumption that they'll continue to function, and perhaps we should approach our personal lives with a similar mindset.
This doesn't mean ignoring potential risks or failing to plan. Rather, it's about recognizing that excessive worry about the unknowns of the future often doesn't change outcomes—it only diminishes our present.
As a manager, evaluating and understanding potential risks is part of your responsibility. You need to identify threats, plan strategically, and guide your team accordingly. But constant anxiety about uncertainty can quickly become paralyzing—not just for you, but for your entire team. Fear and anxiety in leadership are highly contagious; your team senses it, internalizes it, and mirrors your behavior. Instead of moving forward confidently, they become hesitant, cautious, and less effective. Your job is to balance prudent caution with steady confidence, ensuring your team remains resilient rather than fearful in the face of uncertainty.
That casual chat with Fuad during our park walk left a lasting impression. While I might not have given it much thought at the time, his simple insight has become one of my guiding principles during periods of uncertainty. Repeating to myself that "life is a going concern" serves as a reminder to focus on the present and trust that, more often than not, things will work out.