Point of Stress (Kara Lilly)

Point of Stress

There is a very big difference between performing well in a relaxed atmosphere and performing well under pressure. When the stakes are low, and there is no pressure, success is easier. Almost anyone can win.

What matters is what transpires when the stakes are raised. When the game is on. We have all seen what happens to teams that cannot stand the heat – sorry Leafs fans! – they collapse under pressure. Individuals are the same. I have recently witnessed a number of individuals face personal challenges: some completely buckled under the pressure, some overcame them and thrived.

If you want to test how solid a bridge is, you need to measure it under stress. Most things in life work this way, whether it’s a road, a sports team, or a person’s integrity. Most things look solid until they are tested.

Companies are no different. In fact, the next time you research a company, don’t just look at their most recent annual reports. Go back and read their 2008/2009 report and look for the cracks in their business model, industry or leadership. What you find might be more telling than what you might read when the world is nice and rosy.

Kara Lilly

Copyright Ā© Mawer Investment Management

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