When I was in my 20s I worked for a merchant bank. The bank had an amazing office located on the 65th floor of an office tower overlooking Sydney Harbour. It was a great place for a young guy to work. I started as a Credit Analyst assessing business loan applications but soon enough was promoted to management level. This was the heady days of the mid/late 1980s and a revolving door of entrepreneurs, charlatans as well as some great businesses beat a path to our door for funding.

What I didn’t know at the time was that I was out of my depth.  I was (technically) smart enough but not nearly worldly enough for the role I was doing. I hadn’t yet developed the bullshit detector that nowadays I rely on so heavily. Basically, I mostly believed what people told me and made decisions based on an optimistic view of the circumstances presented. That all changed one day in late 1989.

It changed because of a large syndicated loan to build an office complex in downtown Melbourne. More than $250m of funding was required and our bank was proposing to provide $20m of it. To me the deal was a no-brainer – a good developer; strong leasing pre-commitments with the completion underwritten by a reputable finance company. I presented the deal to our credit committee expecting a rubber stamp approval. Instead I got shot down in flames.

One of the committee members was an experienced property guy (and ex-COO of one of the big 4 Australian banks) and he grilled me relentlessly about the credentials of the builder/developer, the state of the Melbourne office market and a myriad of other transaction risks that I had only paid cursory attention to. He kept asking me why I thought it was such a great deal – I’d reply as best as I could and then he’d explain to me what I had missed and why it was a actually a bad deal. In the end we didn’t lend the money and he was proved right when the deal tanked two years later.

After the meeting he pulled me aside and we had a long chat. He told me that if I wanted to succeed I had to prepare better; dig deeper to uncover the real risks; anticipate questions and objections in advance; and generally research more and speculate less. At one point he smiled and said – “Son, I’ve had a very long and successful career because I always aimed to be the best prepared guy in the room.”

This advice struck me like a thunderbolt and I never forgot it. Since that day 21 years ago it has been a bedrock principle for how I have operate. In times of uncertainty it has provided me with some protection from calamities occurring. It has reduced the number of “surprises” I encounter to a minimal level. Ultimately, it has stopped me speculating and providing opinions unless they are well-thought through. Needless to say I don’t use the words “I reckon” much anymore.

Being the best prepared guy in the room can provide you with a distinct competitive advantage that is difficult to beat. I thank my lucky stars that a grizzled old banker with decades of experience chose to share this advice with a young upstart like me. Thanks Stan – it worked better than I ever imagined! It is without doubt the single best piece of business advice I have ever received.

In addition, Al Pacino giving some inspiring advice in Any Given Sunday. The DONE Image via Google Images.