“I Didn’t Think About It, But It’s Fine” No Longer Works
News has been circulating about rakugo artist Kosanji Sanyutei, who stated, “Even in the age of compliance, I remain unflappable and follow my own path: ‘I didn’t think about it, but it’s fine'” (source: Oricon News).
Kosanji’s “I didn’t think about it” persona might be a form of professionalism. However, the era when “I didn’t think about it, but it’s fine” worked in the world of SME management is over.
Especially when a compliance violation is discovered, saying “I didn’t think about it” is fatal for a business owner. Because it essentially means, “I didn’t design for it.”
This article explains the concept of risk design for SMEs in the age of compliance using the “1 to 99 thinking method.” Let’s reframe this not as mere “defensive governance,” but as a design technique to accelerate your business.
Three Reasons Why “I Didn’t Think About It” Becomes a Risk
Reason 1: The Era Where “Outcome” Matters More Than “Intent” in Compliance Violations
In the past, saying “I didn’t know” or “I didn’t think about it” could be considered a mitigating factor. But now, regulators and business partners ask, “Why wasn’t that system in place?” – focusing on the presence or absence of design.
For example, in cases of subcontracting law violations or data breaches. The moment a business owner says, “I didn’t think about it,” their credibility is destroyed. “Not having thought about it” is itself seen as a lack of management capability.
Reason 2: Decisions Made Without Thought Expose the Entire Organization to Risk
A business owner’s “I didn’t think about it” mindset spreads throughout the organization. When instructions are given without clear decision-making criteria, employees act on “gut feelings” and make unilateral judgments in gray areas.
This leads to unintended legal violations or conflicts with business partners. The owner cannot simply say, “I didn’t know.” The organization as a whole is held accountable.
Reason 3: “Not Thinking” Creates Lost Opportunities for Growth
The “I didn’t think about it” state not only means failing to recognize risks but also missing chances for business expansion, such as overseas expansion or new ventures. If you view risk as a binary “0 or 100,” the only option left is “it’s scary, so we won’t do it.”
However, if you view risk as a continuous scale from “1 to 99” and design appropriately, many business opportunities become viable. “Not thinking” is essentially the same as giving up on challenges.
Governance Design for SMEs to Prevent “Not Thinking”
Step 1: Predefine “Decision Points”
The biggest reason business owners fall into the “I didn’t think about it” trap is missing the right timing to make a decision. A useful countermeasure is to predefine “decision points.”
For example, establish criteria like these:
– New client contracts: Legal review mandatory if the transaction value is over $6,500 (approx. 1 million JPY)
– Handling personal data: Always sign a non-disclosure agreement when outsourcing
– Employee discipline: Consult an external expert for actions not covered in the employment rules
By documenting these as “rules,” the business owner will never make decisions without thinking. When a decision point is reached, a “thinking” process is automatically triggered.
Step 2: Develop the Habit of Generating “Three Options”
The “I didn’t think about it” state arises from only considering one option. For example, if you only think in terms of a binary “accept or reject this project,” you’ll hit a mental dead end when both options carry significant risk.
Therefore, develop the habit of always generating “three options.”
– Option A: Accept (verify if it’s within the risk tolerance)
– Option B: Accept with conditions (include risk mitigation clauses in the contract)
– Option C: Put on hold and gather more information
By preparing multiple options, you prevent the “I didn’t think about it” state. Furthermore, the process of comparing the pros and cons of each option itself visualizes the risks.
Step 3: Design with “Room for Reconsideration”
Trying to create perfect governance from the start makes the design overly complex, leading back to the “I didn’t think about it” state. The key is to leave “room for reconsideration.”
For example, these designs are effective:
– Include a clause in auto-renewal contracts for an annual review opportunity.
– State in internal regulations that they will be “revised every three years,” mandating periodic reviews.
– Always record important decisions in meeting minutes to make them verifiable later.
Having “room for reconsideration” allows the business owner to move forward with confidence, thinking, “This is fine for now.” And if the situation changes, adjustments can be made. This flexibility is essential for SME governance.
From “I Didn’t Think About It” to “It’s Designed”
In the age of compliance, a business owner’s “I didn’t think about it” is no longer a free pass. Instead, it’s seen as evidence of a lack of management capability.
However, the important point is not to anticipate every single risk and create perfect rules. Rather, it’s about creating a “design” that predefines decision points, prepares multiple options, and leaves “room for reconsideration.”
Kosanji’s “I didn’t think about it, but it’s fine” is backed by years of experience and a solid artistic style. But SME management lacks that “backing.” That’s precisely why governance – a “design” – is necessary.
Is your company operating in a state of “not thinking”? Starting today, define your decision points and develop the habit of generating three options. That is the first step to surviving the age of compliance.
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