Many of my friends have for years sent holiday season “annual reports”, beautifully written family adventure tales punctuated with photos of travel-poster vacations; healthy, smiling children or grandchildren; and tolerant dogs, if any. Many also post enthusiastically on Facebook or Instagram.

I’m almost always surprised when they divorce.

After the most recent sad news, I wrote back.

“Yes,” she responded, “all of my newsletters and Facebook posts made it all sound so perfect…”

I’m almost always surprised… and I was reminded of Tolstoy’s beginning to Anna Karenina: “Happy families are all alike; every unhappy family is unhappy in its own way.”

At a desk far away, long ago, I designed a commercial banking credit training program. One of my subject matter experts, a senior loan workout specialist, shared the story of a high flying equipment leasing company whose business included leasing computers and rail cars and, with the proceeds, purchasing expansive oriental rugs and Perrier water coolers for the company’s San Francisco Bay-viewing headquarters.

They got into serious trouble when IBM announced a new computer series and their hardware leasing business froze while people waited to see what IBM would do. Cash flow crashed. Efforts to persuade the company’s 6,000 creditors, led by 100 major banks and institutions, to refinance the enormous debt failed. They declared bankruptcy the following year. Many creditors lost bundles on their loans.

“But, we got out before all of that, ” my wizard said, gloating. “Didn’t lose a dime.”

“How’d you do that?”, I asked, incredulous. “I’ve been through their annual reports. Everything looked fine.”

“Nick…..”, he said, “Nick… annual reports are sales documents designed to attract investors. We are a lender. We put on our boots and walked through a dozen rail yards to look at the specific freight cars included in our agreements with the company. My team came back and said, ‘The rail cars are rusty, many sitting for months. The leases aren’t any good.’ So, we got out.”

He laughed and slid the company’s pre-bankruptcy annual report across the table toward me.

“They’re selling you stories, Nick. Everything looks rosy… until it doesn’t. You can’t understand what’s happening unless you go out and look…. and think about what you’re seeing… what could it mean?”

Ah, they make it all sound so perfect. And every unhappy company is unhappy in its own way.

Nick Miller is President of Clarity Advantage based in Concord, MA. He assists banks and credit unions to generate more and more profitable relationships, faster, with business clients, their owners, and their employees through better sales strategies and execution. Additional articles on Clarity’s web site.