Business narcissism, says Scott Belsky in this Open Forum blog post, is "the tendency of all leaders and teams, across industries, to think that they are always encountering a special case."

For example, read the following paragraph and guess what it describes:

The forward-thinking CEO identified an underserved niche, created a new category of product for that market, and easily seized first-mover advantage. Within a few years, the startup venture dominated its market, earned government endorsement, and grew into a highly profitable regional corporation, thanks to savvy marketing and franchising. However, government price controls, a foreign war and consumer demand soon brought high volatility in the price of the product’s primary input commodity – ultimately pushing company leadership into bankruptcy and the once-successful enterprise into acquisition.

Is this a typical business fable from 2008? No. It takes place around 1908 and it describes the early years of the Pepsi-Cola Company. But the dynamic of a century ago should look familiar to finance executives by now. Volatility happens. The extraordinary becomes the ordinary. The assumptions that underpin your business could be overturned tomorrow.

I actually just pulled this scenario from a new SAS white paper, "Alternatives to Panic," which also gives these three explanations for why businesses are falling short:

1. They wallow in spreadsheets.
2. They forecast to budget.
3. They capture numbers but not the associated risk.

So, you may ask, what are smart businesses doing right? Read the paper or watch the Webcast to find out (registration required).