Hold ’em, fold ’em or change ’em
Start with Plan A, but always have Plan B in your pocket.
By Michael Feuer
July 2007
Most things start with a plan. In “The
Gambler,” Kenny Rogers sang,
“Know when to hold ’em, know when to fold ’em, know when to walk away,
and know when to run” which is practical
advice applicable to business and, specifically, to planning. Introducing a new product or
service or starting a company, takes a huge
amount of thought and copious compilation
of facts, figures, strategy and tactics.
Other plans, such as making it through a bad
day, may simply require keeping your head
down, your mouth shut and minding your
own troubles rather than playing the under-appreciated and unwanted white knight bent
on solving other people’s problems.
The “if” in any plan is, will it ultimately produce the desired results? Experience can be
a bitter teacher, but anyone who has devised
a plan from scratch knows that an initial plan
doesn’t always play out as expected.
That is not a big deal and, in fact, can be a positive, as it requires the initiator to refine, tweak
and nurture the plan until all the viable elements fall into place. A good plan should really be designed as a work in progress so that
it can build, change and take on different
shapes and directions as it matures.
Some of the best plans mushroom into
something completely different from the
initial objective. As the plan is vetted, many
times a new and improved concept emerges.
On the flip side, corporate America is littered
with plans that started with lofty objectives but
during the embryonic stages became cast in
concrete as the creators and implementers fell
in love with their idea and were unwilling to
deviate from their plan. Instead of succeeding, they failed because they lacked the creativity to recognize alternatives.
So how do you know when to hang tough
and when to take a different direction? That
depends on circumstances and on what you
discover along the way. For example, if you
are negotiating an employment agreement
and the prospective employee wants a higher salary than you can afford to pay, it is time
to go to Plan B.
Instead of additional monthly compensation,
you could come up with a bonus plan based on
reaching specified goals that are higher than
you would have originally required. Instead of
telling the candidate to take a hike, you offer
a more creative solution via Plan B,
which provides for a bonus on top of a
bonus if specific incremental objectives are reached. The beauty of this is that it probably won’t cost you any more because the
results will more than make up the difference
of what you needed to make the deal work.
Another example would be in the purchase
of high-priced equipment. If the seller balks
at the price you offer to pay, you could come
back with a creative solution that provides
incentive payments after a specified time if
the equipment produces better results than
the predetermined targets.
This concept of integrating Plan A and Plan B
into every major undertaking is limited only by
your imagination. The key is that you can still
get what you want at the price you want to pay,
while giving the other side something in return.
If you had read the business plan created in
1988 for my company, complete with the obligatory long-term goals and objectives, and compared that with where we landed a few years
later, the only commonality was that we were
still in the retail business. The original plan
called for 100 OfficeMax stores primarily in the
Midwest, and instead, we grew to 1,000 stores
on three continents.
What we expect to take place rarely happens
exactly as anticipated. Our saving grace was
that even though we always had Plan A, we
used it primarily as a guide rather than making
it sacrosanct. More often than not, we used
Plan B or C or D when it became clear that
there was simply a better way to do whatever
needed to be done.
Like most start-ups, we never had enough
money, time or resources. We quickly realized
that the secret to winning was to be focused
but also very flexible. Our battle cry was “carpe
diem” seize the day.
Clear winners in business today are those
who have both a Plan A and a Plan B in their
arsenal and can move from mind to market
faster than their competition. Business is a
marathon, not a sprint.
However, if you fall into bad habits and follow the ruinous practice of wearing blinders,
you’ll spend most of your time planning how to
make it through the day and keeping one step
ahead of failure, leaving your company mired in
mediocrity and always playing catch-up.
MICHAEL FEUER is co-founder of OfficeMax, which he started in 1988
with one store and $20,000 of his own money, along with a then-partner and
group of private investors. During 16 years as CEO, he grew the company to
almost 1,000 stores with sales approximating $5 billion before selling it for
almost $1.5 billion in 2003 to Boise Cascade Corp. In 2004, Feuer launched
another start-up, Max-Ventures, a venture capital operating firm that focuses
on buying control and/or making substantial investments in retail-oriented
businesses and businesses that serve retail. Reach Feuer with comments at
mfeuer@max-ventures.com.
