Hold ’em, fold ’em or change ’em Featured

8:00pm EDT June 25, 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.