Do You Have a Plan B?
In business, sometimes the shortest distance between two points is not always a straight line.
Successful CEOs and top managers understand that their best laid plans don't always pan out as expected. However, these leaders are generally ready with
a 'Plan B'--just like a quarterback calling an 'audible' at the line of scrimmage. When the ball is centered, the team knows the backup plan and
executes it as if it were the original play.
Whether bumps in the road occur as a result of business or competitive conditions, ownership or board demands, employee issues, funding or cash
flow needs, significant unforeseen circumstances, sudden reductions in sales or other reasons, management should always have a 'fail safe' in place.
Knowing where and when to take an intelligent detour should be a key component of the firm's DNA.
Successful strategic plans are those that involve employees, owners, boards, customers and others. The best plans are written with fact-based,
real-time market and competitive information and are not prepared simply as an internal 'book' exercise. This entails setting and agreeing on long-term
Vision and Mission Statements for the company, establishing top-level goals, developing comprehensive SWOT (Strengths, Weaknesses, Opportunities
and Threats) analyses and assessing the current and future competitive landscape.
A key end product of the plan should be the creation of appropriate business strategies to accomplish the firm's desired market, organizational and business goals, including a
contingency plan (Plan B).
When preparing Plan B:
- Start by exhaustively listing the pot holes the company could face while executing its plans. If possible, describe scenarios for each, with various 'what if' alternatives shown.
- Assign a probability of occurrence, financial and timing implications for each.
- Then, pare the list to a manageable number of items, force ranked based on business risk.
- Determine the 'triggers' for actually implementing Plan B (i.e. if sales drop to a specified level, certain key initiatives are delayed, etc.).
- Establish a specific detour route for each contingency item.
- Identify what steps will be needed to mitigate their impact, including organizational planning, resource reallocation, critical timelines, etc.
Creating and executing Plan B is not an academic exercise, nor should it be done on the fly. In the spirit of "In Case of Fire, Break Glass," the CEO
and management team should develop (and have approved) a Plan B before it's actually needed. The actual implementation of Plan B (if necessary) will be
greatly assisted by this pre-planning process and will allow the company to make the best decisions going forward.