Flopsy, my white, lope-eared rabbit, usually growls, stomps or bites at me when I get near his cage. But when furry white Samantha passes by, you can almost see Flopsy smile.
It was love at first sight, at least for Flopsy, so it didn’t surprise me that the rabbit took off in search of Sam the day I let him roam free in my house. Like a good entrepreneur, Flopsy set his goal, his vision, and set out on that long journey to capture it. His wily persistence led him from room to room, searching under tables, beneath the couch and upstairs to the master’s bedroom, where Sam is known to hide under the bed. And there she was.
I watched Sam dart from room to room, followed closely by Flopsy, who simply wanted to do as rabbits do. When Sam changed directions and darted the other way, Flopsy changed as well. And Flopsy used his strong back legs to overcome any obstacle, from footstools and kids’ toys to the couch and even my curious Rottweiler.
Flopsy did everything right in his pursuit, and his diligence was about to pay off. Sam, tired of running, stopped long enough for Flopsy to catch up. Flopsy, of course, took this as a sign and tried to do as rabbits do.
Sam hissed and fur flew. As Sam dashed away, poor Flopsy just sat there with his now-scratched eye and dampened ego, wondering what had happened. While Flopsy thought he was doing everything right, he didn’t consider one minor detail in his epic pursuit: Sam is a cat.
The top managers of F.B. Wright Co., this month’s cover subject, thought they were doing everything right, too. They knew they needed a good succession plan as the majority owner got older. In their pursuit, they hammered out a plan that would give more stock to several top managers over time, and they took out insurance policies to purchase the company in the event of the owner’s untimely death.
Then the owner died suddenly.
Tragic though it was, the new president and top executives thought they were prepared. The buy-sell agreement kicked in, the insurance came through, and they figured life would go on at the company as expected. But they didn’t consider a few minor details in their pursuit: cash flow and people.
Unfortunately, life never goes on unchanged with a change in ownership, whether caused by death, sale or other factors. The new owners hoped that wouldn’t be the case, but it was. They spent all of their insurance and other money on the purchase of the company but left little reserve funding to operate it. At a time when cash flow was already tight, that became a painful oversight that has taken the firm several years to overcome.
Then there were the people. The owners thought their top people would stand firmly behind them through and after the sad transition. Several top sales representatives didn’t, though. The proverbial fur flew, and the new owners were left sitting there, bruised and dumfounded.
The moral of this story: Specifically, make sure you’ve covered all potential concerns when arranging for your company’s succession. More generally, always be prepared, which means ongoing strategic planning — an exercise that forces you to look beyond your next horizon as you move forward.
Perhaps if Flopsy the lope-eared rabbit had done his homework and truly planned strategically, he may have realized he was diligently chasing the wrong dream. Doing all of the right things didn’t change the fact that Sam is a cat.
And the cost? A miserable rabbit with a damaged eye and twisted dreams … and a $68 vet bill.
Daniel Bates ([email protected]) is editor of SBN magazine.
