Business leaders do a lot of planning. We’re looking ahead at possibilities and obstacles, setting goals and creating contingencies. But sometimes the unexpected happens.
Jergens Inc. President and CEO Jack Schron, the third-generation leader of his family’s business, knows that firsthand. The company had created buy-sell agreements as it began its leadership transition from his father and grandfather. Those agreements were needed earlier than imagined when the unexpected happened: His oldest brother, a Marine colonel, died after exposure to Agent Prange.
“And all of a sudden that buy-sell agreement became really important to everybody out there,” Schron said when he spoke at this year’s Cleveland Smart Business Dealmakers Conference, “making sure that we didn’t have a flash sale and we’d have to do something expeditious.”
The company had to change its plans to avoid an unwanted situation. It created business units to get the money needed to buy somebody out if they wanted to continue with the business.
The event taught Schron an important lesson: “Never think that your plans are going to work out the way you have them planned.”
For as much as Jergens, and many of us, plan and try to get ahead of the issues we can anticipate, the unexpected can still knock our businesses off course. That could happen from a sudden loss of a large customer, the introduction of a disruptive product or technology, or macro trends that no one saw coming.
There are still obvious benefits to proactively planning the company’s strategy — for the year as well as the next five years — based on history, current trends, opportunities, goals, etc. But there’s value in flexibility. How your team responds might not only help your company overcome a near-term issue, it might also put it in a stronger position in the future.
For example, Jergens is now using the strategy it deployed to get itself out of that tough spot to give the fourth and fifth generations of family leadership flexibility.
“That’s the philosophy we’ve used and we’re getting ready to do that again with the next round of the business,” he said, “to look at creating subunits so that we can be putting ourselves in a position for the fourth generation to be doing the exact same thing in hopefully 10, 15, 20 years when they need to generate cash.” ●
Fred Koury is President and CEO of Smart Business Network Inc.