We’ve been thinking lately of a favorite scene from 1978’s Heaven Can Wait , a Warren Beatty remake of a 1943 film, Here Comes Mr. Jordan. The film’s premise is this: a quarterback, Joe Pendleton (Warren Beatty,) for the L.A. Rams dies, but it’s not his time. It’s a mistake. Mr. Jordan (James Mason), a nebulous Heaven official, swaps Joe into the body of a multi-multi-millionaire. All Joe wants to do is play football. He decides to buy the Rams. The next scene is the shot below, it’s the owner of the Rams with his attorney.
Lawyer: What’s wrong?
Owner: He got my team. The son of a bitch got my team.
Lawyer: What kind of pressure did he use, Milt?
Owner: Well, I asked for sixty-seven million –
Owner: And he said “okay.”
Lawyer: Ruthless bastard.
Just a great movie moment, especially for attorneys who advise businesses. It’s funny and it makes a point. You don’t always know when you’re going to get an offer for your company. You can have a lot of plans for a lot of contingencies (especially if you work with us) but you may not have a plan for when a ‘ruthless bastard’ walks through your doors and makes what may seem like an outrageous offer.
The very act of receiving the offer sets off a series of ever widening issues. There are considerations of considerations. Employees, contracts, assets, agreements, retirement plans, it goes on and on and on.
Then, there’s valuation. A great offer is stunning, exciting, fulfilling … and cause for some wonder. As in “Why so much?”
So, what about selling the Rams for $67 million in 1978? With inflation, that $67 million was the equivalent of $251.5 million today. Not bad. The Rams moved to St.Louis, were bad, got good, won a Superbowl, got bad again, got really bad, moved back to Los Angeles. Where they are simply awful. And, according to Forbes, currently valued at $2.9 billion. That’s billion with a ‘B’.
Not being ready to handle a sudden offer didn’t work out so well for the Rams’ movie owner.
Our own Dave Rinn has a debilitating, incurable addiction that he’d be glad to tell you about almost anytime but preferably over a beer. Or ten. Dave is a Washington Capitals fan. He lives and dies with the Caps. Which is a problem because the Caps are roughly the NHL equivalent of the Boston Red Sox before 2004. They come close to success, when they don’t win they do so in a manner guaranteed to rip the hearts out of their fans. No lose a series in four straight for them, they lose in seven, overtime is preferable.
Pittsburgh Penguins’ Sidney Crosby (87) takes a hit from Washington Capitals’ Matt Niskanen during the first period of Game 3 in an NHL Stanley Cup Eastern Conference semifinal hockey game against the Washington Capitals in Pittsburgh, Monday, May 1, 2017. (AP Photo/Gene J. Puskar)
Because of Dave’s obsession, we became aware of a situation that occurred just over a week ago, along with the (endless) media coverage and speculation around it, and knew immediately that the whole thing had a very real, very tangible relationship to what we do for and with our clients … every day.
It goes like this: There was a collision during the Washington Capitals – Pittsburgh Penguins Stanley Cup Playoff game. One above and beyond the usual hard playoff hit. It involved Pittsburgh’s all-world Sidney Crosby, a hockey stick, and Crosby’s much-concussed head.
A lot of people watched it live, it was available to everyone over the next few days in an endless loop on every sports and news show on TV and social media. It was viral. Crosby, one of the games fastest skaters (that’s important here) skated across the Caps’ crease, was bumped, started to fall; the Caps’ Matt Niskanen had him lined up for a hard (read: nasty but legal) chest-high check, couldn’t adjust in time, and ended up cross-checking Crosby across the top of his head.
Crosby, has a long, scary history of head injuries. He went down, seemed to be out. Cold. After a long five minutes or so, he wobbled off the ice. Niskanen was ejected from the game. The NHL reviewed the hit the next day and decided no further discipline was warranted. So, officially, it was a legal hit. A hockey play.
Meanwhile, fans and media of the team came to their own conclusions:
From the Pittsburgh media:
“The Caps resorted to one of hockey’s cheapest tricks, take out the opponent’s best player.
“While playing for the Penguins, Niskanen was a sneaky, borderline, dirty player who crossed the border.”
“A deliberate cross-check to the face.” (the Penguins’ coach).
From the Washington media:
“Wasn’t dirty, he was falling anyway.”
“A bang-bang play with the guy falling into him.”
“It was a hockey play.” (the Capitol’s coach).
All to be expected in the Information Age we live in. Also, indicative of something else altogether, something that we
find in life beyond the ice and playing fields; something we should always be aware of – particularly when it comes to running our businesses.
The discussion was straightforward – “people are both consciously and unconsciously biased as a result of being a fan, a team member, someone who would like to see the world the way they would prefer to see it … We sincerely believe that we saw what we think we saw.”
To put it in simple terms – the day after the hit Penguin fans hated the Caps, Caps fans, and The District of Columbia, more than they did before the game started. For their part, Caps fans were “incredulous at Pittsburgh’s reaction.” As in, ‘it was clearly a solid, hard, legal hit and Niskanen’s a great guy, why can’t Pittsburgh see that?”
“Anyway, Crosby may be a great player, but he’s dirty, and …”
Flip it all around and you have the Pittsburgh fan side. The article makes it clear that when it comes to fandom (put your business and business family here) there is a tendency to assign positive attributes to one’s ‘side’. You’ve seen this a million times, “Brady’s a great guy and would never cheat!’ “Brady’s an awful human being and a spoiled millionaire who would do anything to win.” That’s been out there for years… and, of course, no one taking either side has ever met Tom Brady, never mind talked to him.
We work with businesses very day. Many of them are family owned. All have similar issues, similar goals, needs, stories. All, of course, are dependent on the people who work there, in every capacity. People gravitate toward people who share their likes and dislikes and everything that goes with it. It is inevitable that different people in different generations, different levels, different everything, talk, share, commiserate with the people they relate to. Even if they don’t realize they do.
This very human thing, in and outside of businesses – now greatly facilitated by social media – creates completely different objectives and perceptions. Think of it this way, it’s like a Penguin fan complaining to other Penguin fans about Niskanen and his hit on Crosby. The narrative is reinforced. Only. Then entrenched. Objectivity is gone, if it ever existed. No Penguin fan is going to defend the hit.
A lack of objectivity and perspective is a fine when it comes to sports. Actually, it’s kind of fun. When it comes to business planning, lack of objectivity and perspective is almost always costly – financially and emotionally – and occasionally fatal to the business.
One of our most important duties to our clients is to break seal of ‘fandom’ and provide perspective and objectivity to move through the business planning process as expeditiously as possible.
HBO’s Silicon Valley is funny – sometimes hysterically so, smart – sometimes ingeniously so, profane, and, ultimately, really, really entertaining. It is also, sometimes spectacularly so, a primer on business planning.
For those who may not be following Silicon Valley (if you own a startup, it is a must see, start from episode 1 of season 1 … now), it’s a half-hour comedy centered around a tech startup operating out of a Silicon Valley ‘incubator’ that looks a lot like a ranch house in the suburbs. Because it is.
The company is called Pied Piper (to everyone but the founder’s derision), it has developed an algorithm that could revolutionize file compression – making video, chats, and a whole lot of other internet stuff a lot faster.
The product has great potential. The company needs money. Through the first seasons the show takes a meandering, crooked, ultimately accurate path as Pied Piper deals with venture capitalists, non-disclosure agreements, trademarks, intellectual property, employment contracts, non-compete clauses, investment agreements, proxy fights, board of director formation/dissolution/reforming, succession issues, conflicting duties among officers, offer sheets, lawsuits … the show has them all, and a lot more.
Silicon Valley gets almost everything right. It’s been written about and talked ever since it first aired in 2014. It has been universally hailed as a dead-on look at start-ups and business in the 2010s.
When we started this post about a week ago, when HBO launched the new season of Silicon Valley, we had every intention of centering this post around a few of the many great real-life business scenarios the show has covered so far. Then, of course, tie it into what we see every day.
There was a lot there, and we’re reasonably sure it would have made a good post, but then a funny thing happened. We ran across an article from The New Yorker. It was about how Silicon Valley is written and filmed. The detail and planning involved in every episode – and each season – are simply mind-boggling.
The show has two hundred advisers and consultants, most of them volunteers. They include “academics, investors, entrepreneurs, and employees at Google, Amazon, Netflix, and other tech firms.” Everything that ends up on the TV screen has been vetted a dozen times.
How in-depth do they get? “If someone is holding a document on the show, that document is written out, in full, the way it would be in real life.” Post-it notes, lines of code, whiteboards, all have real formulas on them. The producers are convinced that the more work they do to make things real, the more “the process leads” them to better ideas, better shows.
In-depth planning, active, welcome involvement of outsider advisers and consultants, HBO’s Silicon Valley is doing what every company should be doing in the real world. Every company, that is, except for Pied Piper, if they ever used someone like us, the show would way too boring for TV.
You probably saw the Anheuser-Busch ad during the Super Bowl. You know the one, it went somewhat viral after the game because a lot of people saw it as some kind of comment on immigration.
Regardless of one’s political leanings, it was an effective ad – two immigrants meeting in St. Louis around the time of the Civil War and launching Budweiser. Coors, of course, has a parallel story, almost at exactly the same time Anheuser and Busch met, Adolph Coors was getting his brewery up and running just a little way to the west.
The rest, as they say, is history, by the 1980’s Anheuser-Busch and Coors were the first and fourth largest breweries in the United States. In third place was Stroh’s. Stroh’s . . . you can be forgiven for never having heard of them, never mind ever sipping one.
Yet, in the early 1980’s Stroh’s was a household – well, at least a beer-drinker-in-the-mid-west household – name. Even if you never had a Stroh’s you had heard of them. Like Coors and Budweiser, Stroh’s was founded by an immigrant in the mid-1850s. Like the Coors, Anheusers, and Buschs, Stroh’s started as a family business. Like the Coors, Anheusers, and Buschs, the Stroh’s passed the business down for four generations.
Unlike the Coors, Anheusers, and Buschs, the Stroh’s didn’t survive and thrive into the 1990s. Neither did the Stroh’s family fortune, at one time one of the largest family fortunes in the United States.
It’s not often that real life allows a direct comparison of companies over a century like a business school problem, but that’s the Coors, Anheuser-Busch, Stroh’s scenario. Family businesses that made it – while surviving Prohibition, no less – from the Civil War through to the Reagan years.
Then, in the space of ten years or so, there were two.
As you can probably guess, there is no one reason for Stroh’s demise, there are many. But they all revolve around one theme, bad planning.
Not bad decisions, bad decisions can be rectified, overcome within a good plan. It seems that Stroh’s never really had a plan for the future until the future was on top of them. Which, of course, is too late.
Stroh’s made beer in Detroit. They marketed mostly to the Mid-West. They, obviously, had a great, loyal following. They had decided generations earlier that only the men of the family would run it, no women, no outsiders. They had decided generations earlier that every family member would get dividends for life … regardless. An easy thing to support through a generation or so, but by 1980 Stroh’s dividends were paying for the lavish lifestyles of some twenty-seven family members, only a few of whom were working in the business.
It’s easy to imagine the business being run like a large, benevolent fiefdom. Stroh’s had an entrenched market, but made the mistake of becoming entrenched as a company. After one hundred and twenty years of success doing it the ‘family way’ no one running the company apparently saw change coming, certainly never thought to plan ahead.
So, when change did come, it – as change has a way of doing – came fast and Stroh’s wasn’t ready. What happened to start it off is what happens to all successful companies across the spectrum of industries, a competitor began to push. In Stroh’s case it was their fellow-immigrant founded in the mid-1800’s company, Coors.
Coors was spreading eastward. By the late ’80s their sales were poised to surpass Stroh’s. Stroh’s management wasn’t ready. They seem to have panicked. In a short period of time they tried a series of increasingly ill-advised, knee-jerk-like reactions. None worked, just piled debt into the equation. By the time Stroh’s had to fire-sale their assets, including the Stroh’s brand, they had even tried to diversify into bio-tech.
It all gets us thinking – the only companies that need planning more than start-ups are established, successful ones.
Back when it seemed that no one would ever beat him, back when he was on the cover of countless magazines, Mike Tyson was asked about an upcoming fight and his opponent’s plans to beat the unbeatable fighter. Tyson replied, “Everyone has a plan until they get punched in the mouth.”
Great line, it made headlines, he won again. Tyson was actually quoting the great Joe Louis, Louis said “Everyone has a plan until they get hit.” That quote had lain dormant for decades until Tyson resurrected it.
In either version, nowadays the quote is extensively employed. It seems as if its used mainly to illustrate (if not champion) the idea that audacity and force either stuns or disables planning. It’s a kind of bravado.
I was reminded of this quote – in a very roundabout way – by a passage in Ronald White’s new biography of Ulysses S. Grant. It’s about Grant’s first experience with the Army of the Potomac after he was installed as the Commander-in-Chief of all the Union Armies in 1864.
Grant chose to go into the field with the Army of the Potomac rather than sit in Washington and ‘manage’ the war from there. In joining the Army of the Potomac he was joining an army that was, at best, dysfunctional. An army that had been soundly beaten in almost every battle it had ever fought against Robert E. Lee and the Army of Northern Virginia except Gettysburg. And, that was close. Very close.
The Army of the Potomac, then, wasn’t Grant’s army, he was, in essence, the new Chairman of the Board, management stayed the same. He did, however, order the offensive in May, 1864 that resulted in the Battle of the Wilderness.
The Army of the Potomac attacked on May 5th and suffered a severe setback. All the while, Grant, stoic, sat and observed George Meade and his generals as they conducted the battle. He received updates but otherwise kept to himself and watched, listened.
That night, when it was crystal clear that the day had been horrific for the Union forces, several officers took it upon themselves to tell Grant about the horrible things Robert E. Lee was probably out there in the dark getting ready to do the the Northerners. Dire warnings of flank attacks and utter destruction.
Grant was famous for being implacable. That implacability snapped after about ten minutes of ‘Lee-will-do-this-to-us’ warnings.
He exploded, “I’m damned tired of hearing what Lee is going to do to us … it is about time we start talking about what we are going to do to him.” The battle resumed the next morning, the North fought to a draw, moved south the next day and began the offensive that eventually ended the war.
Then, there was the Superbowl Sunday night. You may have heard that the New England Patriots were down 28-3 in the third quarter then scored thirty-one straight points to win it in overtime. It was the greatest comeback (by far) in Super Bowl history and fifth greatest in the history of the NFL – for any game.
There’s been a lot of writing about how and why this happened. As the 3rd quarter ended the Patriots had a .04% chance of winning. Yet they did. The best explanation I’ve read on why this happened was in FiveThirtyEight. They simply stated that in the second half the ‘Patriots went back to being the Patriots and the Falcons went back to being the Falcons.’ What they meant was that the Patriots played the first half as a shadow of their usual selves while the Falcons played out of their minds good – virtually perfect.
They went on to cite the fact that despite getting blown out the Patriots approached the second half like they always approached a second half. They made some changes to counteract what the Falcons were doing, then they executed their game plan as if the score was 0-0. The rest is history.
So, here’s what hit me with all this – the important thing, the really important thing in life and business and sports and everything else – is to have a plan for what to do after you get punched in the mouth.
That’s the thing. Grant was a great planner. Bill Belichick is . . . well, Bill Belichick. With them, it’s all about contingencies for contingencies. Their planning included contingencies for getting hit. Hard.
Good planning, then, plans for getting smashed in the mouth. And for what to do while it still hurts.
We posted a quick piece about the World Chess Championship now being played in New York City. The website FiveThiryEight has a running commentary on the matches, we shared one of them with a note about chess and planning … you know the deal, it’s a metaphor made fairly often.
But, upon some deeper reflection, it’s not really a perfect metaphor. It’s easy one to use (too easy?) – you know, ‘business planning is like chess, every time you move the board changes and you have to re-plan and re-think, move again and then go through it all over again until at last …. That part, ‘at last’ is the problem, I think. Because, no matter how you look at it, people play chess to win.
This simple yet vitally important fact is too often overlooked.
Chess is a great intellectual exercise but the minute two people are sitting across from one another make no mistake, it’s about winning. The two men playing by the South Street Seaport in Manhattan, Magnus Carlsen of Norway, the defending world champion and Sergey Karjakin of Russia, currently the seventh ranked player in the world, are certainly only thinking of winning.
Any thoughts you might have that chess isn’t every bit as competitive as football or hockey or … anything, will be instantly dispelled watching last year’s Pawn Sacrifice, the story of the Bobby Fisher – Boris Spassky chess championship in the early ’70s. Toby McGuire did an amazing job portraying Fisher and his mental deterioration. The movie takes the position, clearly, that the stresses of high-level chess played a big part in that deterioration. Winning is everything.
I’m struck by this – it’s from the film but it’s also directly from Fisher’s life: In an interview with a magazine, Fischer’s coach explains to an uninitiated reporter, “after the first four moves of any chess game there are 300 billion possible move combinations.”
Sure, that’s a staggering amount of combinations and, on a lesser scale, it does conjure images of working through a a business plan. Or sale. Or purchase. It’s Fischer’s response to his coach’s assertion that blows the metaphor apart: “People think there are all these options, but there is only one right move.”
“Only one right move.” It’s true for chess. A million, million possible combinations after every move, but only one right one if you want to win. Need to win.
That’s not remotely true with business planning – in any of it’s variations. There are many right moves, it’s just that the order of them can sometimes be vital. It’s never about winning – even business sales and purchases- it’s about doing it right and continuing to be successful. Chess players have to win to be successful, business owners just have to plan, be smart, and think ahead – like a great chess player.
On December 16, 1944 the German Army turned suddenly turned and attacked the American and British forces that had been chasing it through Luxembourg and Belgium. It was the beginning of the Battle of the Bulge. Despite the fact that the Allies had long since broken the German codes, the attack came as almost a complete surprise. Under heavy cloud cover and taking advantage of some really bad weather – and therefore negating the superior air cover of the Allies – the Germans rolled.
It’s hard to visualize this, today, when we know how it all turned out, but on December 19, 1944 the German Army was still formidable, large chunks of allied forces had been destroyed, cut off, surrounded. Since almost everyone fighting in Western Europe at the time thought the war would be over by Christmas, the attack was as stunning as it was unexpected.
So, when General Eisenhower, the Supreme Commander of all Allied Forces, held an emergency meeting of his field commanders on December 19th, it was serious. So serious, Eisenhower began the meeting by telling his generals to try and think of it as an opportunity, he wasn’t interested in panic. He was looking for ideas in the face of entire divisions reeling.
He didn’t get an idea from Patton, he got a plan. Patton would disengage from the German divisions in front of his Third Army and swing north to attack the Germans in the flank and relieve the cut-up and cut-off American Divisions. And, he would do it immediately. As soon as the meeting was over.
Ike and the other generals were incredulous, Ike went as far as to warn Patton to stop being ‘fatuous.’ Patton, though, was deadly serious. Patton was the kind of general who planned for … well, almost anything, even if the odds of something occurring were very low. Perhaps his greatest fear was to be caught unprepared.
Patton was a very serious student of military history, He knew that the German army had not taken the offensive since Frederick the Great. Yet, he had his staff plan for one nevertheless. Just in case.
Which brings us to Villanova’s NCAA National Championship game against North Carolina last April. If you watch the last few seconds you’ll note the following: UNC’s Marcus Paige drained a ridiculous double-pump game tying three pointer with 4.7 seconds left. Timeout, the Villanova players went to their bench – all except ‘Nova’s 6’11” center Daniel Ochefu. He was busy mopping a wet spot just below the half-court line. It was a curious sight, a seven-footer busy with a mop while the rest of his team huddled.
The announcers joked about it, wondering aloud while 35 million people listened why he was working a mop in a tied game with 4.7 seconds left for the National Championship.
The answer was simple: he was making sure the spot was dry because he knew it was the spot where he was going to set the pick that would spring Ryan Arcidiacono to drive over half-court and set up the shot to win it. He was making sure neither of them slipped.
How did he know to do that? Simple. Villanova had practiced the game winning play – called Nova – hundreds and hundreds of times. They had planned for this precise moment for years, 4.7 seconds left was almost the optimum time for it.
There was no discussion in the huddle, no frantic whiteboard X’s and O’s and arrows. The Wildcat’s coach, Jay Wright, said “Run Nova,” Ochefu went over to the sweat slick and did the only preparation the team needed.
Arcidiacono had several options as he dribbled, all planned back in 2002. He had made that run with 5 seconds on the clock hundreds of times in practice. Every kid on the floor with him had been through it and all its variations time after time – always at the end of practice when everyone was tired and wanted to go home – just like the end of a draining game.
In the fourteen years Jay Wright has coached Villanova, they never had the opportunity to run the play in a game. It would have been easy to self it. But they didn’t and it just so happened that the first time they needed it it was there to win the National Championship.
That’s the thing about planning – great planning plans for contingencies that may never happen. Because, they do. Sometimes.
Imagine that there’s a business that started in the early ’60’s, out of a garage in the Mojave Desert close by Edwards Air Force base. The founder was strangely charismatic, not something you could really out a finger on, but indisputably charismatic. He dove into his craft with a singular passion. Whip smart, cutting edge, daring, yet with a business sense that bordered on the surreal.
From the mid-’60’s through the beginning of the ’90’s he constantly adapted, changed his product(s) as times and tastes changed. Enormously influential on countless others in his field, he was also the face of his industry, even appearing before Congress when regulation threatened it.
While he had dozens – if not hundreds – of partners in various ventures over the years he always retained control of his company/products. Along the line he married, raised four children, two of whom followed him into the business. He was diagnosed with prostate cancer somewhere around 1992, with his usual laser-intensity he designed his estate so that the business would thrive for generations.
He died in 1993. He left his wife as the new CEO, the children all had management roles, the two who had followed their father into the industry directly continued on with his work. It was perfect. Until his wife died. No provisions had ever been made for a successor to the wife as, effectively, the CEO. In reality, she was probably as much referee as chief executive (although we know many CEOs who would claim the same) and without her things fell apart.
Because the ‘shares’ hadn’t been exactly equally distributed to start with, two of the kids manged to get, barely, control over the company. They do not get along with the other two – the two still working in their fathers medium. There is no consensus and the odds don’t look as if there ever will be. Parts of the company are breaking up, being sold off piecemeal; the two children on the outside have been estopped from using their father’s name in their business – the name is its selling point. There is a major sale of assets scheduled for November, litigation is threatened and seems a certainty.
The father, the business, is Frank Zappa, one of the most influential musicians of the 20th Century. And businessman. (we’ve pointed out more than once in past posts that artists certainly own businesses). He learned early that he should own his own songs, then he learned that he should own his own record labels. He executed that as well as any entrepreneur.
He structured his companies and his succession planning admirably, except for one thing. It’s the one thing that many, many owners of family owned businesses also fail to do – account for emotions. Simply, everything that can make a Thanksgiving miserable can mess up a family owned business.
It’s a contingency that has to first be acknowledged, then planned for regardless on how far-fetched it may seem. When it’s not, well, it’s pretty hard for a family owned business of any size to survive long.
Jake with the Orioles
Since about mid-way through the 2014 baseball season, one of the best pitchers in baseball has been – and continues to be every fifth day – Jake Arrieta of the Chicago Cubs. He was the National League’s Cy Young award winner last year after an historic season in which he put up numbers not seen since Bob Gibson in 1968.
It shouldn’t be all that surprising, Arrieta was a top draft pick out of TCU in 2007. He was drafted by the Baltimore Orioles and quickly rose through the minor leagues. He made the big club in June 2010 and won his first start – against the Yankees.
He was known for great ‘stuff’, ‘filthy’ in baseball parlance, four pitches, and a very idiosyncratic windup. He had everything needed – including an almost fanatic work ethic – to be an ace. But he wasn’t, that start against the Yankees was pretty much the highlight of his first seasons in the majors.
Arrieta crashed and he crashed hard. How hard? He set the record for the worst ERA ever recorded by a starting pitcher for the Orioles. The Orioles’ history, by the way, goes back to 1901. This despite the fact that dozens of well-known players – including a few future Hall of Famers – said that Arietta had the best stuff they had seen in years.
So, what happened? It’s really relatively simple. Arrieta’s throwing motion and pitch selection didn’t fit the Orioles
Oct 7, 2015; Pittsburgh, PA, USA; Chicago Cubs starting pitcher Jake Arrieta (49) reacts coming off of the field after pitching a complete game shutout against the Pittsburgh Pirates in the National League Wild Card playoff baseball game at PNC Park. The Cubs won 4-0. Mandatory Credit: Charles LeClaire-USA TODAY Sports
pitching ‘metrics’. He threw across his body, he threw from the first base side of the pitching rubber, he kept his hands low, he loved his cutter (almost unhittable). The Orioles organization wanted their pitchers to throw a certain way, Arrieta, according to their pitcher standards, did everything wrong. And, they forbid all their pitchers to use the cutter.
They broke Arrieta’s pitching down and rebuilt him to fit their notions of what made an effective major league pitcher. Along the way, unsurprisingly, they lost the Arrieta they had drafted. The results were a disaster, he was demoted to the minors, he came within a whisker of quitting baseball forever.
Then, he was traded to the Cubs. In his first meeting with Cub management, he was told to do what came natural to him – to be himself. They, in essence, would plan around him.
The results were virtually instantaneous – his first full season with the Cubs he finished 9th in the National League Cy Young Award voting, his second year he won it, this year he’s still off the chart good.
By now, you can probably see where this is headed – call it ‘pigeonholing’ or ‘cookie-cutter’ or generic or a dozen other things, but trying to wedge people or businesses into preconceived, pre-planned, slots is at best counter-productive, at worst disastrous.
Jake Arrieta is a business worth millions, it just happens to revolve around his ability to pitch a baseball. Cookie cutter planning almost destroyed his business.
Imagine this scenario: there’s a new startup in a very competitive field. It’s off to a shaky debut but has real promise. The CEO is tall, aristocratic, smart, taciturn – the perfect qualities, he is indispensable. Above him is a board of directors that is divisive in the best of times. They spend most of the time arguing among themselves, in the two years the company has been in existence only two directors have bothered to visit the physical plant.
Below the CEO are two highly capable, much needed for completely different reasons, officers. They have the same title, diametrically opposed personalities, and are untied only in the written-in-stone belief they are both more qualified than the CEO and the CEO needs to go. The CEO suspects this, but has no proof, even if he decided to act on his hunch and save himself much grief down the road, he can’t fire either of them without board approval.
Just below the two bickering officers is an upper management type who’s brilliant, improvisational, but high strung. He is devoted to the CEO.
With the company on the verge of bankruptcy the manager pulls off a miraculous product launch that succeeds far beyond all expectations. It is one of the greatest success stories in history. The company rejoices, the markets respond accordingly.
But, there’s a problem. One of the officers takes all the credit, doesn’t even mention the manager in his emails or press releases. The manager, as anyone who ever met him in any capacity would guess, takes it poorly and snaps – he issues his own emails and press releases and appeals directly to the CEO for relief.
The officer that took the credit is a political animal, he immediately goes to the board over the head of the CEO and moves to have the manager fired – for cause. The board runs with it, the CEO is buried in day to day operations and, regardless, shuns politics, so he leaves it to them to work it out.
The manager gets wind of the complaint to the directors, that’s soon followed up by notice of a hearing in some indeterminable ‘near future.’ Meanwhile, six other managers are promoted over him.
This is a good place to note the following: this startup spun off from a long established company that had settled into the doldrums. The spin-off happened in a flash, virtually overnight, what few documents the founders drew up before launching were knock offs from the original company. No one had had the time – or inclination – to do more than hastily incorporate. Operating agreements, much less employment agreements and guidelines, do not competes and non-disclosures were never enacted.
With the hearing continuously postponed and daily leaks to the media about the manager’s ‘malfeasances’, the manager breaks – he’s had it – but he doesn’t resign, he becomes uncharacteristically quiet.
He arranges to sell one of the company’s most sensitive properties to the competition – the original parent company. It will ruin the start-up, virtually insure its demise. At that point, the best it could hope for would to be bought out by the jilted parent, though heads would roll.
The manager is stopped only by sheer, good luck moments before the handoff. By the end of it all, the manager is
The Board of Directors
hired by the parent company; the two officers subsequently disgrace themselves – one is fired, the other allowed to retire; the company gets its act together and gets to all the documents and agreements it should have had from day one, several lawyers pitch in to plan it all out; the CEO becomes chairman of board.
Without even looking at the images, you probably knew early on that the start-up is the United States circa the Fall of 1777. The CEO is, of course, George Washington; the board is the Continental Congress; the officers: Horatio Gates & Charles Lee; the manager Benedict Arnold; the miraculous occurrence – Saratoga. By the way, one of the two members of Congress to ever travel to the ‘front’ was also the oldest member, Benjamin Franklin.
It just goes to show that there’s nothing really new – the United States went into business virtually overnight – few could have anticipated the Battle of Lexington and Concord; no one could have foreseen the carnage of Bunker Hill (really, Breed’s Hill but …) cementing the deal.
The United States was a vast undertaking and it was done on the fly and under intense pressure – the kind you can only get ticking off the most powerful nation on the planet.
In other words, it was hardly planned and in its early days that lack of planning was almost fatal. Several times.
In the long run – except for the citizens of New London, Connecticut, the British Brigadier General Arnold burned it to the ground in 1781 – the lack of planning and the Arnold affair did not have any real long term effects.
But it could have – Arnold warned General Cornwallis not to base his army out of Yorktown, he was, thankfully, ignored.
History – a lot of lessons for a lot of businesses.