Strategic Planning, I’m talking to you now.
Popular strategic planning advice says you should decide where you want to be in 10 years and
The key to Contingency planning is a method I call Deliberate Planning. It was inspired by the Method Adaptive Planning, coined by Author and creator of LinkedIn, Reid Hoffman in his book “the startup of you;” also known as ABZ planning. In the Book Hoffman wirtes:
“- An adaptive approach to planning that promotes trial and error.
- Plan A: What you’re doing now. Your current implementation of your competitive advantage which you constantly iterate on.
- Plan B: What you pivot to when plan A isn’t working or when you discover a better way toward your goal. Don’t write an elaborate plan B, but consider your parameters for pivoting.
- Plan Z: What you shift to when something goes seriously wrong. The lifeboat you can jump into if your plan fails.”
Deliberate Planning is similar but more suitable for a hard charging small business and rooted in project management principles.
A business owner needs a general primary Adaptive Plan, Their Plan A. Underneath it is the equally important but more elaborate back up plan, Plan B. Plan B should be just as strong as plan A because it is merely another avenue or another revenue stream.
Beneath A and B is the contingency plan or Plan C which is your safety net/fall back.
Plan A is a loose and adaptive diagram, a non-specific direction moving toward a niche or target customer. This is key. If you try to solve everyone’s problem you will fail, if you try to write a book everyone will read no one will. Think problem and solution; what is the market needing and how can you solve it by focusing on your competitive advantage. Create a competitive advantage by analyzing opponents. If your competitor is affordable, go with luxury. If they are complicated go with accessibility. Put yourself on the other side of the spectrum.
Plan B is more of an Alternate than a back up; it should be specific and contingent upon certain benchmarks in Plan A. Most importantly, Plan B works to diversify your income!
Plan B focuses on other applications of a product, alternative markets and repurposing. Bring into scope broader customer bases and possible partnerships which can excel your ideas. This is the planning which considers financial alternatives and investors. Set aside one day a week or month or whatever to work on stuff towards a plan B, e.g. pursue a business idea, develop a skill, or build a relationship.
Plan C is a no-fail. Try to create a situation where the product will stay in the market in a catch-all arena. Even if it is not entirely successful but still profitable it will give you time you need to reload before getting back in the game. What sector can you pivot to where there is always s need and always an opportunity such as education, mass media, families etc. The certainty of Plan C is what allows you to take on risk in your plan A and B.
The best example I’ve seen of this is the Teddy needs a bath Company as seen on SharkTank. Properly executed this company can operate using the Deliberate Planning Method. If you have seen the episode Nicole Townend from California developed “Teddy Need a Bath” after she saw how dirty her child’s stuffed toy got after playing outside. She knew washing it would damage it but could not afford dry cleaning. Realizing there was nothing on the market she invented a zippered bag where the stuffed animal is deposited then put in the washing machine. In doing so she noticed other trends in the industry which she could address using her skill sets. She also created a children’s book to go along with the washing bag along with dryer sheets that smell like candies, fruits and other scents. Whether the bag succeeds or not she can focus on the dryer sheets as many of the investors on SharkTank, or “The Sharks” so
Craigslist founder Craig Newmark wasn’t out to create a website for classified ads when decided to create an email list for local events in early 1995. In the beginning Newmark posted all of the links which were exclusively designed to alert people to events happening in the San Francisco Area.
People worked the network and it quickly spread out to other areas of San Francisco so Newmark began to allow users to post with no moderation and Newmark was surprised when
Craigslist incorporated as a private for-profit company in 1999. Around the time of these events, Newmark quit his job as an engineer and focused full time on his event network. By April 2000, there were nine employees working out of Newmark's apartment in San Francisco.
Current CEO Jim Buckmaster joined the company as lead programmer by 2000. The site's multiple city architecture, best-of-Craigslist feature, flagging system, self-posting process and personals categories was built by buckmaster.
Craigslist grew into nine 29 more cities in 2003. On August 1, 2004, Craigslist began charging $25 to post job openings on the New York and Los Angeles pages.
Now Craigslist and has listings in nearly every major city across the U.S. and is recognized as a trusted and leading source of classified ads, jobs, sales and any number of miscellaneous human interests.
Newmark recognized the need to set a goal which not in relation to his product directly. He would pursue the goal but as other opportunities became apparent he adjusted his plan to match the market demands. Even though it was apparent that Craigslist was becoming successful not in the way he had intended he remained flexible in its application as a contingency.
Make explicit the assumptions and hypotheses in your plan you’ll never have complete certainty what your plans will go through, you fill those holes with your knowledge and skills. But the only way to identify those holes and areas where you need improved this by doing actions not plans will generate the lessons that help you adapt to the next phase of the journey.
In other words if you are trying to design pill for blood pressure as a plan A and it happens to solve the condition of erectile dysfunction, don’t scrap it because you are so focused on the problem of high blood pressure. Sell the pill for erectile dysfunction and roll on with Plan B.
Try to think two steps ahead and what will maximize your efforts. You’re implementing this plan based on your competitive advantage or skills.
You’re contingency plans are pivot points you can make when your plan is not working or you discover a better way. If something goes seriously wrong you have a backup or safety net.
Most importantly, you cannot plan to plan. Once you have developed your primary plan you must move forward full steam ahead and execute the plan. Pivoting to your contingency plan cannot be a result of not acting on your primary plan. One of the prime and one of the main reasons businesses are unsuccessful is that they failed to execute a solid plan. Of the main reasons job-seekers remain unemployed is at the either have no plan or are not acting on their plan.
In football when the snap is called the players do not stand around waiting to see if the play will go into effect, they act on the play and follow through to the bitter end. You must act in the same way; act on your plan with blind tenacity only pivoting when you see aspects of the planned not working.
If you have followed the succession planning, you will be repaired if your primary plan fails.