Out of Control
Let’s be honest – no one is really in control. Life is a series of unexpected events that leave all of us disoriented at one time or another. While some events are foreseeable, the timing of those events or the probability of those events and the occurrence of unforeseen events is difficult if not impossible to forecast. Epictetus, the Greek philosopher, taught that events of life are beyond our control, but that the way we react to those events is what matters. You cannot control what happens to you, but you can control your reactions to those events.
Strategic planning is the way to prepare appropriate reactions for the events of life. To create an effective strategic plan, there must be an awareness of foreseeable potential events and an understanding that the probability of those events – the exact timing of those events – cannot be ascertained.
In the business world, for example, we know owners will leave the business and that new owners may come into the business. We also know that owners’ values will change with their personal life circumstances and that this will result in new goals for the business. We have no way of knowing the specific life changes and cannot forecast what different goals may be adopted in the future. Moreover, the execution of these goals will depend on the ability of the business to execute actions to accomplish progress toward the realization of these goals. Knowing what actions will be required depends on knowing what the goals will be. Yet, we are not able to predict the future and cannot know the goals of the plan. So why try? Planning would seem to be an exercise in futility.
Compare the possible occurrence of a fire. The event is foreseeable but not predictable. Why have a fire drill? Even if we cannot predict when the fire event might occur, it makes sense to identify the procedure for exiting the building and knowing what to do in the event of a fire. This is valuable in that it could prevent injury, save lives and protect property should a fire occur. The fire drill approach is helpful. For each foreseeable event, we can establish a procedure that provides the discipline of a reaction if the event occurs.
In the event of an owner leaving a business, we can establish an owner agreement among the owners to anticipate and control some aspects of future owner conduct. There can be notice provisions and procedures in the owner agreement to provide time to react (since we cannot predict the timing). The owner agreement can contain buy-sell provisions to provide timing and costs to foreseeable events (for instance, an owner leaving the business or wanting to buy the interest of another owner). If the event of the owner leaving the business (the fire) occurs, we can have in place procedures that will save the business from unnecessary damage or termination.
For each foreseeable event, the policy-making group of a business can use the fire drill approach to put in place procedures that will prevent damage to or termination of the business. A proper planning process involving group decision-making will provide a commonly understood interpretation of those provisions that will help to ensure compliance.