Passing the Baton: The ‘Break Glass’ Plan

Passing the Baton features a series of “letters” sent from Terry Corman, outgoing CEO of Firehouse Image Center (Indianapolis, Indiana) to his son, Ted Corman, who will be leading the business into its future. This series of communiques offers thoughtful views of a business undergoing generational transition, glimpses of the company’s history, and strong views of the realities of leadership. 

Through my 35 years in the printing industry, I have always believed that for long-term success in the printing industry, a printing business needs to be the right size for the applications it sells. When printing companies get too big, they are no longer nimble. If they are too small, they cannot afford the next round of faster, higher-quality equipment, and they perish because of a lack of competitiveness.  

I have never let our business get too big to be nimble, or too small, to stay in the technology game. 

Sales plans have always been in place to grow the company, but I have also always planned for setbacks. It was never lost on me that large customers can go away, and that product lines run to maturity and start to decline.  

Indeed, setbacks have happened, but here is how I have protected the long-term future. In order to react quickly without making bad, emotional decisions, I always had all of my cost-cutting decisions, printed out, in a manila folder, and sitting in a desk drawer. 

They are comprehensive, highly detailed documents. When troubles hit suddenly, we always had a carefully crafted cost reduction plan on paper, based on our new sales level.  

Ben, our CFO, calls them the ‘break glass’ budgets. As in ‘in case of fire,’ break this glass and pull the alarm. The budget has different levels of cost reductions, depending on the severity of the setback. 

Over the last 35 years, we have lost our largest customer both slowly and overnight. We have seen product lines – heck, the entire photo industry – reach maturity and then perish.  

While you work on your plan to grow Firehouse to new levels of success, don’t forget that the “old man” survived several hard times, by always having a plan for the worst.