Some people miss out on life’s opportunities. They freeze themselves into inaction by overthinking worst-case scenarios and shying away from imagined calamities.
Others, full of optimism, forge ahead with gusto, experience meteoric success, and later face a precipitous change in fortune due to a circumstance that could have been planned for.
For career and business success, it’s worth pursuing a middle ground—one where we take calculated risks but have a fallback strategy in case Plan A craters.
Earlier this month, I vacationed in Leadville, Colorado, a small community with a storied history. The city’s name may not ring any bells if you live outside Colorado. But in 1880, Leadville ranked as Colorado’s second largest city. Several famous people built fortunes here, including Meyer Guggenheim – think museums and the Guggenheim Pavilion at New York’s Mount Sinai Medical Center – and David May of May Company department stores.
The nearby town of Climax got television reception even before Denver. And at the 880-seat Tabor Opera House, patrons enjoyed John Philip Sousa, the Chicago Symphony Orchestra, Metropolitan Opera stars, Harry Houdini, and Oscar Wilde.
Once vibrant and thriving, Leadville experienced a string of cringe-worthy setbacks that diminished its luster and population. I found myself wondering if better contingency planning could have mitigated the damage. These five questions came to mind as I heard Leadville’s stories:
What conditions Am I counting On?
Bimetallism, pegging the dollar’s value to gold and silver, versus a gold standard (pegging the dollar’s value only to gold) was a hotly contested economic issue in the late 1800s. Given the level of contention, it was not safe to count on the permanence of any government legislation on this topic.
However, it appears silver mining companies were banking on the Bland-Allison Act of 1878, which authorized bimetallism and called for large government purchases of silver, and the Sherman Silver Purchase Act of 1890, which expanded the purchase quantities, helping to keep silver mining profitable.¹
Was anyone asking, “What will happen if Congress decides to return to a gold standard?” When that occurred in 1893, the price of silver plummeted, feeding the Panic of 1893, a deep depression that resulted in many mine closures and left previously wealthy families in financial ruin.
What Assumptions Am I Making?
In an attempt to salvage Leadville’s economy and prominence, residents envisioned and built a massive tourist attraction in 1896. Leadville’s Ice Palace, “the largest ice structure ever built, housed a ballroom, a 180-foot skating rink, a curling rink, a restaurant, a dance floor, gaming rooms, a theatre, toboggan runs and a carousel house.”²
Stakeholders assumed the winter of 1896 would be like all others—cold and snowy. At 10,152 feet above sea level and with snow that typically lingers through May, no one expected an early March thaw. The melting structure, condemned on March 28 as unsafe, was “a financial disaster for the investors who built it.”³
Are All My Eggs In One Basket?
Leadville continued to mine lead, zinc, molybdenum, and other minerals. Despite the bitter lessons of 1893, the city failed to diversify its economy adequately beyond mining.⁴
What Paradigm Shift Might Derail My Success?
In the same decade that Swiss watchmakers were reeling from the game-changing introduction of quartz technology, Leadville suffered a similarly profound paradigm shift. The Climax mine, near Leadville, “at one time produced 75 percent of the world’s molybdenum,” an additive that strengthens steel.⁴ But in the 1970s, “new technology enabled copper mines to extract molybdenum from waste material. Caught off guard (by this new competition), Climax lost half its market share.” ⁵
How Will I Adapt To Changing Circumstances?
Hindsight is reliably 20/20. But it is foresight that lets you formulate a Plan B strategy before a disaster ensues. One might argue that 19th-century mining companies had limited or delayed information for decision-making, given the lack of electronic communication. But in 21st-century industry, you still find organizations counting on conditions that are likely to change, basing decisions on iffy assumptions, putting all eggs in one basket, or being blind-sighted by paradigm shifts.
The reason? I think confidence, dreams, ego, enthusiasm, intoxication with current success, and other factors create blinders and rose-colored glasses that keep us plowing ahead, instead of occasionally stopping to ask what-if questions. When someone does raise a yellow or red flag, have you ever responded, “Don’t be such a killjoy.” Or have you opined, “We don’t need to think about that right now”?
Leadville’s population plummeted from nearly 15,000 in the 1880 – some estimates say a total of 40,000 lived in the immediate vicinity of Leadville – to 7,500 in 1910 to 5,000 in 1920. When you visit today, you’ll find an economy still struggling to diversify beyond mining, a fancy opera house looking for a buyer, and a permanent population of about 3,000. Would the outcome have been different if business owners in Leadville’s heyday had explored the questions above more often and more thoroughly?
Plan B brainstorming sessions, using the five questions above, can help you build a safety net and may also spark your next great business idea.
1 – https://en.wikipedia.org/wiki/Bland%E2%80%93Allison_Act and https://en.wikipedia.org/wiki/Sherman_Silver_Purchase_Act
5 – From an exhibit at National Mining Hall of Fame and Museum, Leadville, Colorado