By Ironwood Investment Management How often do you hear this from a public company: "We're happy to share with you that our strategic plan just isn't working.” Of course, the answer is rarely, if ever. Companies are programmed to pursue their original plan. The board of directors and senior management set their priorities, allocate capital, make acquisitions, pay bonuses - all based on their strategic plan. Investors are equally programmed to buy stocks of companies with successful strategies. Earnings are easy to model, valuations fit into historically normal ranges, and the stories are upbeat and comfortable to talk about. Yet Plan A's do not always work. Execution sometimes isn't up to par, customers move away from the company's products and services, the corporate strategy itself becomes dated or flawed. In some cases, a division no longer fits, and in an extreme case, the company has to file for bankruptcy. Most investors have little if any patience for failing Plan As. The weaker Plan A looks, the faster investors abandon the stock. This is exactly when we start looking - when Plan A isn't working. We want to see a company make a major transition to a better future, driven by an event that will result in big changes in how these companies utilize their assets. That can include new senior management, a spin-off transaction, emerging from Chapter 11 bankruptcy, a major restructuring or turnaround, or some other significant strategic-level change. If the transition looks particularly promising, we'll take our position (long-only) and look to stay for several years, as long as the transition remains on track our turnover is about 25% to 30%. Not all events are worth the risk (we currently hold only 34 positions) and we only look at small/mid-sized situations or companies with market caps ranging from $500 million to $10 billion.