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Why ‘planning on the run’ is important for business survival.
‘Planning on the run’ describes the process of creating a business plan for your organization in the moment you experience and react to unexpected forces bombarding it and forcing it from its intended course.
Your business plan was finalized in January and here it is April, and you find yourself in a pandemic with restrictions imposed on you that render your 4-month old plan obsolete.
You absorb the body blow and then it’s time to create a new future given the new times you find yourself in.
COVID-19, unfortunately, is just one example - albeit an enormously serious one - of the continuum of random events that have impacted organizations for the past several years and will likely to continue in the future.
There are other examples ‘acts of randomness’ that have had serious impacts on businesses:
— a surge of online shopping;
— the growth of digital media;
— the rise in popularity of streaming video services;
— overnight job losses due to COVID-19 (1219);
— competitor consolidations increasing business vulnerability;
— changes in regulations that put business models at risk.
Random, unforeseen change is the new normal for businesses, and planning on the run is the only way they can adapt and survive
In our new world everything is temporary:
- Opportunities are here today and gone tomorrow;
- Business continuity is gone; it’s a thing of the past;
- Trend lines are meaningless;
- Extrapolation is a waste of time;
- History is not a teacher of what will likely work tomorrow.
Organizations that do not learn how to plan on the run are destined to be victims of stochasticism; they will die at the hand of discontinuity
Planning on the run is an art form, it is not a science based on algorithms that try to connect independent variables to predict an outcome. It relies on leadership who understand that a number of human factors determine how well an organization responds to the unforeseen.
These 5 actions will launch you to plan on the run.
Business plan — when you construct your business plan, establish a short term planning horizon. The days of 5-year plans are over.
The 5-year plan worked when relative continuity of those factors that influenced organizational performance prevailed.
Your business plan should reflect discontinuity, which argues that brief truncated planning periods be used.
My suggestion is to think about your plan as having 24 X 30-day plans. The emphasis on days as opposed to years will force you to closely monitor the execution of your plan and to be able to pivot when things aren’t working out the way you planned.
Precision — Get your plan ‘just about right’. There is no such thing as a high degree of precision when you’re in the middle of a storm, so why try to get your plan ’perfect’?
In times of crazy change, any plan is out of date soon after it’s published in any event.
’Let’s head west’ should be the principle that guides your strategy development when you’re up to your waist in alligators.
Your plan should be notional in terms of strategic intent; define a vague idea about where you want to go and refine it as you discover whether or not it’s working in the chaos that surrounds it.
Results — monitor and measure the key results of each 30-day plan period as soon as the month is over.
It is essential when organizations are squeezed by overwhelming pressure that success or failure be tracked in real time; in this world you can’t afford to wait another 30 days to have results reported — your reaction time to any pressure is compressed and you may be dead by then.
Values — Look at your organization’s values. If they don’t cover the critical importance of reaction to unforeseen events, they’re incomplete.
About the only thing that can be accurately predicted by organizations looking decades forward is disruptive change, so if nimbleness and reaction competencies aren’t an integral element in the culture of the organization it is not likely to survive.
This requires that all people-functions be recreated in the image of reaction: the people recruited and trained for every function in the organization must have the inclination and ability to react to the unexpected in a way that leans forward into the opposing force to produce a positive outcome.
In the new normal, individuals who are reticent to reacting to ‘body blows’ pose a risk to organizations; they cannot be tolerated
Customers — Invest any resources you may have available in activities that impact the customer.
Maintaining loyal customers in the face of chaos is critical. Make sure you are paying enough attention to the elements that are critical to providing great customer service (‘good’ service is not good enough when customers are experiencing the pain of change just like your business is.)
And redefine sales to be service with the emphasis of ‘taking care’ of people rather than pushing your stuff at them. Being sensitive to their pain will earn you the right to have their business which they will give you unabashedly.
Planning on the run is the new business planning process. It’s the only model that will work in the kind of world we’re now in.
‘Planning in motion’ is replacing traditional approaches buried deep in business management pedagogy.
Those organizations who take leadership of this new mode of orchestrating their business will succeed; those that do not will fail and die.
Related: Why Winning Brands Are Owned by People Who Are Different