‘Tis the season for strategic planning! But planning is anything but typical this year. I’ve recently received a number of requests to discuss how strategic or business planning needs to change to be relevant and impactful during these times.
As we enter the fall, many of us are deep into our business planning process for 2021. I assume none of us planned for Covid last year. The better question: How many of us deeply understood what we did plan for and were able to adapt and improvise once Covid hit? Last year was actually a great test for how relevant and agile all of our planning actually is.
Strategy has not changed. It’s still about creating and capturing value
Good planning does not predict the future—it deliberately debates assumptions and builds intended plans. As the world changes, those plans must adjust throughout the year when the original assumptions are materially impacted by the changes.
Smart strategic planning is never a numbers exercise. It’s a thinking exercise that results in numbers. While strategy has not changed, the way we all live, work and relate continues to change quickly. So what has changed is what people and customers value.
How does planning need to change moving forward because of Covid?
This is the question I have been asked quite a bit lately. First, all leaders must recognize that this year’s planning exercise is much deeper than an exercise in determining how much we can charge, how much they will buy, what the development and delivery costs are to us, and who will we be our competitors. But to answer this question, we first need to consider these critical factors that remain completely unchanged and super important to strong and successful strategic planning:
- Involve your team and assume you do not know everything the future holds.
- Drop incremental budgeting and think Zero Based Budgeting. ZBB creates a culture of cost control while forcing you to think about what is actually needed and what has changed.
- Debate assumptions about customers, competitors (new and emerging), employees, industries, etc. You need a diverse perspective and a trusting culture to honestly debate. As a leader, set the stage for trust and openness.
- Document your assumptions, so you can measure and adjust throughout the year as things emerge. Significant change could be a new competitor, unplanned M&A, or a global pandemic. Documenting assumptions better prepares you for all of it.
- Be deliberate about short-term goals (for the quarter and the year), but be just as deliberate at planting some longer-term seeds, so you have options as the future unfolds—particularly if it unfolds in a different way than you anticipated.
- Turn your assumptions into strategic themes and weave those themes into a story that can be easily communicated to all constituents.
- Always be open to change. Change is the only guaranteed constant.
Now let’s look at what has changed. We can’t deny long-term, permanent changes have been brought on by COVID-19. Most relevant to strategic planning, the content and nature of our assumptions and beliefs will be different—the process we follow will not. We live in a different world now. In order to succeed in business after a global pandemic, leaders need to factor the following into their planning:
- A move from shareholder value toward stakeholder capitalism
- A push toward communal interest, not individual interest
- A more powerful voice of the employee. Megaphone platforms like Glassdoor and social media enable and magnify these voices.
- Our customers’ and employees’ values, attitudes and behaviors
- The nature of work, its structure, and location
- The role of the office
- The nature of education and the value of a college degree
These are big concepts and even bigger opportunities for your business. I plan to do future blog posts going into more detail in each of these areas, so please check back often to learn more.
A universal inflection point brings unprecedented opportunity
The world has changed and so has what people value and how they interact. We are in the middle of a worldwide inflection point.
This is a chance to rewrite the rules. During this planning cycle, this is a chance to question and debate all long-held assumptions. Just take a look at the recent press: Big, established companies are trying to “get back to normal” (and struggling). Small, agile and progressive companies are working on defining the “new normal.” The biggest change resulting from COVID-19 is that organizational resistance to necessary change can no longer hide. Excellent! It’s no longer as acceptable to say “because that is the way we always did it,” or “you do not understand how our business works.” Today, everyone is in the same boat, and no one knows how it will all work.
When you are debating assumptions this year during your planning process, really debate the longest-held assumptions—the ones that are there because they always have been. This may be the most important part of your process and the key ingredient to not just surviving the pandemic, but thriving long after. You may finally disrupt yourself and unlock great new value that opens up a new world of opportunities.