Business planning is pointless wishful thinking.
Planning is rigid, slow and bureaucratic.
The pace of technological change and industry disruption make planning redundant.
I’ve heard a lot of comments like that recently. Not surprising, because few, if any, of us foresaw the length and depth of the pandemic restrictions in Ireland or globally. So how could we plan for it?
Granted, many organisations were able to change direction to develop new products or services in reaction to the impact of the restrictions. In most cases these were done in reaction to events – they were not part of a clear plan for 2020. They were also executed far more quickly than would probably would have been the case even if they were planned.
Some of these changes in direction will become permanent parts of these businesses’ offerings: but may not have even happened if it was not for the ‘unplanned’ event of COVID-19.
Given the multiple challenges businesses have faced in the past 18 months – at least one of them unforeseeable – many business owners and leaders are wondering why they should bother planning for their organisations at all.
Reacting vs Planning
Successful strategy is often about reacting to events. Planning only takes you so far because you can only guess what will happen in the future.
Unplanned opportunities may be your best chance of creating a great strategy so you need to be constantly looking for them. Evidence supports the idea that the most successful entrepreneurs and leaders are fantastic at noticing opportunities. And the greatest opportunities come from reactions to unplanned events!
- Does this problem let us start again and do it better?
- What can we do today that was impossible yesterday?
- Is our plan still working? How can we take advantage of events?
Any fool can produce a plan. The genius is in seeing how new events open up new possibilities for the old plan. Or even entirely new plans that weren’t possible when the old plan was written.
The planner is continually sifting through events for evidence about how well the plan is working. He wants to see new opportunities for achieving his objectives and test is the assumptions used are still valid. Or new objectives that were previously impossible.
It’s difficult for some people to accept that reacting (not just planning) is a good thing. Managers have been taught the value of being (or looking!) organised. They have learned that being ‘proactive’ is what the business world wants. They have been told that being reactive is a bad thing.
Another practical challenge is making room for both kinds of strategy in the formal ways that your team or company is organised. Strategy is more effective if it is adapted throughout the year. Some of this is adjustment in the way that the strategy is executed. Individual managers and colleagues figure out how to react to circumstances in order to deliver the official plan – that’s agility.
Some changes to objectives, plans, and direction benefit from being brought back into the formal strategy. It’s a way of acknowledging that has changed. It’s a method for encouraging effort to be focused on new opportunities. It can reduce the negative impact of too many alternative approaches.
And it’s a lot more effective than simply planning, closing your eyes, and waiting for the results at the end of the year! You’ll know that you’re getting better at reacting (not just planning) when you find that some of the greatest achievements of the past year were not part of the plan at the start of the year.
Having a plan and monitoring your performance against it, allows you take decisions in reaction to events based on a current information rather than guesswork. That will increase your chances of success many times over.