Posted by The last quarter of the year has hit, and whilst you may be running around trying to finish what you wanted to do this year (self-included), this is the time when businesses are planning and budgeting for the next year. Individuals tend to do New Year resolutions, goal setting, or whatever they choose as part of the turn of the year. However, for a company, January is too late to plan. Now is the time.
Getting a good start
I have lost count of how many business plan templates or frameworks I designed through the years. In fact, I often drove my team crazy as every 18-24 months I would tweak something in our templates. The key reason for this was to ensure business planning was not a mere “tick-the-box” exercise. Instead, so that it is a moment used to think and really evaluate how the business needs to look like in 1 or 2 years, depending on how brave you are with your planning. So it was funny this week when one of the CEOs I work with asked me about suggested frameworks.
Know your North
I always like to start a good planning discussion with an existential question.
Why are we here?
One of the questions that can be debated is whether it is worth bothering with the big picture when all you want to do is plan for the next few quarters. After all, we are not going to reviewing our direction all the time, right?
I find that expressing your Why, or as I often like to call it, your North, to be an extremely important part of kicking off planning. Our goals need a why and an alignment with our values, as they will be more motivating day-to-day, and also easier to transmit when an organization is growing and wants to keep a consistent message. So yes, I do think it is important to include this in your planning.
Debate your How
Once you have a direction, there are many ways you can get there. So this is a good time to do some scenario analysis and determine what the possible paths can be to achieve your ambition. This can mean going local or going global, revamping your tech or launching a new product, approaching a new customer area or scaling down operations.
Thinking back to the book that is dominating my mind at the moment (Think Again), I would suggest an approach of “all options open”. If you can, enlist different people in your management team to pitch alternative options or to pitch against an idea they have previously proposed.
One thing that is important to remember is that you can probably not follow 10 different avenues, and the discussion on resources will come in just a minute…
Define your success
You may find it weird that I spoke about the how before defining success. If I am honest with you, I vary between the two, and they can not be disconnected. The reality is, your North needs to be translated into success, real numbers that you can then track quarterly. It is just like in goal setting, a North is nothing if it is not SMART!
Whatever methodology you chose to define your metrics, and whether you called them KPIs or OKRs, the methodologies are not that different at the end of the day. If you are trying to plan across, for example, marketing, operations, sales, product development, having a north will ensure you translate it into what it means for each of these areas. Knowing the how helps a step further, in defining key results for each quarter.
I find it helpful to break down per quarter, per area and, ideally, what it means for each person in the team. But whatever you do, don’t do it a nightmare process that takes more time to measure than to actually understand what is going on.
Get budgeting
When doing your planning, don’t stop at the goals. Goals are nothing without the inputs that it takes to get them done. In corporate terms, that means resources – money, people, tech, time. Which is why knowing how you are going to try to achieve your goals plays a role. You need to understand your main activities, define a roadmap so you can assess what it all going to cost.
And if you are brave, take a Zero-Budget approach. Every project needs to have a justifiable bottom-line impact that you can measure and prioritize.
This year, I am unusually not running around getting everyone to do their plans and instead, they are coming my way. Planning season is now, have you started?