Traditional, corporate planning is quickly proving to be out of sync with the rapidly accelerating, fast-changing business environment. The volume, variety, and velocity of new information pouring in every second, from every corner of the business, far exceeds our capacity to meaningfully process it. It doesn’t help that most companies are still stuck with legacy on-premises planning tools of the past. That’s why I begin this series of blog posts by urging you to rethink the corporate planning process.
Start by questioning your current planning process
Here are some questions you must ask and answer for your company to start facing the reality about your current planning process.
- How much time is spent every year on the planning process?
- How many FTEs are involved (both finance and nonfinance)?
- What’s the tangible outcome of the planning process?
- What decisions does it help improve, i.e., where does it fit in the decision-making process?
- What would happen if you didn’t run the corporate planning process, or what’s the bare minimum you can get by with?
Answering these questions will likely create a burning platform from which you can start to change.
You must be realistic though, because even though you might think all you need is a new system, it goes beyond that. You must look at mindset, people, processes, and systems to effectively change your corporate planning.
We need a different approach to corporate planning
So, we agree now that the current planning process doesn’t create a lot of value, right? What’s needed instead then? This calls for further deep dives, which I’ll tackle in future blog posts; however, at a high level, we need a planning process that’s in sync with reality. What does that mean?
It means we need a planning process in which we re-plan when the assumptions we based our original plan on change. That could result in planning a lot more frequently than you do today, yet your whole plan likely doesn’t need to change every time. It also means that you should abandon a fixed planning cycle.
In other words, your planning process should switch from being reactive or fixed to active. In an active planning process, you constantly monitor the development in the key assumptions. When they are expected to move outside your comfort zone, it should trigger a conversation and a potential re-planning.
This might seem very high level and theoretical at this point, but I’ll share examples in future posts. I bet you’re now wondering if you should start to do something about your planning process. Stop wondering and start doing!