Why do businesses bother planning in such uncertain times? Jessica Fazackerley from Accru’s Adelaide Office considers how strategy and planning have changed to suit modern business challenges.
Crystal balls finally seemed surplus to requirements sometime around 2005. There was a long-term and predictable upward trend in most business indicators. You could project a business strategy and budget for up to five years and things would usually work out fine.
Then the global financial crisis arrived. Not only did it hit finances, but it dented confidence too. Since then, an emerging digital economy is also changing the way many of us do business. In fact, ‘emerging’ doesn’t really describe it. Digital technology has forced its way into lives and businesses and it is called ‘disruptive’ for a good reason.
In some businesses, leaders now question the point of planning because any plans they make will be out of date before the ink is dry on the page – and they are right up to a point. Things will change, and change quickly. However, strategic plans, business plans and budgets are in some ways more important now than ever. Of course responding to a new age of transformational change means that plans must take on new dimensions to be ‘fit for purpose’.
Firstly, it is important to recognise that the real power of planning lies in the thinking and ideas emerging from the process and not in the document itself. Strategic thinking, budgeting and business planning are all opportunities to contemplate the immediate future – what will we face as a business and how will we continue to be successful? Sharing the planning process with key staff is vital to realise this benefit of planning.
Secondly, a critically new dimension to successful planning involves thinking about and describing your vision or purpose clearer. A vision statement is a couple of sentences that show how things will look 3-5 years into the future if your business is successful. It needs to be more than a couple of key words, but not an essay! A good vision will ask:
- How will the lives of your customers be different / better because of your service or product?
- What does your business do particularly well to make the above difference?
- How will your business look because it is successful?
Note that a vision is not just about your future business – it describes your customers’ futures as well. So, in the case of a dental practice, not “To be the best dentist in the eastern suburbs”, but rather:
“Our patients are proud of their healthy teeth and gums and smile with confidence. They appreciate how we take time to listen, and explain our work to them and they leave our office feeling great. By 2020, we will enjoy serving 750 families”
For this dentist, the sign out the front might show the name of the dentist, phone number and opening hours with a marketing ‘tag’ line underneath: “smile with confidence”.
A solid vision statement can anchor your business direction and inform decisions and choices. For instance, the dentist might rule out increasing profitability by simply scheduling more patients each day as that is inconsistent with the vision. Instead, prices might be increased slightly or the hygienists may be trained so they take the time with patients to share that service commitment. Or, in order to suit the busy families who make up their target clients, the practice might structure two ‘shifts’, one from 7am to 1pm and one from 1pm to 7pm.
In changing times it is important to be agile, adjusting your goals (or even your products or services) to respond to change whilst ensuring a persistent and clear overall direction (or vision). Taking the time to think about and document a vision and share it with your team is still a very worthwhile use of time.