Fordham senior manager Scott Douglas details how to effectively plan for uncertain times.
We’re now a little over 12 months into living with COVID-19 and entering another annual planning cycle filled with uncertainty which, given planning is informed guesswork at the best of times, is a daunting task.
So how do you plan for uncertainty? Put simply, the same way you would plan for certainty, albeit that secondary plans need to be available for implementation should the need arise.
Now to building your plan, where do you start? To be able to build a robust plan you need to know what you want to achieve. Without this goal, your plan will ultimately fail as it has no purpose.
Once your goal is in place you need to understand where you are before you can start getting to where you want to be.
The simplest way to do this is through a strengths, weaknesses, opportunities, and threats (SWOT) analysis.
This analysis should take time, involve people from all parts of the business, and would ideally be conducted by an external facilitator as they will be able to tease out some of the finer points of the conversation.
Upon completion of your SWOT it should be clear that there are many weaknesses to work on and opportunities to exploit. These should be whittled down to a workable number, say, eight in total, and will form the basis of your plan.
Once your plan is down on paper, the most important, and often missed, step is next.
That is, having your plan reviewed and assessed by people not involved with its creation, so that the plan can be stress tested and improved.
This stress testing, much like the SWOT from the plan creation stage, should be conducted by a group of people from across the business and with an external facilitator.
This step can be as simple as reviewing the plan for stated and unstated assumptions and then testing their impact on the plan should they not hold true, or, it can be as complicated as following the plan through to completion through war gaming techniques and simulations.
With the stress-tested and improved plan now ready to be put into action, how do you ensure it is successfully implemented?
The answer to this question is to embed the plan into staff members’ KPIs through tools such as scorecards and budgets for specific projects included within the wider annual budget for the business.
By building the plan into the budgets and KPIs it will, hopefully, drive the behaviours required to create responsibility and ownership over the plan with the staff to ensure your plans succeed.
Of course, not all plans work out as intended, so what do you do if an unforeseen event arises to turn your best laid plans upside down?
Ideally you will have already envisaged this through your plan stress-testing phase and have a ready-made back-up plan to pull out of the bottom drawer, but if you don’t have this plan available, you will simply need to build it.
And always remember, failing to plan is planning to fail.
This information has been prepared by Fordham Business Advisors Pty Ltd (Fordham) ABN 77 140 981 853 AFSL 488639 and Perpetual Trustee Company Limited (PTCo) ABN 42 000 001 007, AFSL 236643. Perpetual Private advice and services are provided by PTCo. To view the Perpetual Group’s Financial Services Guide, please click here. Fordham’s liability is limited by a scheme approved under Professional Standards Legislation.
This information, including any assumptions and conclusions, is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change. It is general information only and is not intended to provide you with advice or take into account your objectives, financial situation or needs. You should consider, with a financial adviser, whether the information is suitable for your circumstances. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. This information is believed to be accurate at the time of compilation and is provided in good faith. Fordham is part of the Perpetual Limited group.