WHY PLAN?
A boxing legend famously said, “Everyone has a plan until they get punched in the mouth.” Covid-19 taught us that best drawn up corporate business plans do not protect businesses against all eventualities or guarantee business success. In fact, during the recent pandemic, businesses that committed significant resources to major projects according to well laid out plans without effective contingency planning, are the ones which got hit most. So, if plans are infallible, why plan at all? In fact, it is post pandemic that many large corporates have accelerated efforts to create more robust digital focused business plans that are strategically realigned to core priorities and integrated with scenario planning for risk mitigation. Words like agility, resilience, adaptability etc. are heard more commonly in board rooms post Covid. Obviously, corporate plans need to be all of that and more to be relevant in the ever-evolving business scenario.
PLAN VS PLANNING
“In planning for battle, I have always found that plans are useless, but planning is indispensable.” This, from a well known military strategist and former US president is so truly relevant in the current context. Plans are built upon premises and when they shift around, plans become irrelevant or unfit for purpose. There are corporates that undertake business planning as a yearly chore and treats it as a task with a clear start and end date. On the contrary, it is when continuous planning takes over the place of the annual cycle that true rewards from planning are derived.
Focus must be to foster an organisational culture which embraces business planning as an integral part of doing business.
NINE PLAN IMPERATIVES TO BE FUTURE READY
AGILE AND FLEXIBLE
One of the major challenges of a CFO is to keep corporate business plans relevant for whole of the plan period. This cannot be achieved with traditional rigid, long-term plans which were getting obsolete even before pandemic. Disruptive modern technologies, market shifts etc. mandate that plans be agile to accommodate them as they emerge and stay fit for purpose. Agile planning allows businesses to adjust strategies, allocate resources and seize opportunities swiftly, ensuring sustained relevance and competitiveness. Developing a culture that fosters flexibility will enable them to respond promptly to market shifts, emerging trends and unforeseen challenges. Business planning framework needs to provide for periodic reforecasting of business performance thus providing continuous visibility into the expected future performance. Further, budgets need to be prepared such that rephasing can be done as and when required.
DATA DRIVEN; TECHNOLOGY ENABLED
With tools available for some time now such as big data, machine learning etc., corporate planning already leans heavily on data driven insights. As more use cases are created for Artificial intelligence and these get embedded into currently available tools, predictive models will get more impactful. Needless to mention, investments made to predict customer behaviour, demand patterns etc. would be a huge competitive advantage. This will facilitate optimising supply chains, improving efficiencies, minimising risks and foster innovation while driving sustainable growth and profitability. Harnessing the power of analytics, artificial
intelligence and machine learning, businesses can derive actionable intelligence from vast volumes of data and keep plans agile. It is critical to have relevant data to be available on demand for decision makers. Atomate repetitive tasks, improve communication and collaboration thus gaining insights from data. Investments in appropriate technology stack can help businesses to operate more efficiently, scale up and gain a competitive advantage.
CUSTOMER CENTRICITY
Enough has been said about keeping customer at the centre of everything. While most of this might have been lip service in the past, customer centricity has become an imperative. With digital aggregators creating virtual marketplaces out of every imaginable segment, choice available for customers have burgeoned and loyalty as we knew it is a thing of the past. Further, constantly evolving customer preferences are reshaping markets and industries. Varying demographics and shifting purchasing power trends in different geographies pose interesting challenges to businesses. With verticals getting disrupted one after the other with digital technologies, customers are getting used to and increasingly demand omni channel engagement. Harness customer data and feedback at all touch points to anticipate customer needs and stay ahead of competition. Corporate planning must embed this understanding and cater to the modern consumer’s preferences.
COLLABORATIVE PLANNING
In a hyperconnected world, collaboration is key to success. New age corporate planning emphasizes the importance of forging strategic partnerships, alliances and ecosystems. By collaborating with external stakeholders, including suppliers, distributors and even competitors, companies can access complementary resources, expertise and market reach. Strategic partnerships enable corporations to innovate faster, enter new markets and create value for stakeholders. Since traditional organizational structures hinder agility, creating cross-functional teams, encouraging collaboration and breaking down silos between departments is the key. While breaking down silos require persistence, corporates need to encourage internal knowledge sharing, use digital tools for collaboration and communication thus fostering collaboration and shared goals.
PROFIT VS PURPOSE- THE BALANCING ACT
Profitability is essential, but purpose matters too. Imperatives of new age corporate business planning extend beyond financial metrics to encompass sustainability and CSR. In an era marked by heightened environmental awareness and social consciousness, businesses are increasingly expected to operate responsibly. Integrating sustainability goals into corporate planning not only mitigates environmental impact but also enhances brand reputation, attracts socially conscious consumers, talent and mitigates regulatory risks. Embracing CSR as a core component of business strategy is not just a moral imperative but also a strategic necessity in the new age. Corporate structures for goal setting, achievement and reward systems need to incorporate ESG elements as well.
SPEED AND SIMPLICITY
The pace of change also demands agility. Simplify processes, reduce bureaucracy and empower employees to act swiftly. Prioritize speed over perfection does help. Flatter organisation structures manage culture change faster with seamless communication. Streamline and simplify processes by identifying bottlenecks and unnecessary steps. Encourage a culture of experimentation and risk-taking.
ANTICIPATE AND ADAPT TO DISRUPTIONS
The next normal will bring both challenges and opportunities. Be proactive in identifying trends and adapting your business model. Constant monitoring of industry trends, technological advancements and market shifts is required to anticipate disruptions. Flexibility and adaptability against disruptions are critical to be built into plans. Business continuity planning needs to be an integral part of corporate business plans providing scenario planning to address potential disruptions.
ATTRACT, RETAIN, UPSKILL THE RIGHT TALENT
Attracting and retaining skilled finance talent ranks high among CFO priorities. Identify skill gaps within your workforce, offer training programs and mentorship and encourage employees to learn continuously and adapt to changing roles. Invest in Talent Development and Reskilling programs. Finance team needs to partner with business leaders to confirm their understanding of various business drivers, trends, KPIs etc. and share actionable business intelligence to assist in achieving plan targets.
EMBRACE CONTINUOUS LEARNING & INNOVATION
Establish a culture within the organisation for continuous learning and innovation. Setting up cross-functional innovation teams to explore new ideas and technologies will scale up organisational ability to learn and innovate. Encourage experimentation, celebrate failures as learning opportunities and seek innovative ideas from diverse sources. This culture is an essential foundation for business resilience and adaptability.
TO CONCLUDE
Amidst technological advancements, market disruptions and changing consumer preferences, traditional approaches to corporate business planning are being disrupted and redefined. Embracing agility, data- driven decision-making, innovation, customer-centricity, sustainability and collaboration among others are essential for staying competitive and relevant in today’s dynamic business environment. Fundamental shift in approach and mindset is required to internalise the imperatives of new age corporate business planning. By embracing these imperatives, companies can chart a course towards long- term success, resilience and prosperity in the new age of corporate planning. These imperatives are not standalone actions but interconnected principles. While quantifying the impact of these imperatives can be complex, relevant KPIs can be developed to track progress consistently. Involve your leadership team, communicate the vision and engage employees at all levels. Regularly assess progress and adjust your strategies as needed. Remember that challenges are opportunities for growth. Use expert advice, address challenges systematically, involve stakeholders and celebrate small victories along the way.