The classic approach to business planning has always been framed by the construction of a generic business plan. Companies tweak the format here or three, but almost all shape their business strategy in the same paradigm without that much variation. The public regulatory requirements demand the same, so anyone looking for investment through public markets has to shape their strategy accordingly as well. However, the world has moved on and changed, showing more and more than the traditional model no longer applies to reality.
Integrated Business Planning
The key difference between integrated business planning versus traditional business planning is that it breaks down silos. The traditional approach puts sales and marketing in their own box versus operations versus human resources versus accounting versus research. That breeds silo-thinking and separation on the natural. In today’s business world the researcher may also be the head of operations and the marketer may also be handling the hiring of sales personnel as well as embedded in the accounting over his or her program. Those realities don’t match the nice, clean generic old approaches to business planning. Instead, a company needs to take an organic approach to planning that anticipates and takes advantage of the fact that managers and programs are serving multiple masters in the company at the same time.
Responsiveness to Fast Changes
2020 was a great lesson for companies on why the ability to change and shift fast has become so critical to business success. No one expected in January of that year how dramatic the social distancing shutdowns would be to industries far and wide, including international activities. The lessons to take from the COVID experience are far more than just dealing with remote work. Business strategy planning clearly needs to have multiple options and alternatives set up and ready to go that can be implemented in a matter of days and weeks versus months or an entire year. Those who were caught cold paid dearly for the lack of responsive planning altogether.
Layering the Responsiveness With Iterations
At the same time, long-term planning still needs to occur. The big change with implemented business planning here is that the long-term goals and approaches have to be changed more frequently with iterations. In other words, there is no such thing as a five-year plan anymore. The likely longevity of a long-term plan without changes is maybe 6 months in reality. As fast changes occur in the short-term, long-term revisions need to be applied and integrated with plan iterations and the related distribution of updated directions.
A Common Theme
In every step one will realize quickly there is a common theme with integrated business planning – speed and flexibility. What integrated business planning is not is just a rehash of the same silo-thinking that’s been around for decades. Doing so simply doesn’t match the demand of global markets and digital commerce anymore. Companies have to get past static planning and adopt a view that works cohesively with their fast-moving environment. That requires a lot more data availability, the ability to interpret it quickly, and a willingness to change paths without being locked into hard and fast strategy positions. In some respects, the modern business environment now is far more like running a military campaign in action versus planning it on a board. Lots of things have the ability to go wrong, but managers are adjusting and adapting quickly in the flow, and operations planning is reflecting that by the next day at the latest.
Fortunately, despite integrated business planning being new and hitting like cold water in the face thanks to 2020, there are a number of resources coming online to help companies adjust the change management and implementation. The training world for business planning has been responding to what has occurred, realizing with cutting-edge thinking that a lot needs to be updated to handle today’s economic and market challenges better. However, companies need to be willing to bring these resources in-house versus just looking at them from afar. This is where internal resistance comes into play. Many in the C-suite will argue they have everything they need or might be fearful of being exposed as unable to be responsive to current demands. This is why a safe harbor approach is needed from the top-down, recognizing that integrated business planning is a must, and no one is going to be punished for recognizing the need to learn something new. Otherwise, it won’t matter how many new plans a company comes up with; its own internal culture will break down repeatedly.