By Tom Bogan, CEO of Adaptive Insights
We all compete in a disruptive, fast-paced world. That means you can’t afford to be caught flat-footed, unable to react with speed and agility to shifting market conditions.
It means you need a plan.
Every leader knows that success is no accident—you have to plan for it. You need to surface insights from what’s happening in your business so you can better anticipate what will happen in the future.
The very act of planning triggers actions that are essential to success. It forces you to think strategically about your business, causing you to prioritize critical issues. Only in the process of planning can you confidently identify the gaps (the distance between where you are and where you need to be) that tell you where you should invest capital, resources, and energy.
As a CEO, knowing that we planned the business at a detailed level gives me greater assurance that we have the right plan. It not only lets me see where we intend to go, but much like a GPS system, a good plan shows me exactly how we plan to get there. It even suggests multiple routes to reach the same destination. It’s a navigation tool that allows me to look closely at where we are as a business, what is driving our progress, what’s on track, and what isn’t. It uncovers both risks and opportunities.
In short, a good planning process forces you to think the right way about your business.
Planning is so fundamental that it’s not limited to the executive leadership team or even to finance. It’s essential to every type of organization, from small and medium-sized businesses to nonprofits and the largest enterprises. And every function within those organizations plans as well.
Planning is also far more than building a budget, because everybody—not just finance—plans their own work for capacity and operational optimization. The planning process is a closed-loop system that involves insights from analysis and feeds these insights into a point of view to consider scenarios about what will happen.
In most organizations, all that planning produces an ocean of individual, operational plans. They often exist in spreadsheets, disconnected from the corporate or financial plan that gives the business its direction. This is not a recipe for success.
We’ve thought a lot about how businesses plan and how they could do it better. After all, our company was founded as Adaptive Planning. Years of close collaboration with thousands of organizations of all sizes have taught us that modern planning is defined by a few fundamental truths:
- The best plans involve the people closest to the day-to-day business. The people who are immersed in the market and your ongoing operations will have the best insights into solving their own business problems.
- It should be easy to plan and make decisions quickly. Planning and decision-making shouldn’t be so hard. If it’s too difficult or too slow, not enough people can or will be able to engage in the process.
- Reporting and analytics are essential to planning and decision-making. For people to make timely and informed decisions, capabilities like easy reporting and intuitive analytics aren’t just nice to have, they’re indispensable.
- Finance is in the best position to orchestrate the corporate plan. While functional teams create their own independent models and plans that together form a comprehensive enterprise-wide model and plan, finance is the one providing the strategic oversight and coordination. Ideally everybody is engaged in an ongoing, closed-loop business planning process—orchestrated by finance.
Change is constant. That’s why planning matters.
Change is a constant in business. To keep up, we all need to get a lot better at navigating it. Implementing a modern, active planning environment that embraces everybody in the organization is an important first step along that road. That’s how to get everyone contributing to the plan, to create a plan that’s valuable to every area of the business, and to drive agility in a world that moves fast.
Indeed, in today’s disruptive, accelerated, blink-and-you’ll-miss-it world, that’s not just a vision. It’s a business imperative.
This article was originally posted on the Adaptive Insights Blog.