Most organizations begin their business planning work for the new year in the fourth quarter. Leaders hunker down to analyze year-to-date financial performance, define growth expectations and develop a business plan for the next year.
Another familiar ritual is that by the end of the first quarter of a new year, the business plan has degenerated into nothing more than a budget. From that point forward through year-end, management discussions sound more like financial reviews than operating conversations.
An alternative planning approach begins with these four areas of inquiry as a framework for leadership discussion and developing a 12-month business roadmap.
Conditions
- What do we know with certainty at this point about customer expectations and preferences over the next year?
- What conditions do we anticipate in the business operating environment over the next year?
- What will the talent environment (employee expectations, development priorities, new talent acquisition, attrition, retirements) look like over the next year?
- What are we most uncertain about in the external business environment over the next year?
- What are we most uncertain about within our organization over the next year?
Pivot points
- What internal organizational events would cause us to change our business plan during the year?
- What external business environmental events would cause us to change our business plan during the year?
- What internal or external events would cause us to change performance expectations for our organization during the next year?
Engagement anchors
- How will we (organizational leaders, all levels of management) sustain focus on our business plan (beyond the budget) throughout the next year?
- How will we ensure accountability for organizational priorities and strategies throughout the year?
- How will we ensure the alignment of our business activities with our cultural pillars throughout the year?
- How will we recognize extraordinary contributions to our goals and cultural pillars throughout the year?
- How will we address performance that does not align with goals and cultural pillars throughout the year?
Change leadership cues
- What cues in the external business environment might indicate the need for preemptive operating model changes?
- What competitive landscape changes might indicate the need for preemptive operating model changes?
- What cues in the internal organizational environment might indicate the need for preemptive operating model changes?
- What financial performance results indicate the need for preemptive operating model changes?
Stepping back and exploring these questions as the 2024 business plan pre-work accomplishes three things. First, the process will help leaders be better prepared to develop an actionable, adaptive roadmap to guide the company’s activities throughout the year. Second, the questions will lead to curious, strategic inquiry and constructive debate. Finally, documenting and sharing answers to these questions (preferably refreshed each quarter) provides leaders with a touchstone that links the business plan and financial performance.
Dave Coffaro is a management consultant specializing in guiding businesses in navigating change. As principal of the Strategic Advisory Consulting Group, he works with services firms to accelerate growth and generate more favorable economics. His most recent book is Leading from Zero: Seven Essential Elements to Earning Relevance.
Opinions expressed by SmartBrief contributors are their own.
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