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Why Business Planning is Still as Relevant as Ever · Enhance.training

• 0:00
  SPEAKER_00: An hour of planning can save you 10 hours of doing.
• 0:03
  SPEAKER_00: This quote from Dale Carnegie sums it up for me.
• 0:07
  SPEAKER_00: Effective business planning, whatever the size of the business you work in, makes a huge difference to staff morale and focus, to the operations, communication and coordination within a business, and of course to financial performance.
• 0:21
  SPEAKER_00: In this podcast we explore why business planning is so useful and take a look at adaptive business planning, which allows your planning to flex to the challenges facing the business in near real time.
• 0:33
  SPEAKER_00: My name is Jess Carls, and I've had a 25-year career in business management across household names like Innocent Drinks and Fosters to many less well-known businesses.
• 0:43
  SPEAKER_00: I've been involved in implementing flexible planning within corporates to SMEs, and I've seen firsthand the benefits.
• 0:50
  SPEAKER_00: If you're new to this podcast, Enhanced.training provides online business courses to help professionals, managers and business owners improve their performance.
• 1:00
  SPEAKER_00: And if you like this podcast, please share it with friends and colleagues and visit us at enhanced.training for more great tips on transforming performance.
• 1:11
  SPEAKER_00: So as we near the end of 2020, it has been an unforgettable year for most businesses, unfortunately for mainly the wrong reasons.
• 1:19
  SPEAKER_00: And you may be thinking that it's not worth doing a business plan with everything so much up in the air.
• 1:25
  SPEAKER_00: If 2020 has shown us anything, it is to expect the unexpected.
• 1:30
  SPEAKER_00: It is to be prepared to radically change your business if you need to, whether that is to try and keep up with unprecedented demand or to adapt and change your business in ways you had not even imagined.
• 1:42
  SPEAKER_00: So considering the turmoil this year, it is tempting to wonder why business planning is even necessary.
• 1:48
  SPEAKER_00: What is the point of spending hours making a business plan when you know that reality will be different?
• 1:55
  SPEAKER_00: Well let's quickly discuss why business planning remains as relevant as ever.
• 2:00
  SPEAKER_00: Business planning gives us direction and it gives us focus.
• 2:04
  SPEAKER_00: It is far better to focus on fewer targets and achieve them well rather than try and do everything all at once and not really succeed.
• 2:12
  SPEAKER_00: A business plan helps the team to choose which goals to focus on.
• 2:17
  SPEAKER_00: Tests have shown that doing too many things results in none being done well, and of course common sense supports this.
• 2:25
  SPEAKER_00: Finally, business planning helps spot issues and opportunities ahead of time.
• 2:32
  SPEAKER_00: There is always a lag between making a decision and seeing the impact of that decision within the business.
• 2:38
  SPEAKER_00: Planning ahead allows the business to react as quickly as possible and take full advantage of the opportunities it has and also to sidestep potential problems.
• 2:50
  SPEAKER_00: Let's start by having a quick look at traditional business planning and why real benefits are often missed.
• 2:57
  SPEAKER_00: There are many misconceptions about business planning, so let's start by looking at what business planning is not.
• 3:03
  SPEAKER_00: Well first, business planning is not simply about writing a document which then nobody uses.
• 3:10
  SPEAKER_00: Nor is it just a financial budget which sets financial targets that everyone must meet without setting out how to achieve them.
• 3:19
  SPEAKER_00: This is target setting and not really planning.
• 3:22
  SPEAKER_00: And finally, planning is not a magic wand.
• 3:26
  SPEAKER_00: A plan will require work and it may need a change in how you work to be a success.
• 3:32
  SPEAKER_00: The traditional method of budgeting or planning is your typical one year annual budget.
• 3:37
  SPEAKER_00: You and your team spend hours pouring over the numbers and charts to create a plan for the year ahead to meet specific targets.
• 3:44
  SPEAKER_00: The problem with this method is that each department or team must work out separately, in isolation from each other, how they're going to achieve their financial target.
• 3:54
  SPEAKER_00: Departments and teams don't really support each other, don't help each other, making the overall targets harder to achieve for the business overall.
• 4:03
  SPEAKER_00: Then that planning is not really used in the day-to-day business.
• 4:07
  SPEAKER_00: It is no wonder that most people see budgeting as a little bit of a waste of time.
• 4:12
  SPEAKER_00: There are so many ways of planning.
• 4:15
  SPEAKER_00: We suggest whichever you choose that you build into it flexibility and regular review meetings.
• 4:21
  SPEAKER_00: This allows the business to adapt the plan to take into account internal and external events or conditions, thus keeping the plan useful and relevant throughout the year.
• 4:31
  SPEAKER_00: Let's take a quick look at adaptive business planning.
• 4:35
  SPEAKER_00: Adaptive business planning creates a whole business culture and a way of working that is forward-looking, proactive, and it drives improved business performance.
• 4:44
  SPEAKER_00: The key features of this planning method are, firstly, a long-term strategy broken down into yearly objectives with quarterly milestones for the current year as set.
• 4:55
  SPEAKER_00: Secondly, planning at a project and activity level that involves the functional and divisional managers across the businesses needed.
• 5:04
  SPEAKER_00: Third, a cross-functional team is formed with decision-making authority to drive project success.
• 5:10
  SPEAKER_00: Fourth, monthly reviews are held with project owners and management to discuss the progress of each project and what, if anything, needs to change to drive success.
• 5:22
  SPEAKER_00: Fifth, each project has their own set of assumptions, milestones, targets and their own budget as well as a clear owner.
• 5:31
  SPEAKER_00: And then projects are added or adjusted as required to keep the business on track to meet its longer-term objectives.
• 5:39
  SPEAKER_00: This process allows you and your colleagues to respond as quickly as possible to events and drive performance improvements.
• 5:48
  SPEAKER_00: The key is to create a tactical decision-making team at the centre of the business.
• 5:53
  SPEAKER_00: Opportunities and challenges need to be spotted in advance with time to adjust plans or create new ones.
• 6:01
  SPEAKER_00: Opportunities and challenges need to be spotted in advance with time to adjust plans or create new ones to make the best out of each of those or sidestep the worst, thus driving financial performance.
• 6:13
  SPEAKER_00: Let's quickly talk about how we start this planning process.
• 6:17
  SPEAKER_00: There are many elements to getting a flexible and responsive planning process in place.
• 6:23
  SPEAKER_00: The key steps to start are, firstly, the management team needs to understand and support a change in planning approach.
• 6:31
  SPEAKER_00: Secondly, a cross-functional team should meet and start identifying distinct projects within the business that will make a difference to the business performance and the financial results.
• 6:41
  SPEAKER_00: Examples might include, say, a project to reduce the cost of a key ingredient by say 10%.
• 6:47
  SPEAKER_00: Or it could be increasing the use of content marketing campaigns over the year to increase inbound leads by 25%.
• 6:54
  SPEAKER_00: Or it might be pay down debt by 2 million to create more funding flexibility and business resilience.
• 7:01
  SPEAKER_00: Or it might be to launch four new products into specific sales channels to capture a current consumer trend.
• 7:08
  SPEAKER_00: I'm sure you get the idea.
• 7:10
  SPEAKER_00: Each project should have a short written project plan with its own budget.
• 7:17
  SPEAKER_00: Third, keep identifying and creating projects until you have met the goals of the business within the required time frames.
• 7:24
  SPEAKER_00: And fourth, set up a review process so that a business can keep adapting current projects and add new projects to ensure the business exceeds its goals and objectives.
• 7:35
  SPEAKER_00: We suggest that you focus the business around a 90-day cycle rather than a full year cycle.
• 7:41
  SPEAKER_00: This creates a time period that is long enough to get quite a lot done, but is not too long that it becomes a little bit too theoretical or the end date's too far away to create focus today.
• 7:51
  SPEAKER_00: And it will be difficult to start with this process as most businesses are not traditionally set up to work in this way.
• 7:58
  SPEAKER_00: It's really important to create a rhythm of meetings, so I would suggest you meet at least once a month and more often if need be.training to find more articles, podcasts, and videos on many aspects of business management.
• 9:40
  SPEAKER_00: Thanks very much for listening, and I look forward to speaking to you again soon.