When Things Are Uncertain, Why Should I Plan?

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Up to this point, it’s difficult to plan for 2021, given the uncertainty created by COVID. Owning a plan these days can be challenging if you don’t have thick skin but it’s altogether important.

For example, I have a nonprofit board meeting this week. We are just starting to formally kick off a major fundraising and construction project in the middle of a pandemic. This is because a fire destroyed a residential facility a couple of months ago in October. Amidst all of the uncertainty, I’m not providing solutions this week, but instead a structured way to think about how we get to the solutions and an approach that shows we’ll have them in March.

As leaders, we often feel we should have all the answers, but it’s OK (and truthful) at times to admit we don’t; that’s where you get to demonstrate leadership. Some of the world’s largest companies admit this, and that’s who I built a career helping.

When dealing with uncertainty, the primary question to ask is, “what is the objective?” I worked in PwC’s Technology Consulting practice, but most of my planning dealt with the business benefits created by technology investments. You have to focus on the client’s objective, not necessarily the ones you may be most comfortable with. For example, you may be familiar with installing an ERP. However, using it to improve customer service or reduce costs is the real objective. Misunderstood objectives are well illustrated with a dose of humor below:

Misunderstood Objectives Cartoon

In thinking about our COVID-induced uncertainty, I have a few recommendations:

  • Make sure you understand your current state. What’s my cash flow break-even? Do I have a variable cost component of my operating model, or is it all fixed?
  • Create a few scenarios, perhaps a best-case, most realistic, worst-case, and critical actions for each. What steps will you take if your worst-case scenario materializes? When will you know? Do you have leading indicators, or are they all lagging?
  • Establish a direction or theme. Are you planning for growth in 2021, maturing existing business processes, or perhaps reducing low-value operating costs?
  • Identify the trigger points and actions you will take. I’m primarily thinking about cash flow here, but it could also be based on revenue or a leading indicator like your sales pipeline.

I’ve seen real innovation happen in difficult years. The early adopters of outsourcing were trying to cut costs, but then they figured out that outsourcing can also create value as part of a variable cost operating model. Innovators seeking to better leverage large IT capital investments determined that massive standardization and simplification could turn fixed capacity infrastructure into variable capacity, highly available infrastructure — hence the cloud.

As always, let me or one of the partners at BKM Sowan Horan know if we can assist you with planning for your growth and profitability.