“No battle plan survives first contact with the enemy.”
Uttered by Helmuth von Moltke, considered one of the greatest military strategists in modern times, he was attributing that to improve the odds of success on the battlefield, one needs to constantly gauge and readjust their plans.
Put another way; there is no “one perfect plan.”
Rigidly sticking to a plan in a changing, unpredictable environment is likely to fail, so is not planning at a regular cadence.
Plans are not static. They are living documents.
As the world around you changes, you learn more about your business and the environment it operates in. And with time, your plans require you to refine assumptions, recalibrate growth targets, and course correct.
It’s about being flexible enough to react to changes and being proactive at the same time in anticipating those changes. After all, a plan is about employing the most appropriate tactics at the right moment to achieve your targets.
But, if a business takes months to plan, as is often the case in the SaaS industry, it’s already outdated by the time the planning exercise is complete.
Traditional planning takes a long time. There are several delays—from getting current business performance to aligning plans and people to your strategic objectives. During plan execution, there are further delays in identifying the bottlenecks to growth and making course corrections to make things better. The lack of agility and speed in planning means your business is unable to seize opportunities nor mitigate risks on time.
As a result, oftentimes, plans and budgets are created annually and largely remain fixed.
So, how often should you be revisiting your plans?
Given the events of 2020 and the continued volatility, there’s a clear need for shorter planning cycles supported by frequent updates.
Having said that, there’s no specific number. Since in today’s volatile business environment, even fixed quarterly planning cycles might prove to be too rigid.
The rule of thumb is to revisit and, more importantly, revise your plans as often as your business needs. Higher the market uncertainty or the number of disruptions, the shorter the planning intervals and vice versa.
It’s why continuous planning is becoming increasingly popular.
Shifting to a continuous planning approach
Moving to a continuous planning cycle from an annual one requires changes to the existing process. We have listed these below:
1. Monitor your Base Rates
Closely monitor the base rates of your business drivers. Whenever there are significant shifts in your base rates over a sustained period, update your plans with the new assumptions.
2. Create multiple scenario plans
Identify opportunities and risks and have scenarios planned for each of those outcomes. This provides a structure for addressing uncertainties and helps to pivot to one of the planned scenarios quickly.
3. Set aside a budget stabilization fund
Earmark a portion of the total budget for plan pivots should one of your planned scenarios get triggered. This adds flexibility to your plans since your course-corrected plans may have tactics or line items that require additional investment.
4. Shift to a rolling 12-month plan
The most direct way to check if your strategic targets are still accurate is to move to a rolling 12-month plan that is amended every month. Make sure to review the performance (actuals) from the recently ended month and revise the plan so your company is more flexible to changes and can react quickly.
Step-up your planning with Drivetrain
Continuous planning requires real-time visibility into current business performance. It requires you to centralize your data and plans to manage and analyze the information more efficiently.
It requires purpose-built tools to monitor real-time business performance against your plan targets and make adjustments. It needs to enable stakeholders across the organization to collaborate on plans and data, quickly identify bottlenecks and course-correct.
Drivetrain helps your business stay agile with continuous planning to keep pace with changing business conditions. With the familiarity and ease of Excel spreadsheets, powerful collaboration capabilities, out-of-the-box integrations with 200+ business systems, you can rapidly forecast, iterate plans, and make confident decisions as your business grows and changes.
To learn more about how Drivetrain can help your organization, contact us at email@example.com to schedule a demonstration.