Jeff Judy

Jeff's Thoughts -August 20, 2008

Planning Your Future, or More of your Present?

A month ago, I connected strategic planning to whether companies will fail, just survive, or actually thrive, when the current economic difficulties come to an end. Many institutions are having serious trouble now because when times were good, they couldn't be bothered to think about how they would cope with an economic downturn. And some organizations will thrive because even in the midst of the current crisis, they are finding the time to plan for how they will function in a rosier economic environment.

In other words, timing is everything. And it is the vision of a different future, of preparing for when things change, that leads to true strategic planning.

Now, every client I have has a "strategic plan." Planning is an annual ritual, supposedly a look into the future to identify actions to be undertaken, and resources to be applied, to thrive in that future.

But, frankly, too many organizations are really just planning how to extend their present, instead of preparing for their future. Their "strategic plans" start with whatever they said last year. They tweak some things, based on their results, so that next year's plan is an incrementally better implementation of what they are already doing.

You would think we would know better. When we analyze the financial health of our customers, history is very important. But it doesn't tell us the future. We make predictions, and formulate projections, that take into account what could change in the customer's environment. If a customer comes in with a very good history, at the end of a boom cycle, and you know we are all heading into an economic downturn, you don't just extend the trend lines to predict that customer's future. You adapt your projections to fit the future you see around the corner.

Strategic planning should always be about change. On the one hand -- the part that most people get -- it is about producing change, about doing things in new ways, and achieving better results.

But it is also about anticipating and responding to change. Let's be realistic, after all, economic ups and downs are always with us. Truly effective strategic planning is a matter of timing: when times are good, you should be devoting at least part of your planning efforts on preparing for a downturn, and when times are hard, you should set aside time to work on how to take advantage of the return of the good times.

If you are so mired in your present situation that for you, tomorrow is just like today, but more so . . . well, prepare to sit by the side of the road as the competitors who engage in true, and timely, strategic planning blast by you in the fast lane.