Planning ahead – what’s the point? It’s provisioning that we need

Every professional project manager knows that the secret to a successful project lies, for a very large part, in good planning. And I for one would say nothing to suggest otherwise. However, there’s a very poignant Jewish joke that sometimes returns to haunt me. Question: “How do you make God laugh?” Answer: “You tell him your plans”.

This is not the kind of joke that has you rolling over with laughter but a kind of double action joke that affects you on multiple levels. On the one hand the idea of God being able to see your future and that he cruelly takes pleasure in being able to laugh out loud as to how wrong you are. And on the other hand, on a more cynical level, where you yourself can look back and laugh (or cry) at the vision you once had and how it has turned out so differently.

I guess there maybe some people (purely based upon the law of averages) that for them, everything goes to plan? But for the most of us, this is clearly not the case. This does not however mean that things necessarily turn out for the worse – quite the contrary. Even in our biggest tragedies comes new hope, new ideas, and even new life.

The point I am making is this: Both in our business and in our personal life, there is no point in making very detailed, long term plans for the future. If you have ambition and you know what you want you should set out a strategy, not a plan, to best try and reach it. I suggest the following:
1. Understand very clearly where you are right now
2. Work hard on developing a clear and plausible vision as to where you want to be
3. Formulate a very clear strategy
4. Ensure you maintain discipline and follow rigorously your short term planning
5. Make provisions for the future

Every adventurer knows that they need a plan, but every adventurer quickly realizes that plans need to be constantly adjusted and revised in order to keep the long term vision in sight. But more important than plans are provisions. We need just enough provisions to keep us going through the rough times but not too much that they weigh us down or make us lazy. And this is the delicate balance that most businesses are facing right now.

So when planning for the future, think in terms of strategy and not detailed plans. And when you have plans, be prepared to change them for the sake of the long term vision. However, the one thing you should never compromise on is ensuring that you have sufficient provisions for yourself and those that depend upon you. Only a fool risks their own life, let alone, the lives of others by setting off with insufficient provisions to reach their next base.

Have a good week,

H.

“The end is nigh!”

When I was a teenager, working for my first summer holiday job in central London, there was an old man that used to walk up and down Oxford Street with a big placard with the words “The end is Nigh”. At 16 I laughed his prediction away, wondering what the scam was, what motivated him to make such a fool of himself.

However, 35 years later, with all the chaos that has hit the stock and financial markets, it is not surprising that among the thousands of articles one can read on the subject, there are many doom and gloom stories that sound very plausible: ‘Melt down’, ‘worse than the Wall Street crash’ and so forth. As I mentioned in my previous blog on the subject, ‘Crisis what Crisis?’ everyone seems to have an opinion, which is, of course, normal. But I am getting very concerned that many business people are missing the point entirely.

It is not important whether you believe everything will blow over within a few months or if the world's economy will not recover from this for a very long time. The important thing is that responsible business leaders must start to make serious contingency plans. Surviving is about adapting your strategy based upon realistic possibilities and not on blindly following what you think the outcome will be. A business is not something that should be gambled based solely upon what the CEO believes will happen.

Every business leader (regardless if they are running a small family business or a giant multi-national) has responsibilities towards their shareholders, employees, suppliers and customers – and these need to be taken very seriously indeed. Therefore I suggest the following:

DO NOT panic those around you BUT do:
1. Stop talking about how bad or ok things are going to be
2. Set up an analysis project – give it a name.
3. Agree at least three possible economic (short to medium term) scenarios from OK to complete disaster
4. Draw up a risk analysis for your business for each scenario
5. Adapt your current strategy plan for each scenario
6. Set clear economic/performance KPI’s (Key Performance Indicators) for each scenario that will clearly indicate when you need to begin implementing your strategy for each scenario
7. Have your project endorsed by your board, expert shareholders or advisory board – whichever is most suitable for your situation

What I am suggesting here is about anticipation and managing the situation as best you can. For example: imagine that you are in the retail business and you believe that revenues will start dropping (if they have not done so already) - at which point are you going to take action? When will you actually begin to look at alternative ways of shifting inventory, or closing down outlets and laying off staff?

Business people like to complain about politicians not doing enough forward thinking and planning – but to be honest I have the feeling that many business leaders are simply following a ‘lets wait and see’ scenario. By making clear plans and looking at the impact on the cash flow and credit liquidity etc. now, we will be able to make much better decisions later on.

I have been in situations like this before, but not ever as bad as it ‘appears’ to be right now. I know that when things get really bad, people start panicking and take bad and irrational decisions. In the quiet before the storm, we need to separate emotion from action and make plans for both our businesses and our families. And, if the storm missus us completely, then at least we can feel comfortable knowing that we had a contingency plan in place, had it been necessary.

Please do not misunderstand me. I am not suggesting going into minute detail and pulling your staff off their daily tasks to panic about things they have no control over. All I am saying is: if, for example, your sales team are currently putting all their energy in a direction that you think is not likely to be effective in three months time, then maybe it is better to divert them into a more profitable direction sooner rather than later?

If your radar is telling you there is likely to be an iceberg ahead, then you need to begin now to decide how best you business can steer around it, once it appears. For some it is already getting rather too late.