It’s that season again.
And if you work with (or for) larger firms with lots of resources, your inbox is probably filled with reminders: this is the month we get serious about annual plans.
In past years, these exercises have been based on some high-level, economic forecasting that is then decomposed into specific planning facts, guidance, and guard rails.
These macro drivers are usually deceptively simple, yet they’re highly impactful to how your firm will be run for the next 12-24 months. We build measurement and control around these numbers, and the business unit leaders will be answering questions around these benchmarks for at least a year.
What is the growth assumption? What is the cost of capital? What shape will our new product investment take? What is the agreed to “base case?”
These are then cascaded into the organization to forecast capital and expense budgets, contribution margins, and human resource needs. Roll-ups are completed and overviews are taken.
In a “normal” year, this path will yield strong enough results – and provide useful guidance that can serve as benchmarks as we execute our business strategies.
This Year is Very Different
We know in our gut that the old tools are not going to do it – COVID broke it.
We need to depend on well prepared local leadership to be able to take actions that we couldn’t have anticipated on behalf of our firm’s stakeholders – so how do we do that?
Some experiments are underway. I’ve spoken with more than one multi-B firm that is using a rolling planning strategy. So, rather than a traditional 36-month plan, they are doing 90-day “sprints” as a firm instead.
How’s it working? It’s still too soon to know. But early observations show that there is less “pivot” and more “inertia” to stay the course. Local leadership needs more from its senior teams to thrive in the current environment.
I’ve been spending time looking back at historic circumstances to bring the best possible advice and coaching to my clients for today’s challenges.
So….
What do we know, through the lens of history, about how to set plans with specificity AND resilience?
Lessons from the Past
For lessons from a team that truly parachuted into the unknown, let’s look back to WWII.
In a great read, West Point Grad and Historian Ed Ruggero chronicled the young American men who led the assault via parachute on D-Day.
The short summary is that the sourcing, training, and culture of planning were outstanding, but due to a variety of reasons (mostly weather and the youth of the pilots), the 3,400 men wound up massively out of their intended geographic position.
With only hours before the invasion proper, they needed to somehow regroup and accomplish their missional objectives.
Decision making could only be local, and peer leaders needed to rapidly form teams with deep trust and collaboration.
The story is truly one of adaptation and success under the highest possible moment of pressure. For this article, let me suggest three takeaways from Ed’s book:
#1: In times of major stakes, invest deeply in creating a bedrock culture of performance and mutual respect
What they did: Colonel Gavin created a strong training regimen that served to self select only those that could meet the highest standards (50% drop out rate) and created an esprit de corps that would carry them through the challenges that came.
What you can do: Shift your focus to finding those leaders on your team that have the most skill at adaptation. Build your cross-functional efforts with these leaders at the center. Build these teams with a skillful selection of leadership styles (see posts here, here and here).
#2: When you anticipate uncertainty, be sure the missional objectives are deeply held by the whole group
What they did: Colonel Gavin set a tone of not just memorizing, but learning and thinking. His exercises rewarded those who could interpret and take action. When it was time to do the mission, he made sure that each and every one of the paratroopers knew both the big picture, but also the tactical objectives.
What you can do: Adaptation has (at its core) a clear, shared mission. You can co-create this central focus during your planning cycle by doing the work to surface three to five core, inviolate principles that will form the thru lines for your plan.
For example, I worked with a firm in the utility space (where decision results reverberate for decades) to assemble one core base case and two “possible” scenarios. Their list included bets on smart resilient restoration, decentralized storage and aggressive use of non-fossil generation. We detailed each of these out (to develop clear and common understanding) and then set some “trip wires” to trigger when senior level discussions would be needed.
#3: When the context shifts, re-group and fight small battles that are directionally correct
What they did: When they were blown off course, they found themselves miles out of position, without their unit leaders, and knowing that the invasion was hours away. (Spoiler alert) Mid-level leaders emerged and the groups reformed in real-time to be amazingly effective at disrupting the enemy forces behind their lines.
What you can do: Preparing your team for the unknown is very different from getting ready for an incremental move in the same direction they were headed. Spend the time to outline two scenarios in addition to the “base case” and work through them to promote agility and flexibility. Avoid arguing which is the “correct” one, because we know that we are in a time where unusual directions are normal.
Instead, spend time on the data, clues and markers that you’ll need to watch to know if it’s scenario one, two or three. Discuss how your tactics will necessarily shift. Training your team in advance to be “noticers” will pay handsomely when the context shifts.
Doing the Work Right Now
Careful process design and preparation can help you get to a much stronger result and a more resilient plan.
Keep in mind, it doesn’t have to consume time to get much more robust results.
My experience with multiple clients is that with good process and pre-work, the insertion of just three, half-day sessions can allow a team to get more cohesive, develop more robust alternatives, and collaborate more effectively on their implementation.
If you’d like to talk about how a fresh approach could help you create a plan to unlock the best of your team during a really challenging time, please reach out to scott@scottpropp.com or put a 20-minute appointment on the books using this link.
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