Planning Assumptions for Challenging Times
Critical to the successful implementation of any business plan are the assumptions upon which the plan is based. In a time of rapid change and profound uncertainty, assumptions take on even greater importance.
Assumptions can help clarify the planners’ understanding of the environment in which the plan will unfold. Sometimes referred to as environmental scanning, the idea here is to discuss, reach consensus on and record what we believe the internal and external operating environment will look like for the planning period. The importance of reliable, credible data sources has never been greater.
Consider the external operating environment. We are coming off a year that saw a global health emergency the impact of which is still being sorted. While there is hope for a return to “normalcy,” what that ultimately looks like is yet to be determined. Which industry segments will recover and at what rate and pace? What will work look like and where will it be done. Are offices as a centralized workplace a thing of the past?
Social and political unrest is widespread and widely reported. What impact will that have on commerce in general and on your business in particular?
Stakeholder demands are being expressed in new ways. Employees, customers, and members of the broader community are accessing social media channels to weigh in on matters of importance to them and, at times, to express their dissatisfaction. Personal and corporate reputations can be threatened seemingly overnight.
With these factors coming together, some might question the relevance of recording planning assumptions and indeed, the very act of planning itself. Astute organizational leaders understand that the opposite is true; building a fast, fluid, flexible plan grounded in robust planning assumptions is their best chance for success.
To get started, group assumptions into several categories. Internal assumptions address our processes, systems, and our people. Will our structures and operating procedures sustain our plans? What investments will be needed in technology, equipment, and people; not just staff additions but training for new skills and capabilities?
External assumptions address several areas including the overall economy, prospects for the industry, interest rates, employment, tax implications, etc.
An often overlooked but needed step is to record assumptions related to our best customers’ industries. Consider segments such as health care, insurance, hospitality and travel, cybersecurity, communication technology. If you are serving major accounts in these and other segments, what are the prospects and challenges they are likely to face in the planning period. How can your products, services, and expertise help?
Effective strategic planning is not about future decisions. It is about the future impact of the decisions we make today. A sound process grounded in deliberate environmental scanning and recording of planning assumptions can point your business in the right direction.
For more information on how strategic planning can help your business, contact me at firstname.lastname@example.org.
Joseph P. Truncale, Ph.D., CAE, is the Founder and Principal of Alexander Joseph Associates, a privately held consultancy specializing in executive business advisory services with clients throughout the graphic communications industry.
Joe spent 30 years with NAPL, including 11 years as President and CEO. He is an adjunct professor at NYU teaching graduate courses in Executive Leadership; Financial Management and Analysis; Finance for Marketing Decisions; and Leadership: The C Suite Perspective. He may be reached at Joe@ajstrategy.com. Phone or text: (201) 394-8160.