Planning for a Better 2021
For many businesses, the planning process for 2021 is more dependent on the quality and accuracy of underlying assumptions than it has been in the recent past.
While even the most pessimistic among us are looking to a year that will be (almost, must be?) better than 2020, the operating environment continues as one full of questions and apprehension.
How much will 2021 look like the last three quarters of 2020? Will economic conditions begin to rebound by the end of the first quarter? The second quarter? By mid-year? Longer?
Major business segments, particularly those reliant on travel, transit, hospitality, and leisure are looking to rebound but at what rate and pace? How many of the behavioral changes made by consumers this year will carry over into 2021 and beyond? Will the rollout of the vaccines have the desired impact on curbing the COVID 19 pandemic? To what extent and over what period of time?
Still more changes await in the form of a new administration taking charge during a time of political and social discord.
Even in “normal times,” recording underlying assumptions is usually one of the more robust segments of the strategic planning process. Assessments of trends in the external and internal operating environments can surface all manner of concerns, ideas, and opinions.
Given the extraordinary impact of 2020, the question arises as to whether this has become, for now anyway, a wasted exercise. With so much uncertainty ahead, how can we rightly and accurately record planning assumptions?
In his best-selling book “Stumbling on Happiness,” Harvard professor Daniel Gilbert makes the point that most of us imagine the future looking much like the past. Intellectually of course, we know better. However, our subconscious relies on what is familiar when we think of what is to come. Being aware of this phenomenon is helpful yet it remains a difficult habit to break.
So how best to record assumptions about the 2021 operating year? Start with the knowledge that being fast, fluid, and able to anticipate and react quickly to a rapidly changing set of circumstances is a worthy organizational competency that will serve your stakeholders well.
Make it a priority to pay close attention to trusted, reliable, and valid sources of information and business trends. One such source is my friend and colleague Andrew Paparozzi. Watch for and share with your team his take on macro-economic trends in the business environment and their likely impact on the graphic communications business. To the extent you can, seek out similar sources in the business segments represented by your most significant customer accounts.
It can be helpful to frame assumptions into three general categories: What we know (fact-based), what we think we know (based mostly on deductive reasoning), and how we feel (our hopes, fears, likes, dislikes, and concerns).
At a time of rapid change and concern, planning assumptions can take on a higher level of importance. For more information on ways to think about the future of your business, contact me at email@example.com.
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.