We live in uncertain times, and people talk about all sorts of planning. But, as someone once said, “if you want to give the gods a real belly laugh, just make a plan!” How valuable is it, then, to make plans? Are there different types of plans?
Strategic planning often seems to mean that a company or business owner examines the future based on today’s variables. Depending on worst, best, and likely case analyses, the planner then develops a cause and response plan. This type of planning differs from tactical planning in that it usually goes out farther into the future. Tactical planning tends to be more about “how” will we do something. Strategic planning is more toward “what if” something happens.
That being said, we also see plenty of examples of long-range plans failing to take into account some unexamined event. In fact, one example is where the company has contingencies in place for twenty different problems, never expecting that all twenty events will take place simultaneously. Problems and crises have a way of coming in bunches, making planning more of an art than a science.
So what’s a person to do? Should we never bother to consider possible problems and disasters? What about considering success beyond all expectations, as with an exponentially larger number of orders or clients? Do we make plans, cross our fingers, and simply hope for the best?
Consider the entire concept of planning: At its foundation, a plan is a way to adapt to future circumstances. We can say that the better someone is at adaptation, the more successful their plans. To develop a comprehensive set of plans, one would need to be omniscient and clairvoyant. But to be skilled at adaptation requires only ordinary human capabilities, and requires much less specific planning.
An important part of adaptation is flexibility in processes. Yet many business owners don’t have a solid grasp on all the processes taking place in their business. In fact, many business owners and executives don’t actually know the key processes and critical dependencies of their core business. If that’s the case, then strategic planning ends up being more like a shotgun blast of plans, with no particular organization.
Knowing how to adapt, and making the business highly responsive to changing circumstances is a better way to prepare for the future. Explorers throughout history didn’t know what they would encounter in new places, but they did know how to survive, how to adapt, and how to quickly assess entirely new events. Along with strategic planning, why not have a rapid-response team in place?
To better prepare for the future, it makes sense to first lay out the many processes involved in the current business. Then determine the most critical processes and what they depend on outside the company’s control. But instead of devoting full attention to setting up contingencies for failures in the dependency chain, examine how quickly each process and its function can be entirely changed.
Think about the process of setting up an order from China. The process begins with inventory management, which in turn causes an order to be generated. The critical dependencies include transportation systems, remote politics, and raw materials. Rather than developing a contingency for transportation failure (e.g., a ship sinking), a local war, or a factory burning down (taking with it all the raw materials in stock), how can this process be dramatically changed?
Suppose all three events take place at the same time—war delays the ship leaving port; an explosion destroys the factory; then, even partially loaded, the ship sinks in the Pacific. If contingency plans are in place, what happens if the necessities for those contingencies also fail?
How quickly can the source for orders be fundamentally shifted from China to another country? It isn’t important which country; it’s important to know how quickly the process can be changed. Is it possible to redirect the entire order process, perhaps setting up an immediate delay notification to all waiting customers?
Substitution is an adaptation process, and it’s been around for a long time. Rain checks are a form of substitution. Regardless of what part of a process fails, or if it goes down completely, the adaptive response is to offer a substitution. That’s not the same thing as having a specific backup product or service stockpiled as a contingency. We don’t yet know what we’ll substitute, but we know that we can come up with a substitution quickly.
Contingency planning assigns a specific response to a particular event or circumstance. Strategic planning examines possible events or circumstances that might require contingencies. But process analysis with adaptation capabilities in mind is a third option. People don’t succeed because they know how to do everything; they succeed because they know how to change and adapt to circumstances, taking advantage of evolving opportunities.
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Guest post by my friend: Craig Landes of Batavia IL, USA
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Ric Willmot
Improving Organisational Performance
Providing Strategy Consulting & Mentoring
