Dynamic Planning & Budgeting

Uncertainty. That one word seems to capture what I am hearing from owners of small and medium sized businesses. If the events of September 2001 compressed the planning horizon to one year or less, the past 18 months of economic uncertainty have squished it down to a three months or less. Adaptability and flexibility will be two key concepts in business planning and budgeting for the foreseeable future. We advocate a rolling, five-quarter planning process where adjustments to market place conditions are made in “real time”. The result is organizational agility and speed.

“The economic shock of 2008, and the Great Recession that followed, didn’t just create profound uncertainty over the direction of the global economy. They also shook the confidence of many business leaders in their ability to see the future well enough to take bold action.Here’s the challenge: coping with uncertainty demands more than just the thoughtful analysis generated by these approaches (which, in any event, are rarely employed for all the business decisions where they would be useful). Profound uncertainty also amplifies the importance of making decisions when the time is right—that is to say, at the moment when the fog has lifted enough to make the choice more than a crap shoot, but before things are clear to everyone, including competitors.Everything I’ve been describing flies in the face of management practices that have proven invaluable at many companies for nearly a century. However, fixed annual planning and budget processes are antithetical to timely strategy setting and decision making.” Source: Dynamic management Better decisions in uncertain times – McKinsey Quarterly – Strategy – Strategic Thinking

. Don’t let the uncertainty of the times freeze you in place. If you’re having trouble planning and budgeting, leave a post here or use the Contact Us tab. We can help.

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