8APRIL 2024OPINIONIN MYPLANNING IN TIMES OF UNCERTAINTYIf you don't know where you're going, any road will take you there. A good plan starts with a vision that is articulated into a good story. This vision is going to define your purpose and where you're going. So, it's important that you know where you want to go before you start defining how to get there.After you've defined the strategic vision, the next step is translating what that means into financial language. It's at this stage where you start peeling back the layers and determining whether the strategy is aspirational enough, achievable, and/or believable. Many companies start this process with a long-range plan, which can be a misnomer since some plans only span 3 to 5 years. Oftentimes, these plans kick off the process of developing the following year's budget. In other instances, this process coincides with the annual budgeting process, so that the first year of your long-range plan starts with next year's annual budget.So, you've defined your strategy, translated that into a financial long-range plan, and published your next fiscal year budget. You get into the new year, and your actuals don't match your plan because either your performance staggers or doesn't drive the results you expected. There are a handful of recommendations I would give you for planning in times of uncertainty:1. Stick to your timelines and processesWhen things go awry, we sometimes have a knee-jerk reaction to completely change how we do things. My advice is to stick to your process. If you review your current quarter's outlook weekly, continue to do so. If you do a quarterly update to your plan, continue updating your plan quarterly. You may be tempted to forego the process to focus on "more important things" or because you're "too busy." In these times of uncertainty, you should stick to your process of gathering information and assessing your trajectory.It's also at these times that you and others may be hampered by indecision. There is always at least one group that just needs one more day, week, month, or quarter to gather more information and give you the "right" answer. The thought of giving a number that will be wrong and to which they'll be held completely shuts them down. At the end of the day, we have to make the best decision with the information we have, put our pencils down, and move on. A boss of mine used to say, "I don't know what the right number is, but I know it's not that one." Mike Tyson also said it eloquently, "Everyone has a plan until they get punched in the mouth." No plan will be perfect, so that brings me to my next suggestion.2. Update your plan when you have new informationWhen you have new information, you should update your plan. If you get into the new year and your actual performance differs drastically from your plan, you need to do an update (I know, "duh," right?). Many companies reforecast their plans at least quarterly. (If that's the case at your company, see suggestion #1.) The most important thing here is that your company must have a culture of transparency where departments can be truthful about results. I worked for a company where we completed quarterly forecasts for the full year. We stopped doing a Q1 forecast because no one ever changed their full-year guidance. We could be missing sales by a mile, but somehow, we were going to claw our way out of By Charlie House, Director, International Finance, AutozoneCharlie House
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