9APRIL 2024PLANNING IN TIMES OF UNCERTAINTYthat hole by the end of the year (normally, sales just got peanut butter spread over the remaining periods of the year). The expectation from our executive committee was that the business would cover any sales or SG&A miss in the plan, so there wasn't that trust or transparency to give a factual, updated forecast. You need a mechanism for giving the best estimate and telling the story of what is happening so your executive committee can make the best decisions possible. How you get to those updates can take many different forms. 3. Technology is an enabler but it won't solve your problemsa.I see a lot of comments and questions about how technology can change the way we plan. Don't get me wrong, I'm a big advocate for having systems to help do the work. The distinction I would make here is that technology should be viewed as an enabler and not as a replacement for finance professionals doing great work. Having complex planning systems also may not be an option because of expense and infrastructure. I'm a fan of keeping it simple. There isn't a company I know of that doesn't utilize Excel in some form or fashion to do their planning. Implementing structured, repeatable processes, and having a culture of trust and transparency are way more important than the systems you use. Technology will absolutely make your work more efficient and can enable you to make richer, deeper analyses; however, I have yet to see a system that can spit out a perfect plan with the press of a button. You will still need finance partners embedded in your business actually talking to their business partners to glean insights to help craft the story on what the future may hold.4. Every good planner has a contingencya. My last recommendation is that every good planner needs to have a contingency. Despite your business partners' and/or finance teams' best efforts, you will get a final plan that doesn't quite hit the target. They possibly turned in a sales plan with 15 percent growth in a mature market with established competitors that are only growing 2 percent. Or, you may find the plan calls for a 65 percent increase in hiring for very specialized positions in a tight labor market. The end product you get might not have enough stretch or be a bit too rosy. Depending on the disconnect and the timing, it may not make sense to go back to each group and parse out a target for them to build back into their budgets. The size and scale of your company will also determine the materiality of your contingency. This may be a $500k plug in Miscellaneous Expenses or a $100 million contingency in Capital Expenditures. In either situation, you need a contingency that gets you back to your expected target and can mitigate uncertainty.In summary, planning in times of uncertainty can be stressful. To navigate your way through it, you should stick to your process, update your plan when new information arises, utilize technology as an enabler and not a substitute for human interaction, and always keep a contingency. You need a mechanism for giving the best estimate and telling the story of what is happening, so your executive committee can make the best decisions possible
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