Planning for 2021 Requires a New (And Potentially Better) Approach

By John Mills, Chief Administrative Officer, Kibo

The patterns that have dictated sales cycles and budget plans have been wildly disrupted in 2020. Employees have started working remotely, budgets have tightened and the future is uncertain.

The thought of 2021 budget planning in this environment can be daunting. Macro-economic factors like unemployment and the recession make it hard to know how much consumers will spend. Macro-health questions about future treatments and vaccines make it even harder to know if consumers will be free to get back to normal. Permanent shifts in online behavior such as remote work, touchless payments, and mobile commerce have accelerated by five years or more. The only thing that is certain about next year is that it will look nothing like 2019.

To plan in such a situation requires us to change our perspective. We normally look out to the middle-distance. Here we are in October, working on a plan that focuses on January-December next year. In a normal planning cycle, we could assume that those 12 months would follow the same general trajectory as the most recent corresponding 12 months. Planning for the middle-distance based on previous years is no longer an option. So instead, we need to look into the near- and far-distance instead.

Time to Work Backwards in Your Planning Cycle

There’s an old adage that asks…

What is the best time to plant a tree? Ten years ago. What is the second best time to plant a tree? Today.

If plans were not already in place in your organization to create dramatic improvements in online capabilities, to be flexible and nimble (i.e. planting a tree ten years ago,) then now is a good time to start.

In many companies, the reassuring habit of planning for the middle-distance can actually stifle innovation and change. Now is the time to plant a tree, and so it’s important to think in “tree” time, which is calculated in years, not months. Take advantage of the disruption COVID-19 has created to scrutinize your operations today and plan for 2023 and beyond with big goals that the whole team can rally behind.

Get your team together and state up front that this planning cycle will be different. Discard the typically siloed approach, where teams jockey for control and nickel and dime their budgets. Instead, brainstorm together what 2023 should look like:

• What percentage of your business will be online?
• What channels will drive the most business?
• What products and services will you be offering?
• Will you expand to new markets?
• What will your technology need to look like to support your plan?
• How will your logistics support this growth?
• What will your team need to look like to support your customers?
• What technology accelerated in the last 6 months that you should adopt?

When the team agrees on a 2023 vision, then you can work backwards, determining the roadmap that you’ll need to follow in order to achieve your vision. It’s possible that hard choices will have to be made, trees will need to be planted, and near-term projects or legacy lines of business will have to be sacrificed in order to focus on the long-term goals. You might realize you’ll need to kick off an RFP process to onramp new vendors and service providers to start building to support your vision.

Create a “backwards” checklist, one that starts with your vision at the top and then highlights the actions and milestones the company would need to reach in each quarter working back to today.  Here is a hypothetical example of a checklist that can be completed together as a team:

Once the leadership team has this shared vision in place, then individual team leaders can take these larger goals and apply them to their own checklist, which can drive the strategy for their individual teams.

This will likely be a “Who moved my cheese” moment for some people, as 2023 goals could require major changes in the near term—to free up resources, and set the company on the path to achieve the vision. But, it will be worth it. Rather than letting the uncertainty restrict your company, you can let the uncertainty free your company to innovate.

Don’t get to 2023 wishing you had planted a tree.

Layer In the Near-Term View

Of course, everyone still wants to know, “What will Q4 be like?” This is where near-term data comes in. It will not look like last Q4. But, we can use very recent data to understand what percentage shift from normal trends we can expect in the near term and model forward with scenario planning. We can take in recent trend data from experts in our field to round out our view, and survey clients to understand how their budgets and buying strategies have shifted. All of these near-term insights can help shape our projections more effectively.

For Kibo, near-term data has shown us that our clients have shifted toward features that allow them to serve customers across channels with agility. We’re also seeing an increased interest in personalization so that our clients can address individuals and segments of their customer base with relevant information. These insights are helping us create Q4 sales and product plans that we are layering into our “backwards 2023” strategy.

Using near-term data, do a health check each quarter to see how close you are to achieving your 2023 goals. Determine if your resource allocation is still what you thought it would be. New near-term issues will pop up, and your 2023 checklist should be nearby in order to keep everyone on track, balancing what will matter most for the long term with what is needed today.

Our team has embraced the 2023 perspective, and we have some ambitious goals set that have reinvigorated us to work for the future. We are planting some trees so they can fruit in 2023.  I would love to hear more about your own plans, and how the “backwards” planning cycle has changed your perspective, too.