The Planning Graveyard: Beware The Tombstones

Blog post by Deb Dietz

In the first blog post in our Strategic Planning Checklist series, we spoke about the importance of analysis, the critical first step in the planning process.  We shared that investing your time in analysis should precede jumping into Plan Formulation, Action Planning, Execution, and Continuous Improvement.  

But before you can go through all the planning steps and follow these checklists, there is a fundamental need for any organization.  That need requires the development of a planning process.  Without a process, you may find yourself heading towards your demise, so here are some ideas for avoiding the tombstones along your planning path.

• Do not go into your planning process with the thinking that all you need to do is take last year’s plan or actual numbers and add some modest percentage increase. Avoid the “we should be able to do 3%V over prior/plan - that seems reasonable”.  Without analysis, the first step in the process, you’ll never know what your growth potential is so that you can realistically forecast demand and thus, revenue.
• As consultants, we’ve heard some interesting comments and fielded many questions about planning and sales forecasting. We’ve even been asked, “What are the Excel formulas you work with most?”  This is the wrong question to be asking.  You need to be following the Strategic Planning Checklist – Analysis  to get your arms around the bigger question; where are your opportunities for growth, what are your strengths and weaknesses as an organization, how can you overcome the challenges your company is facing, and how can you add value and maintain your relevancy to your customers.  The answers to these questions will get you where you need to go.  Asking questions about Excel formulas is missing the point.
• Avoid Incremental Expense with Low Yield - When revenues/sales are below plan, do not automatically send out more emails or other marketing communication campaigns. Pushing out emails without a targeted, segmented, marketing strategy (which is an outcome of the planning process), will result in incremental expense which may not always result in incremental sales revenue.  You must uncover the root cause for the underperforming results. 
• Do not assume you understand what your customers want or need. If you haven’t invested in market or customer research lately, consider making an investment in your future.  If you continue to offer products, programs and services that underperform financially, your best bet is to conduct research, then portfolio analysis.  You need to maintain your relevancy with your customers and provide a portfolio that they see value in and will willingly pay for. 
• Consider Strategic Marketing. Not just Marketing Communications.  What is the benefit of communicating a value proposition that is not relevant, has limited value or competitive advantage, that involves significant marketing expense, and that won’t give you the revenue growth or return on investment you need? 
• Portfolio Management. A significant undertaking yes, but involves marketing and financial analysis.  Before you spend on marketing campaigns, have a firm understanding of the value of your organization, what communication channels you need to leverage and how you speak or message about your customer value.  Ensure that you are offering the right value, through the right channel, using the right message, to the right audience.  Database segmentation, targeting and portfolio alignment – accomplished via analysis.  This effort will also help you identify which products you should eliminate from your portfolio.  Consider the benefit of no longer investing in under performing products and redeploying those investment dollars towards other products that are more important to your customers.
• Developing new products. Use a formal process.  In order to identify which products you should actually develop, you need to go through a business case analysis to determine which new product ideas are the best ones to fund.  Not all new product ideas are created equal.
• Cutting expenses. We’ve all been there.  You’re not achieving your revenue goals.  You’ve conducted more marketing campaigns and spent more money with the end result not achieving your goal.  Before you start looking at where you can cut expense via staff reductions or marketing expense budgets, go through the analysis checklist so that you can identify where your investments can have the greatest positive impact. 

Get the right information to make the right decisions. Do not base the future of your company on what you think you know.  Make your decisions data-driven, fact-based and analytically sound.  "Analysis will help you avoid the tombstones and keep you out of the planning graveyard."