Course correction – why Integrated Business Planning is a trusted corporate GPS
18 Mar 2024
Blog
With a record number of elections in 2024 – roughly 76 are expected – and ongoing geopolitical complexity, change this year is inevitable. While unpredictability reigns, trust in governments and companies is in decline.
Indeed, “Rebuilding trust” was the theme of the World Economic Forum’s Annual Meeting in January. And with only 61% of the 32,000+ global respondents trusting business leaders to tell the truth – 2% lower than government leaders – according to Edelman’s 2024 Trust Barometer, this is business critical.
Yet turbulence breeds possibilities amid hazards for prepared organizations with perspective. Integrated Business Planning (IBP) maps coherent courses to strategic goals regardless of conditions.
Leaders always need more visibility into the road ahead. They make educated assumptions about potential forks, dead-ends, and clear passages.
In a 2002 news briefing and responding to a question about the supply of weapons by Iraq to terrorist groups, then-United States defense secretary Donald Rumsfeld famously said: “There are known knows – things we know we know. There are known unknowns – some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.”
Two-and-a-half-decades later, these words, summarized as “you don’t know what you don’t know”, are more pertinent than ever.
Eyes on the end destination
Organizations must set the end destination despite inherent unpredictability, so leaders can form reasonable hypotheses about the coming months and years. We call these assumptions rather than guesses because assumptions imply informed evaluations.
The next step is to assess potential impacts to shape responses. What actions fit which situations? Envisioning scenarios this way steers companies strategically through obscurity.
Of course, perfect accuracy remains impossible. Nevertheless, structured assumptions and predefined responses prepare organizations better than being caught off-guard. Agility and resilience matter more than futilely chasing total certainty.
Nowadays, political upheavals rapidly cascade economic consequences, disrupting multinational operations. Domestic unrest also damages revenues by slowing trade partners.
Therefore, prudent leaders stress-test strategic plans across scenarios. If macroeconomic headwinds strengthen, how might demand decline? What levers can leaders pull to mitigate impacts?
Rather than expecting immunity from volatility, wise leaders target agility, responding to downsides plus upside flexibility, and capturing opportunities. Without structured plans assessing risks and responses, chaos often paralyzes strategic decision-making.
This is where IBP proves invaluable. By systematically incorporating assumptions across functions, organizations internalize external uncertainties into executable strategies. Preparing alternate routes prevents dead-end distress.
IBP – a corporate GPS
Consider IBP processes like a Global Positioning System (GPS) directing organizations toward fixed destinations despite en-route alterations. The endpoints remain constant, but the guidance updates optimal paths around new obstacles.
Corporate strategy sets goals, then IBP charts monthly progress to stay on track or reroute if necessary. Changing conditions prompt course corrections, but the direction persists, unlike panicked teams suddenly losing all sense of direction. The GPS analogy is one we use at Oliver Wight as it resonates with business leaders.
Built-in agility makes integrated planning essential nowadays when there are blind spots around every corner. Extend visibility with radar tracking impacts on strategic end points. Rather than careening reactively, maintain controlled momentum. Adjust speeds and change lanes if helpful, but intentionally keep advancing toward long-term targets.
Multinationals planning expansion into emerging markets need frameworks enabling stability despite global volatility. IBP helps leaders articulate integrated plans amid limited visibility over terrain.
IBP facilitates strategy delivery more than directly shaping strategy itself. It supports coordinated implementation through structured decision stages. These signal current locations, remaining distances, and potential pathways forward when roadblocks emerge.
With robust IBP foundations, companies activate agility to accommodate whatever arises next. Build strategic muscles for flexing rather than ossifying into fragile organizations snapped by winds of change.
Remove fog and trust the compass
Fears about unpredictability often inhibit leaders by overwhelming them with uncertainty about choices. But reliable navigation relies on recognizing next intersections, not distant shores shrouded in fog. Focus on the next stretch of road, not vague final destinations.
Regular IBP processes maintain coherence despite turbulence. The monthly touchstone provides strategic continuity – from political heatwaves to economic blizzards, integrated planning channels corporate energies through uncertainty toward goals.
Bumps in the road are inevitable, but the direction matters more than speed. IBP cannot eliminate external complexity but facilitates responding to changing conditions. Rather than passively accepting volatility, harness it dynamically. Strong vision and values guiding in-built agility help leaders calibrate pace appropriately.
The future cannot be perfectly predicted, but companies can prepare. Wargame scenarios, stress-test assumptions, and map alternative pathways. Embrace tools like IBP that unlock perpetual agility to sail stormy seas toward ambitions.
Even the best compasses cannot replace human judgment. When IBP processes suggest new routes, leaders must still scrutinize critically rather than following blindly. Question the projections but also recognize the power of integrated inputs compared to isolated opinions.
Authentic leaders embrace volatility as an opportunity to forge greatness, not excuse inertia. Progress depends on preparedness to cross challenging terrain. Therefore, tools like IBP are used to chart proactive courses through turbulent waters toward aspirational horizons ahead.
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