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Look, Listen and Reforecast
Before the start of each fiscal year, some companies will put together a strategic plan, followed by a financial plan or budget. Often we think our work is done, but what happens? The year starts and parts of your plan are DOA. People, products, customers, and technology have changed. When you're faced with changes like these, you need to examine what's in the plan, and course correct as necessary.
It will pay huge dividends to go back and look at your industry assessment. This is where you gather data that will help you understand the industry's long term growth opportunities. Take a look at the volume growth rate, competitor mix, rate that technology is changing, and customer value adds that will put you over the top. When you are faced with a new opportunity, these items can be a good funnel to help you decide go forward strategy.
Next, check the competitive assessment. Study and understand business relationships, product line breadth, customer requirements, and market share data (if you can get it). Make sure you are talking to your customers, and if applicable, your distributors. Listening and learning approaches can be different by product and area, but they will assist you with buying trends, new product and service opportunities, quality levels, and their willingness to recommend your products to others.
The decisions that you make to address changes in your industry and competition have a financial impact that must be understood. The primary benefit of having a solid strategic plan is that you can better position your organization to reap financial benefits or protect your current financial position. To quantify the financial impact of the response you make to changes in the industry and competition, a reforecast exercise tells you how your new initiatives or actions will improve or hurt financial results. It's not necessary to prepare an entirely new financial plan.
It's better to complete the reforecast exercise and understand the financial impact of changes that you will make to respond to the marketplace volatility. It will keep your financial results healthy and enable you to move forward with confidence.
You're becoming more agile! You've done the work already. You know the industry, the competition, and you've developed resource plans based on this core set of assumptions. Once you see a new opportunity, it won't take much to tweak the numbers, and you will be well positioned for a successful, rapid response.
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