2022 the year to create the new normal
The first month is already in the past, and our festive season breaks are already long forgotten. Our current business plans are in their final stages of delivering, and the next cycle is about to start again.
Getting back into this year’s morning routine made me realise that traffic is much less than pre-Covid, although not less frustrating. Leaving me with a thought that maybe this is the new normal and that things are settling down. Hopefully, the pandemic will soon be downgraded to an endemic, as speculated in the media. But the uncertainty remains in our midst, and we do not know what this year will hold in stock for us. There are concerns about the Omnicron variant, the unstable electricity supply, job shortage, the poor economic outlook and an interest rate increase on the cards. This is prevalent in the South African Business Confidence index, which remains below neutral due to the threats caused by load shedding risks, inflationary pressures and increasing supply chain issues.
This raises the question of what it means for your business, and are you ready to deal with these uncertainties and challenges?
Many bigger organisations and businesses may soon start their annual strategy, business planning and budgeting cycles as engrained in their yearly routines. So let’s look at some essential aspects when you prepare for the new financial year ahead.
8 Actions to help you to develop your business plan for the new financial year
It is always essential to take some time out to work on your business and not only within your company. Your business plan for the next financial year is a crucial tool that allows you to take this timeout to work on your business.
For smaller businesses, this may be a challenge in itself due to all the other pressures. But, hopefully, everybody is energised, and their creative juices are running to tackle these vital business planning tasks.
I want to propose eight actions that may assist in better preparing for this uncertain year ahead.
1. Reminding yourself of your business purpose
As always, it is essential to remind oneself of “Why” you do what you do. “Why” your business exists (the purpose) and what you would like to achieve in your company. It is important to visualise what that future will look like and capture it in your vision statement. The business plan needs to reflect this and realise the vision.
2. Goal setting
Because a vision is a grandiose picture of the future of the business, it may seem impossible to make it happen. For this reason, one needs to break it down and determine a maximum of three goals to achieve in the next business cycle. It is important to note that these goals are not set in stone but needs to be constantly reviewed and shaped to accommodate the rapid changes we all experience. Therefore, it is good practice to review and refine each goal after every one of the remaining steps. One must, however, caution that you do not veer, of course, any changes must still support the business purpose and vision.
3. SWOT
Next on the agenda is to assess and understand the current reality by doing a SWOT analysis. It is crucial to spend enough time and energy on the SWOT because it will assist you and your team evaluate your business critically.
4. Risk assessment
Once the SWOT is complete, it is helpful to do a risk assessment, highlighting some critical areas that may need focus. It is always a good idea to analyse each risk and classify them in terms of severity and impact. When one understands the risks and the mitigation actions, the next step will be to set priorities for the year.
5. Setting priorities
A good approach to set priorities is to evaluate and use the material produced thus far to determine the most important and critical things that need to happen and the order and timing of when they need to be realised. It is vital to concretise these deliverables as much as possible. It is tough to manage and adapt quickly if you can not measure progress.
6. Developing the plan
The plan is probably the most critical part of the whole process. Unfortunately, it is also the place where everything goes wrong. If the planning is not done properly, one can be sure you will not achieve what you set out to do. In project management, we have a saying that “Downstream problems are created by upstream neglect”.
Einstein was quoted as having said, “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”
We tend to rush the planning process rather than spend more time determining what needs to be done when it needs to happen and what cost and quality should be associated with the deliverables.
7. Implementing and tracking progress against the plan
The implementation step is where the rubber hits the road. It is also critical because nothing gets delivered if not measured and reviewed. This part can also not be outsourced; the most senior people in the organisation need to be actively involved during this step.
I have seen too many times where implementation was delegated to the next level that much less was delivered than initially planned. Three essential components are required to be able to deliver on the plans. Firstly is having the right people involved, secondly is establishing and maintaining a regular drumbeat and lastly is tracking and attending to the right metrics.
It is here where all the heavy lifting is done. It is here where the team needs to be encouraged and supported. Here, the team needs to make decisions to ensure the business remains on track to deliver on the goals previously set.
8. Celebrating success
Lastly, a very important step that gets neglected in most instances. It is the closing out and celebrating phase. During this step, the organisational memory gets refreshed and updated through lessons learnt and celebrating the successes achieved. It is critical to give rewards and recognition to those who deliver. It creates and maintains the energy and motivation to tackle even bigger goals during the next business cycle.
I wish this quick refresher will assist you and your business on the path to concern 2022.
Let me know if this article was helpful or require any more details about any of the above.
May your goals and vision for your business be realised as planned.
Regards
Daniel
Sources consulted: