What’s the Plan Then?

“The best laid schemes o’mice and men gang aft a-gley” said the famously wise Jewish Scottish poet Rabbi Burns. For the non Rabbinnic Caledonians it means shit happens or more politely, your best laid plans often go astray. And yet I bet most of you are knee deep in it – planning that is, not manure. For it is that season – the planning season. That time of year when earnest brand managers everywhere are busy finalizing their marketing plans, and supporting budget, for next year without even knowing exactly how this year will turn out. It can be like shepherding – dark and lonely work but someone has to do it. The business needs a plan, how else can it function as a well -integrated, coordinated team; how can the CFO make accurate predictions on shareholder returns; how can HR calculate the bonus pot; how can manufacturing plan their Capex?

Everyone knows it’s a thumb-suck, everyone knows that an annual plan is an arbitrary planning period geared to shareholders not the natural ebbs and flows of markets where short term can mean a few weeks and the long term should be thought of as several years. So we compensate with FUF, SUF and TUF – first updated forecast, second updated forecast etc – and the better businesses simultaneously update their rolling long term plans, typically 3 years.

Since most see themselves as marketing businesses, which amongst other things mean they try to make what they can sell not sell what they can make (profitably), the heart of the annual business plan is the marketing plan. It should be a market/consumer centric plan not a finance/manufacturing/distribution centric plan. In reality it is an iterative plan. It iterates between functions – “You might very well think that’s what you can sell laddie/lassie but this is what we can produce so go homewards to think again” (for some reason I am convinced all production people are Scottish). “Listen lad, we will not be committing ‘owt more t’city than a 6% increase in EPS so trim your bloody budget” (and all CFO’s are from Yorkshire). As the last point shows the annual plan also iterates from the top down, from the bottom up and then top down again. The boss/CFO gives an indication of what they would see as a good result for next year. Sales and Marketing work upwards from every piece of marketing data and distribution outlet to show what might be achievable, they haggle a bit and then the boss sets the target and the plans are constructed within this parameter. Or something like that.

The Annual Plan is then written up (many of you will be busy doing that right now so how come you have time to read this?). It is presented to the higher bodies (Global normally has a voice in a multi-national matrix organization). It is tweaked, plumped and trimmed until lastly it is signed off. And there it is until FUF, SUF or until manure happens. I say manure because manure can produce higher than expected growth or a worse than expected smell.
Beyond mere topicality – ‘tis the planning season – I highlight all this because I see the annual plan as potentially the enemy of good marketing. It really is an unhelpful time period for most businesses other than agriculture, which is indeed governed by the annual seasons. A year is neither short enough nor long enough to encourage the right marketing reflexes. A rigid budget can stifle innovation – ideas do not work to a timetable. It is fine to have a well thought through game plan, just as the good sports team do, but you have to have the flexibility to move swiftly to Plan B or C or even some totally new plan depending on what works and what doesn’t.

I’d love to see marketing plans that leave a third of the budget uncommitted – some real wriggle room with which to seize the initiative. But apparently finance won’t let you. As it happens, I’m not sure I believe that. I think the problem lies in the lack of predictability or measurability of marketing and I think it might change in the future. It already has in some areas of digital marketing. Pay Per Click campaigns are the best example where the budget is deployed on a “learn fast fail cheap” basis that allows for more budget to be generated for campaigns where the ROI proves to be best.
Something to ponder while you knock out the spread-sheets and power points for next year’s plan. See if you can find ways to exploit the fact the plan will surely go astray. Be bold, ask for some wriggle room, commit to some stretch targets that can justify the release of more budget. Think about how to integrate experimentation and ROI.

Come on – are you a man or a mouse?

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