Building a Strategic Business Plan in the After Times

building-a-strategic-buisness-planStrategic business planning has always been an organization’s key to finding success. However, when the pandemic hit, strategic plans went out the window. Changing consumption patterns and buyer expectations rendered sales forecasts obsolete and supply chain challenges turned “business as usual” on its head. Businesses pivoted, shifted, and rode the wave eagerly anticipating a “return to normal” that never came.

In the wake of this massive disruption, it has become abundantly clear that the business landscape as we knew it has been permanently changed. How we do business has changed, who we do business with has changed, and the kind of business we do has changed. The long-term planning that companies once relied on to guide their strategic moves was largely put on hold, and continuous re-forecasting served as a tenuous foundation that companies came to rely on for their short-term planning.

A very clear line was drawn to separate what I refer to as “the before times” and “the after times.”

In the after times, rising inflation, inventory concerns, labor shortages, and supply chain pressures all vie for the spotlight as companies weather the onslaught. As each new challenge adds yet another burdensome layer for business owners and CEOs, the companies that withstand these pressures become stronger and more resilient. In a word: antifragile.

Like an old pioneer movie where the weak die off along the journey, companies that did not have the cash reserves, inventory on hand, supply chain versatility, available sales channels, dedicated employees, or any other vital component to succeeding when a disruption or downturn occurs, were not able to overcome the obstacles that the pandemic created and closed their doors. Today’s remaining businesses are the survivors. They are the antifragile – the organizations that thrived in the chaos and came out stronger on the other side.

What is next for these companies? While the worst of the pandemic may be behind us at this point, the coming years will likely still be tumultuous politically, culturally, and economically. Strategic business planning in this new era will determine what the future looks like for these organizations that have already come so far. So, let’s take a look at how to build a strategic business plan in the “after times.”

Battling Inflationary Pressures

Today’s soaring inflation levels are not going away anytime soon. An increase in labor and goods costs as well as environmental policy initiatives are likely going to keep prices on everyday goods high. These increases will continue to challenge even the best strategic planning initiatives by keeping the needle moving on COGS, sales and marketing costs, and business investments alike.

The key to planning through rising inflation numbers is focusing on your most profitable product lines and sales channels to keep the business on track with the least amount of disruption to your overall business goals. This is especially true in industries like manufacturing where margins are much thinner, and inventory is more susceptible to inflation-related profitability swings. Bringing in experienced revenue personnel provides the alignment needed between sales and marketing to handle buyer price sensitivity due to inflationary cost fluctuations.

Overcoming Inventory Anxiety

With a strained global supply chain stockouts have become commonplace. Companies have been battling an inability to get raw materials, keep production running, source packaging for products, and move finished goods. As a result, wait times for high demand goods keep getting pushed out. (If you have tried to buy furniture lately, you understand this all too well!)

Some companies have handled this better than others, likely due in part to how their customers have responded to these wait times. While many organizations have chosen to take these stock issues in stride and communicate as best as possible with their customers, others have developed a sort of inventory anxiety disorder. We are seeing executive leadership at some companies take a “no stock out” approach to their business plans, meaning that they are stockpiling inventory in an attempt to never run out. And while this is certainly a benefit to their customers (because they can get exactly what they want when they want it) it can be a profitability killer. Holding excess inventory is not a shrewd revenue strategy. Instead, companies should focus on diversifying their supply chain to source items from different vendors when needed.

Handling Labor Shortages

The labor market right now is extremely competitive, especially for skilled jobs. However, companies are battling labor shortages at all levels, from manufacturing line workers all the way up to executive leadership roles. With turnover higher than normal due to early retirements, women leaving the workforce, career changes, and job hopping, companies are facing the reality of trying to get the same amount of work done (or more!) with fewer employees to do it and a revolving door of new hires. So, while the coming years may see some Americans return to work after taking a family-related hiatus, the reduction in the workforce due to things like retirements is going to be a permanent change. As a result, employers are doing their best to be flexible with hybrid or fully remote work arrangements and flexible work schedules. However, even these concessions are not always enough to get the personnel they need in the door when they need them. In these instances, business leaders will need to think outside of their traditional hiring framework to keep revenue plans on track amid this ongoing labor shortage.

Companies that are not already doing so will need to welcome technology-related solutions to bolster their workforce. Automation, AI, and robotic processes are being more widely adopted than ever before to fill gaps in human personnel. Where budgets do not allow for heavy tech investment, outsourced roles can provide the support needed to get work done without the in-house staff necessary to do it. Domestic outsourcing is allowing companies to get on-demand access to the kind of experienced personnel that they are finding so difficult to hire full-time.

Waiting Out Supply Chain Woes

When the pandemic hit over two years ago the global supply chain was disrupted so significantly that ripples are still being felt far and wide. The savviest business leaders understand that supply chain issues will be in the forecast for years to come, so “waiting out” these kinds of obstacles is no longer an option. Instead, business leaders need to proactively make the kinds of changes that will keep their organizations profitable and agile to weather whatever is coming next.

We did not get where we are today overnight, which means that the global supply chain will not be “back to normal” anytime soon. In fact, industry experts are speculating that the supply chain challenges we have become accustomed to are likely going to take another 2-3 years to dissipate. With a timeframe like this ahead of us, business leaders are asking themselves:

  • “What should we be doing next?”
  • “How does our 2 or 3-year plan fit into our 5-year plan?”
  • “Is there even any point in doing planning and forecasting anymore?”

The term “pivoting” became in vogue in 2020 but the need to change and adapt has not diminished since. The kneejerk shifts that the pandemic forced in 2020 gave way to sweeping strategic changes in 2021 and 2022 but the need to change has not lessened. Evolving through the continuing supply chain disruptions remains paramount for business success.

Whatever your business, companies from manufacturing to professional services must return to strategic planning with a focus on overcoming the constraints of the “after times”. When you ready to update your plan to reach your business goals, please reach out to me. I will be glad to talk about your revenue goals and help set a strategic path for the coming years.

Topics: Action Plan Revenue Generation Planning Revenue Development Action Plan