How to build a culture of Continuous Planning in your business
- With change all around us, businesses need continuous planning like never before. Planful CEO Grant Halloran sets out 3 pillars of success
The world is in a hyper-state of change. Industries are being disrupted and then disrupted again by a spectrum of influences from brilliant innovation to exogenous events that affect global economic activity. Think back to January — as relatively recent experience shows, even in a robust economy with expanding opportunities, companies found it challenging to keep pace with fast-moving market trends and accelerated business cycles.
Then the COVID-19 crisis emerged, setting off a once-in-a-century public health emergency and hitting the economy with an unexpected shock. No one saw it coming. The health risks are rightly the top priority, but the economic effect is also significant. Some companies shut down or temporarily shuttered, while others are experiencing unprecedented surges in demand. Others remain in an indefinite holding pattern.
On the business side of the ledger, the COVID-19 pandemic has shone a bright spotlight on the need for modernized planning and decision-making in the cloud. Finance leaders need to have a vision, framework, and tools to aggregate accurate, real-time data from department leaders across the organization to surface insights, model scenarios, test levers, and make decisions quickly. As a result, FP&A teams can then lead the way for a new finance culture, reframing their approach to planning, creating game-changing efficiencies, and elevating the financial IQ of the organization with a Continuous Planning framework.
What is Continuous Planning?
Continuous Planning flows from a simple concept. Business is continuous, so planning should be too. Fully realized, Continuous Planning is a modern approach for financial planning and decision-making in business — it's both a vision and a culture. It recognizes that business plans are disrupted constantly by changes in market conditions, and with companies now needing to course correct weekly or even hourly, remaining agile and flexible is critical.
A Continuous Planning approach allows companies to optimize business performance as conditions change. COVID-19 has been a huge eye-opener for executives. It's become apparent that what business leaders thought they had control over can be completely outweighed by uncontrollable factors. FP&A teams recognize this and understand that it's hard to make confident decisions. In their role as strategic advisors to the C-suite, FP&A professionals need to be ready to assess a range of scenarios and course-correct more often, assuming most decisions will be somewhat off the mark. This means they need to be more incremental in the way they plan, making their approach inherently agile and providing for course correction before they go too far down a path.
But without enabling technology, it's difficult to gain access to all of the relevant data residing in business units across the company, which often live in siloed spreadsheets. Further, it's hard for Finance leaders to collaborate with budget owners without a single source of truth on a common platform that everyone can access and use together.
Building a Continuous Planning culture
A Continuous Planning culture requires a vision, framework, and technology to enable faster, better planning and decision-making. To fully reap the benefits of Continuous Planning, companies need to focus on these pillars.
- Compressing cycle times with a cloud-based, Continuous Planning platform happens by automating routine, traditionally time-consuming tasks. It's accelerating the financial close by distributing actuals and key feedback to the business faster. This enables immediate, frequent interactions with the most current data, providing for actionable insights that inform pivots and reforecasting. As you compress cycle times, structured planning owned by the Finance team becomes a more frequent and faster process. Finance leaders are also driving operational Dynamic Planning that is connected and collaborative across all budget owners. Now, action and execution cycles have sped up, empowering the business to be agile and course-correct immediately, as business conditions change. That's a critical business advantage, especially in today's economic environment.
Planful customer LT Apparel, a supplier of owned and licensed brands of children's clothing with relationships with more than 1,800 local and national outlets, is in the notoriously fickle fashion industry. With a technology-enabled Continuous Planning approach, LT Apparel's FP&A team can quickly model various 'what-if' scenarios to see how factors impact the forecast and make course corrections quickly.
- Expanding to every corner of your business is a vital pillar of Continuous Planning. FP&A teams need to look beyond their own core and operational needs, and drive planning outside the office of the CFO. When this happens, finance becomes the strategic advisor to the rest of the business and can help elevate the Financial IQ of the organization allowing it to operate more nimbly, with faster decision making.
The Boston Red Sox, an American professional baseball team, use the platform in every pocket of its business, from the head groundskeeper who plans out supplies to the marketing department that needs to adjust its plans accordingly to an online world. It provides the structured financial planning and reporting capabilities finance needs, while automating planning activities across the organization — giving the FP&A team control, consistency, and confidence.
- Collaboration and connection can bring Continuous Planning all together. Planning and decision-making doesn't happen in a vacuum. Rather, it's a collaborative effort that requires input, expertise, and engagement from the leaders and experts in every corner of the business. However, Finance and their business counterparts tend to operate at different levels of data and are focused on isolated objectives and timelines, which adds to the breakdown in communication and collaboration. Breaking down these silos requires Finance to take the lead on operational planning processes and connecting data silos, so that the whole organization is working together from the same plan and truly able to leverage company-wide information to create scenarios for all eventualities.
Planar, a multinational digital display manufacturing company with operating units worldwide, uses its cloud-based planning platform to manage its monthly forecasting and financial reporting process. With an intuitive Continuous Planning platform that offers global templates, the team can roll up multiple forecasts in one place, and everyone has access to the same accurate, current data so they can collaborate at a moments notice.
This pandemic highlighted that the things we thought we had control over are often overtaken by things we can't control. That was true before the pandemic, it's true now, and it will certainly be true when the danger of COVID-19 has passed. Change is the only constant in business — it should be welcomed, not feared. Continuous Planning equips FP&A teams with the tools they need to confidently handle change by compressing cycle times, connecting with colleagues throughout the organization, and collaborating effectively. In that way, companies with a Continuous Planning culture achieve the agility required to thrive in any economic climate.