Your 2023 plan is wrong

2023 is here, and no doubt, it arrives with much anticipation, hopes, and perhaps fears and will likely involve important choices and even a big bet or two. In many ways, Jan. 1 is no different from any other day.

Yet, for most of us, it is a reset of our focus and scoreboard, so it takes on added meaning with annual planning, budgeting and the like.

Thirty years ago this month, I started my professional career in a Fortune 100 company at a manufacturing facility. I have a distinct memory of my first cubicle farm and walking over one day into our materials requirements planning area where I saw a sign that said: “Failing to plan is planning to fail.” It made a lot of sense given that unit’s role, but it has much broader implications.

I spent much of the last quarter working with company leaders working on budgets and facilitated a handful of strategic plans. I believe in the discipline, thought and energy it takes to do this work well and why it’s important. Still, in most cases, we are faced with the unknown and the “what ifs.” I will often remind leaders that the one thing I can guarantee is that their new plan or budget is wrong. Aghast, leaders will react in ways that one would think I just called their baby ugly. But that’s not it at all.

First, a budget or strategic plan is a statement of priority. It states what leaders view as important — whether something is in or out. It’s also a statement of relative priority among the items that are in. However, it’s not a predictor of outcomes. No one nails a budget to the penny, and our best guess of the timing and sequence of strategy is just that. So, leaders must hold in tension the commitment to the choices they force through these mechanisms and the reality that their forward-looking lenses aren’t foolproof. These disciplines are a starting point and guide to be used as a reference so leaders can measure, monitor and adjust “actual versus plan.”

Second, things can and will change. We know this intuitively and experientially, yet it’s another form of discipline to lead through any number of forces acting on our organizations. These can include macroeconomic factors, changes in personnel, competitive balance, and the like. The trick is to not simply be swayed by these forces but rather adjust as the result of a conscious choice. I used to tell my team that if the plan or budget is a stake in the ground, we’re going to look each other in the eye and agree before we pull it up and move it to a new location. It would be silly to hold onto a plan rendered obsolete by change and call it tenacity. In the same way, it would be irresponsible to ride any wave that comes along and call it agility.

Third, monitoring is a must. Budget performance is easy with monthly and quarterly reviews. Strategic plans are more vulnerable to getting pushed to the back burner. Leaders are charged with looking 10 and three years out and setting an annual plan toward that vision. Still, in recent years, I’ve become a bigger fan of quarterly reviews — and even setting quarterly priorities. EOS disciples know these as “Rocks.” In today’s climate, the 90-day cycle feels like the right balance of dealing with the truly strategic and progress toward longer-term objectives.

Former Secretary of State John Foster Dulles said, “The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year.”  It’s planning that provides the structure and discipline to help make sure that won’t be true, and it’s judgment to know when to flex that plan because it was “wrong.”

Chuck Hyde is the founder of C3 Advisors, a firm focused on executive development and talent optimization. He can be reached at www.c3adv.com. The opinions expressed are those of the author.