Planning in Uncertain Times

May 13, 2020

Planning in Uncertain Times.

Situations like Covid19 make planning difficult but not impossible. There is no point of reference or historical roadmap for this. We have never seen such a widespread and rapid shutdown.

So what to do? The future is unclear however not planning for various scenarios will create further challenges for your organization. Waiting for absolutes in times of chaos is both futile and dangerous. In practical terms if you wait until clarity for re-opening you run the risk of being behind your competition. You might then be engaged in potentially competing for limited resources. This might range from staff, gloves, masks, plexiglas, PPE, etc.

This is not limited to the re-opening only.

Most industries have been impacted negatively. The ripple effect of each industry segment into each other will be a unique experience to lead through.

When there is no reference point to start from, an organization must create one.

I suggest three actions.

  • Clarity
  • Understand your Mission. You must know your organizational purpose as all core decisions should come from this base.
  • Preparation
  • Research macro market information from credible sources. In Atlantic Canada utilise the Atlantic Provinces Economic Council (https://www.apec-econ.ca) Covid19 impact presentation. Communicate with associations and other organizations.
  • Project
  • The purpose is to cover broad possibilities to what may happen based on your information instincts and experience. This will be used to pivot direction as more information becomes available. Note forecasting is broad strokes in this case as too much detail has is not an efficient use of time.

Use 3 scenarios to cover as broad an area as possible.

Worst case scenario – give yourself permission to think negatively. Most leaders are glass half full people. Examining the worse case is necessary so that you avoid being blindsided by optimism. If lacking information speculate by using what you have or the place you are in to forecast forward. i.e. shutdown zero revenue – what are fixed expenses to determine break- even point, partial shutdown i.e. 40% of previous year etc. Straight line it. What does it look like?

Best case scenario – this is not a pie in the sky exercise. We know everyone has been hit to some degree. However if you can recover your loss in Q3 & Q4 you need to provide details of how and when you will accomplish this.

Middle of the road – like it sounds. In between best and worst, accounting for seasonality impact.

Forecasting provides a pathway for future decisions. Planning during the re-opening phase will place you behind your competitors and potentially threaten your recovery. Planning allows you a pivot point to adjust with new information.

Utilise the three scenarios focusing on the 4 segments below:

Revenue – 3 scenarios – Best, worst, in between

Staffing / volunteers – how many staff/volunteers are required for each scenario?

Expenses – what are fixed costs that must be paid, what percentage are your variable expenses to revenue?

Timelines – what future things normally impact your business seasonally?

Ensure you capture and record all of your assumptions.

Launch and review.

Once you determine the 3 scenarios, begin to move forward watching carefully as new information becomes available, pivoting as required to take advantage of opportunities or avoiding challenges.

Review your assumptions continuously at first. Many may be incorrect. Adjust and move forward.

Continually cycling through this process will provide you with the best available map in these uncertain times.

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