Businesses are shortening their planning cycle during a pandemic
A learning that leaders have embedded deep in their collective consciousness is that unpredictability is here to stay and one has no choice but to navigate the business through such obstacles. Frequent adjustments to planning cycles were necessary in a “Bani” world – fragile, anxious, non-linear, incomprehensible. With rolling forecasts now the norm, TOI CEOs have said fixed plans are a thing of the past.
Giving an example of how planning cycles have become shorter, the Chairman of Hindustan Unilever (HUL) Nitin Paranjpe said, “We used to run the S&OP (sales and operations planning) cycle every month. When Covid arrived, this monthly cycle became not just fortnightly but weekly, and there were times in Covid when people came together every day to assess the changes that were happening. It happened during this Covid period because we had a crisis. It’s impossible for you to maintain that behavior after it’s gone unless you structurally build something into it. So we recognized that a fixed cycle, maybe a month, is history. We now need more rolling forecasts, rolling cycles, the ability to keep updating them, and the ability to detect what’s happening in the environment much faster. So the cycle times of what we do are getting shorter and shorter.
In a recent interview with TOI, Godrej & Boyce Manufacturing Co CMD Jamshyd Godrej said there was no need to significantly change long-term plans, but the current situation has affected operations and performance to a large extent. short-term planning. “The problem is that there is so much uncertainty that it becomes difficult to predict how long the crisis (inflation, commodity prices, war) will last. Most companies don’t change their longer-term vision. Most companies are trying to manage the current situation as best they can, in hopes that things will return to relative normality. But, on long-term planning, I wouldn’t change that too much at this stage,” Godrej said.
What leaders, on the other hand, ensure is that companies stay agile so they can react quickly to any changes. Mario CEO and CEO Saugata Gupta said: “The ability to anticipate and stay agile at all times in response to such changes has become a self-evident skill. Since planning cycles are much shorter today, an organization should always have a plan B, C or D.”
Gupta said black swan events are no longer an exception and have been incorporated into standard risk management processes. Performance management systems, Gupta added, have become more flexible so that “our members take risks but are rewarded for tight results on things that are within their control.”
However, the long-term goal remains intact. “We have not stopped our diversification and our digital journey. We cannot compromise the long term to manage the short term. For example, one of the things we consciously do is not cut our advertising and promotional spend to manage the short term,” Gupta said.
Prashant Peres, MD for India and South Asia Markets at Kellogg, said that any company that only plans for the short term will have no future. “You need to have a longer term vision of where you want to take your brand, your organization, your category, and you need to work on it. And you have to see the short-term bumps along the way for what they are – bumps,” he said.
Peres added: “They’ll hold you back, they’ll set you back a few months or maybe a year from your vision, but they can’t change your vision. We are very clear about where we want to take the brand and the company. And we know we’ll get there because we’ve built a culture that’s flexible enough to overcome a few of those hurdles or hurdles and push through them while scaling to the next level and to a better place.
Paranjpe said HUL has a long-term plan and also the ability to keep adjusting the trajectory depending on the situation. “The company’s vision, purpose and strategic direction are absolutely long-term, unaffected by the situation in which we find ourselves. We are committed to making sustainable living commonplace. We are committed to achieving our vision, which is to be a high performing company that delivers that performance through purpose and sustainability and a degree of responsible behavior. We are committed to this multi-stakeholder model that we have – none of that is affected by the period we are going through, in the periods of inflation that we face. Rather, a belief in the model is only strengthened given the challenges we see in the world around us,” he added.