The crisis, or the possibility of it, appears threatening. We feel the threat of loss and this triggers our fear.
Planning
- F. Action and effect of planning f. General plan, methodically organized and often of great scope, to obtain a specific objective, such as the harmonious development of a city, economic development, scientific research, the operation of an industry, etc.
Crisis. (From the lat. Crisis, and this from the gr. Κρίσις).
- F. Abrupt change in the course of a disease, either to improve or to aggravate the patient f. Important mutation in the development of other processes, whether of a physical, historical or spiritual order. Status of a matter or process when the continuation, modification or termination is in doubt f. The defining moment of a serious business with significant consequences f. Judgment made of something after careful examination f. Shortage, famine. Difficult or complicated situation.
The previous definitions have been taken from the Dictionary of the Royal Spanish Academy.
To give order to the theme, let's list the elements that appear in every plan. Let's start with the objective we pursue. From there, we evaluate the actions that we can take using the resources we have in the way that we believe is most efficient and effective. Knowing what we are looking for and what we have, we choose the strategy and actions to implement. By pursuing a measurable objective (an essential condition) we will be able to evaluate, as we advance, how effective the plan is, that is: how close we are to the objective we had set ourselves. We call this management control and it helps us to make corrections on the fly, since some assumptions we had made to design the plan may have changed (after all, change is the only constant).For effective control, indicators are used (number of units sold, average sale, number of inquiries, etc.) that help us to know the effectiveness during the execution of the plan.
Keep in mind that resources are the ingredients with which we will manufacture (transformation process) the good or service that we will offer in the market. From the latter, we will identify the segment or segments in which we will participate, trying to know certain details of the segment such as: average prices, consumer profile, buying habits and main participants (competitors) of the same (resources, organization, strategy, strengths, weaknesses, opportunities, threats) and their estimated market share.
It is not necessary that a crisis appears to “get a grip” on the plan we have designed. The entry of a new competitor, an increase in import tariffs, a rise in the dollar, an increase in some raw material or wages, a minor climatic contingency (flood, drought, heat, cold), can trigger the need for review the business plan. It may even be that it is not a negative correction, but it may be the case of a possible positive impact and we must modify the plan, assuming that our sales or profits will be higher than what we budgeted for when deciding the original plan..
There are no static business plans, they are all dynamic. For this reason, the controls carried out throughout its implementation are very important. They allow us to adapt our plans to the "reality" that has been taking place. Suppose there has been a drop in the gross margin on our sales. What happened? Is it necessary to evaluate a possible increase in the sale price? What will happen to our annual plan if this continues?
When what happens is a crisis (see definition at the beginning of the article) that, apparently, disrupts our plan, I think it is convenient to forget about the original plan and design it again. This avoids retouching what is possibly no longer valid. This attitude is related to letting go of the past and accepting the present as it is presented.
The crisis abruptly confronts us with uncertainty about the future. Although we have never worked with certainty, the trajectory gives us the know-how about the business segment in which we operate and prompts us to venture to predict the behavior of the main variables considered in the plan. We must not forget that we have always operated with assumptions and that the only "apparent certainty" is provided by the history of our activity or business.
Under “normal” conditions, the plan requires less analytical work and we, the plan designers, do not provide a possible emotional overflow with what is supposed to happen. We have been working in conditions almost on automatic pilot, focusing on certain aspects that can be operational and strategic that do not modify much what we have been doing forever or at least for some time.
The crisis, or the possibility of it, appears threatening. We feel the threat of loss and this triggers our fear. The more valuable to us what is at stake, the greater the threat we feel. This is the feeling (emotion) that appears as a new "member" (variable) to take into account when designing our plan in the face of a crisis.
As it is about "something" unexpected and on which we feel unable to operate (we can do nothing to prevent a flood or the current breakdown of the world financial system) there is also impotence (not being able) that brings us anger or anger, energy available to transform in our favor, as long as we do not enter the field of unproductive and exhausting complaint or the debate on possible solutions to the crisis as a whole (unconscious defense mechanism that allows us to kick the underlying issue forward). What do we think and how do we think? (This is very important to be able to clarify). Where do I stand in the face of the crisis?
For the Chinese, the crisis contains danger and opportunity. Both extremes are present. It is in our decisions (influenced by our emotions) to position ourselves closer to danger or closer to opportunity. It is not a bad thing to be aware that there is danger, not doing so can make us reckless capable of promoting actions as if nothing were happening, precisely with the danger that this can bring us. Furthermore, it may be that by assuming the danger posed by the new situation we will be able to strengthen ourselves. We are not denying the danger, we only seek to limit it and keep it in mind for our decision making. Being aware of danger is what preserves us.
Re- planning in the face of a crisis is what motivates our growth as individuals and entrepreneurs. It requires "pretending that today we will begin to do what we already do." This new situation has certain advantages: we have accumulated experience and with clients and suppliers, we have working capital and knowledge of the segment in which we work. How would I do what I do today? This question should cover all the procedures used to date. Why should I do what I do the same way I do today? Without a crisis, it is very possible that we never stopped to do this review (automatic pilot).
Something that is very important to start this journey is to take into account that now (in the face of the crisis) the assumptions, which always were, have a conscious component of uncertainty greater than a while ago, in which there was no focus on the unknown. At this point it is important to highlight the permanent “hammering” of news, comments and forecasts to which we are exposed on a daily basis. Without realizing it, they are doing their job of frightening us by the "who knows where we'll end up." At this point, discernment is essential. What news brings valid elements to my re-planning? ”.
It is important to emphasize the need for beliefs (assumptions) to be supported and not used for their own sake. Example: I think the dollar is going to be priced at $ 4.50 in the middle of the year and imports will fall, giving me the possibility of increasing my sales, for which I will buy a new machine to increase current production capacity. We must support the belief with logical bases, otherwise they will not help us to put order in the work to be done and it may be that our denial of fear of facing something threatening appears and we end up becoming reckless.
All of the above can be done alone, which carries the danger of "assuming what I want to assume" or doing it in a working group, either within the organization in which we operate or externally. Groups give us the possibility of listening to ourselves in others and being able to “see” something that in solitude would not have been possible.
Faced with a crisis, even for those who are used to teamwork, I think it is "healthy" to approach a group of peers to be able to share different perceptions not only about the possible consequences that the crisis can cause in each of the variables of our plan, but also to exercise acceptance of dissent of opinions.
Just as an example I list some of the questions that can open gaps that allow you to design a new business plan.
Market
What can happen? Who will be the most affected? Of my current clients, who could be the most affected? Is the impact of the crisis already felt in the segment in which I operate? Who are the ones who suffer the most? Does it impact on the distribution channel I use? Are there any alternate channels that I haven't tried yet? Could (the crisis) cause a decrease in demand? What other segments related to mine could be affected? In the event of a certain retraction in demand, could you appeal to new markets? Which?.
Means
What are the resources I have? (list them all, tangible and intangible) What is the strategic and differential resource that I have compared to my competitors? Can the crisis affect any of my resources? How can I substitute a resource that may be affected? Could I ally myself with someone to strengthen my position?
Beliefs
What do I think will happen with the crisis? How will it affect my segment? How will it affect me and my business? How do I think the consumer of my products or services will behave? What will happen to imports? What will happen to the dollar? Will there be credit? How could you overcome this situation?
Organization
How could I adapt my organization to the crisis and its impact on the market? How does the crisis affect the objectives you had set for this year? Does it affect income? Can I reduce operating and / or production costs? What procedures should I review?
Strategies
Should I change them? Could you think of opening new segments? Is it possible to enter new business segments with new products or services? How could I strengthen my presence in the market? How could I retain my best customers? Could I partner with someone to strengthen my position? What would my breakeven point be if sales are affected by XX%? How could I take advantage of this crisis to infiltrate the segment of such a competitor?
