Planning When You Cannot Predict

The problem with the annual plan

A plan written in January describing what the business will do all year assumes the ground stays still.

This year it has not, and a plan made in December would already have been revised three times.

That does not mean planning is useless, it means the unit is wrong.

A quarter is short enough to be roughly right and long enough to finish something, which is the useful compromise.

Sort decisions by reversibility

• Trivially reversible: a page, a setting, a trial.
• Reversible with effort: a supplier, a tool, a process.
• Expensive to reverse: a rebuild, a contract, a hire.
• Not reversible: a lease, a purchase, a public commitment.

The first group should be decided quickly and tried, since the cost of being wrong is the time spent. The last should be decided slowly and with more evidence than currently exists, which this year usually means later.

Prefer the reversible version

Where both are available, which is more often than it appears.

Monthly rather than annual on any subscription until it has proved itself.

A trial engagement rather than a contract, with a supplier you have not worked with.

Improving three pages rather than rebuilding the site.

Hiring a contractor for a specific piece rather than a permanent role, where the volume of work is uncertain.

Each of those costs slightly more per unit and buys the ability to stop, which in an uncertain year is worth the premium.

A worked example

A business was considering a full rebuild, quoted at a substantial sum, on the argument that the site needed to be ready for whatever comes next.

Nobody could say what it needed to be ready for, which is the honest position this year.

Instead they spent a fraction of the budget on the four things everybody agrees about: prices on the service pages, photographs of real work, a review system, and faster replies.

All four are useful under any version of what happens next, and none of them commits to an assumption.

They kept the rest of the budget and will decide about the rebuild in a year with better information.

If the rebuild is still right then, it will be right and cheaper to specify.

Ask what this assumes

The question to put to any longer commitment.

Every plan contains assumptions, and in a stable year most of them are safe.

Write down what a decision assumes about the next two years: that a platform still exists, that a channel still works, that costs stay similar, that a tool remains available.

Where a decision assumes something that has been visibly moving, that is the one to make reversible or defer.

Where it assumes only things that have been true for a decade, it is safe to commit to.

That sort takes ten minutes and separates the risky commitments from the ordinary ones.

Some things are safe to commit to

Since this can become an argument for doing nothing.

Reviews, photographs, prices on pages, a customer list, faster replies, and referral relationships are all useful regardless of what happens.

None of them depends on a platform, a tool, or a prediction being right.

So the resources not being committed to uncertain things should go there rather than being held.

Holding a budget and doing nothing is its own decision and usually a poor one.

The point is choosing what to commit to rather than whether to.

Set review points instead of end dates

Which is what makes a short horizon workable.

Rather than deciding now what you will do in November, decide what you will do this quarter and when you will next decide.

Put the review in the calendar with the two or three questions that would change the answer.

That converts an unmakeable decision into a scheduled one, which removes the pressure to guess now.

It also stops the common pattern where a deferred decision is simply never made at all.

Write down what you expect

Since it is the only way to improve at this.

When you make a decision, write one line about what you expect to happen and by when.

Reading those a year later tells you which of your predictions were reliable and which were not, which is genuinely useful information about your own judgement.

Most people find they were right about their trade and wrong about technology, which is a useful thing to know about yourself.

It takes a minute per decision and it is the cheapest form of learning available.

Keep some money unallocated

A practical consequence of short horizons that budgets rarely accommodate.

A budget fully committed in January cannot respond to something genuinely worth doing in August, which in an uncertain year is the more likely shape of the opportunity.

Holding back a portion, deliberately, is the financial version of preferring reversible decisions.

It also removes the pressure to spend the remainder in December on something nobody wanted, which is how most year-end budgets get used.

A quarter of the annual allocation left unassigned is enough to act on something without needing approval for a change of plan.

The counter-case

Short horizons have costs.

Some things only pay over years, and a business that never commits beyond a quarter never builds anything that compounds.

Reversibility also has a price, and paying monthly forever costs considerably more than committing.

And uncertainty is frequently overstated, since most of what a small business does day to day is unaffected by anything in the news.

Plan a quarter at a time, prefer the reversible version where one exists, commit fully to the things that are safe, and set review dates for the rest.

The approach

1. Plan a quarter, not a year.
2. Sort decisions by reversibility.
3. Take the reversible version where offered.
4. Write down what each assumes.
5. Commit fully to the safe things.
6. Set a review date for the rest.
7. Note what you expect.

Step five is what stops this becoming paralysis, since there is a substantial list of things worth doing that no possible future makes wrong.

Deciding what deserves a response is covered in deciding not to chase every change.

Frequently asked questions

West Coast Media Solutions Inc. provides web design, web development, hosting, digital marketing, and business consulting to organisations across Canada, drawing on more than twenty-five years in the field.