Strategic Planning in the Recession: Guidelines for Corporate Executives
Submitted by Businomics Blog
It’s an awful time to do strategic planning, but the planning MUST go forward. The time is awful because of the uncertainty. Here are some suggestions for planning processes that begin in mid-2009:
- Make your scenarios fairly far apart. I was just reviewing the three economic forecasts (baseline, optimistic and pessimistic) developed by a major forecasting firm. I was in a good discussion about the outlook, which included people I respect but don’t always agree with. My conclusion: the optimistic alternative was not sufficiently optimistic, and the pessimistic alternative was not as pessimistic as it should be.
-
- I’d go with an optimistic view that turns around right now, gets GDP growth up to two percent very quickly, then ramps up to four percent over the next four quarters.
- I’d like a pessimistic scenario to be “L-shaped:” no further declines in GDP, but no improvement for six or eight quarters. Ouch!
- Don’t just outline the scenarios and run them through the routine planning process. Look for common action steps under all scenarios. If you are going to replace the customer database in all three scenarios, that tells you something: get going with the project.
- For critical decisions which depend on the scenario, develop a set of economic indicators to monitor so that you learn which of your scenarios is in play as soon as possible.
- Look for items that you will NOT do in any of the scenarios. Take them off the table and stop talking about them. (That sounds so obvious as I write it, but I’ve seen many, many organizations continue to argue about things they will never do.)
Call me if your company would like more help.
Visit 1800blogger to see all of our industry leading blogs.
[?]
Are you an investor? Have something you want to say about the economy? Register on Econoimist Blog now and get published within minutes. Before posting, it is recommended that you review our posting guidelines.
