Long-term planning has been a part of business strategy for more than a generation. It’s even been immortalized in famous quotes. Legendary baseball coach Yogi Berra reportedly said, “If you don’t know where you’re going, you’ll end up somewhere else.”
But could it be time to refresh and reconsider this traditional way of thinking?
There’s no question that strategy and planning are the cornerstone of a good business management approach. But in a world where the pace of change is more rapid than ever, adapting your business planning and prioritizing agility are essential.
Here’s why.
1. Conditions Are Constantly Changing
In 2024, change continues to move fast and furious in most business sectors, whether it’s driven by the supply chain, the workforce, regulators, or customers. Major forces driving this change include:
- Technological advancements: Technological innovations, including AI, automation, and blockchain, are continuously reshaping business environments. Staying on top of these advancements requires being nimble and open to integrating new technologies as they emerge. For small businesses, it can be even more important to automate or eliminate repeatable tasks in areas like scheduling, customer care, and marketing. This is where agile business planning excels.
- Market volatility and global events: Global events can drastically alter business landscapes overnight. This year, a slowdown in the Chinese economy, the drop of the yen, and major elections are creating ripples in the global economy. Rigid long-term plans might not account for sudden changes, and neglecting risk assessment can leave businesses vulnerable. For example, housing prices can affect hiring, and new tourist hot spots can affect business travel or cause fluctuating product demand.
- Evolving consumer behaviors: As Gen Z enters the workforce and gains buying power, they will have more and more effect on current norms. Trends are moving faster, especially in areas like fashion, music, and social media. Fashion brands went from having two seasons per year to 52+ micro-seasons. It’s pretty safe to say that over time, we’ll see rapid changes in workforce behavior and in more consumer sectors.
- Work from wherever: The rise in remote work has changed employee expectations and altered the way many companies operate, bringing attention to the need for new technologies and procedures. This trend has caused many organizations to rethink their office needs, deciding whether their business will require a workspace for their full team or a hybrid team in the near and long term. As a byproduct, companies of all sizes are evaluating whether a traditional office lease with three to five-year terms is still right for them or if they’re better off with a flexible office solution offering shorter terms and greater flexibility to scale up or down or add new workstations as their business needs change.
Agility and flexibility will be key strengths to build on for future success, and there are some industries already leading the way. Agile business planning, using the concepts created by the software industry, could be an effective way to update business planning.
2. Agile Business Planning Builds Resilience
Although it was developed in the software industry, agile business planning has spread to companies in many different industries, such as NPR, John Deere, and Saab. And it’s being used for everything from editorial planning to new product development and HR.
Agile business planning is all about getting more out of the programs and policies you already have. The methodology has three main forms:
- Scrum: This step focuses on creative and adaptive teamwork in solving complex problems. Whether you’re working out how to increase sales or planning an important meeting with multiple stakeholders, try this strategy to discover new solutions. This is a great opportunity for leaders to model adaptability by being open to new ideas and encouraging innovation at all levels of the organization. Ideas can come from anywhere, even customer collaboration.
- Lean development: The next area is the continual elimination of waste through continuous learning and adaptation. If you support a culture that values learning from successes and failures, continuous improvement and innovation can thrive. Iterative development is another term used for this concept.
- Kanban: This part of agile business planning is designed to reduce lead times and the amount of work in processes. Processes should be simpler and shorter for organizations to be more flexible. Kanban boards are a visual tool that teams use to organize projects and workflows in order to share more information than in a long report or document.
Agile business planning is a good fit for volatile times because it helps businesses embrace adaptability and resilience. For example, giving teams the freedom to make decisions within their areas of expertise can lead to faster responses and increased engagement.
At the same time, when planning in a short cycle, you must be prepared for multiple options and scenarios. Having a backup plan and being ready to switch strategies quickly if needed is essential and a key part of building resilience.
3. Agile Business Planning Avoids These Common Traps
There are clear reasons why traditional five-year business plans are less effective today. The never-ending, always-on pace of change has transformed the business arena in a short period.
Businesses need to be more responsive than before and test their assumptions often. Here are a few other places where agile business planning can be superior to standard methods.
- Outdated assumptions: The main aspects of a 5-year plan can become obsolete within months due to changes like technology, regulations, or market conditions. There were many examples of this during the global pandemic when some businesses ended up with too little or too much stock or had staffing challenges.
- Infrequent review cycles: Agile business planning, by definition, will have more review points, which can guard against obsolescence. Short-term planning with regular reviews every 6 to 12 months allows room for adjustments. Businesses can use agile business planning to pivot quickly in response to new information or changes in the environment.
- Risk of overinvestment or underinvestment: Assigning resources based on long-term projections can lead to inefficiencies by misunderstanding market conditions and overinvesting or underinvesting.
Inflexibility and sticking to a fixed long-term plan can prevent businesses from seizing new opportunities or responding to threats. Resilience has become a buzzword in the business industry in recent years as more and more companies deal with higher levels of change.
Are your competitors flexible and adaptable? Well, that might put them at a significant advantage. Companies from big to small are starting to adopt the principles of agile business planning to compete.
4. Agile Business Planning Fits with Current Business Practices
Planning using agile business principles fits well with many other common practices in the current business environment. These practices include S.M.A.R.T. goals, data-driven decision-making, and cross-department collaboration.
Traditional 5-year business plans are a common feature from the time when organizations were more hierarchical and operated top-down, with little input from front-line employees or customers.
For several decades, flat organization structures and getting team buy-in on direction and decisions have become more common. If you already have specific, measurable objectives, real-time analytics, and regular reviews to evaluate strategy, agile business planning can make good efforts achieve great results.
How To Encourage Flexibility and Agile Business Planning
If you want to incorporate agile business planning in your business, where should you start? You can look at company-wide organizational strategies or tackle urgent, specific areas. The choice is up to you.
Company-Level Strategies For Agile Business Planning
- Evaluate Current Planning Methods: Carefully assess your existing planning processes for flexibility and responsiveness to change.
- Blend Operational Practices with Strategic Flexibility: Review operational elements like office space, technology, and processes to ensure they support agile planning efforts.
- Streamline Processes and Reduce Bureaucracy: Update internal processes to eliminate unnecessary steps that slow down decision-making and implementation. Think about ways to adapt faster to new plans.
Department-Level Strategies For Agile Business Planning
- Invest in Scalable Technology: Look for cloud-based systems and scalable software solutions that can grow with or adjust to business needs. Choose flexible solutions over infrastructure that is rigid or expensive to adapt.
- Flexible Office Solutions: Flexible office spaces can support business agility and save costs over time. Coworking spaces like The Post Workspaces in Tucson allow for scaling up or down without the constraints of long-term leases, aligning physical operations, and a variety of workspace options from virtual office space to short-term leases or meeting rooms. For example, your business can have a private office and add coworking or dedicated desk memberships for additional staff as required. You can also choose any membership that best suits your needs. Coworking spaces like The Post also offer amenities like bookable meeting and conference rooms that you can access without having to pay for them within your workspace’s floor plan.
Approaching one operational area at a time is a good way to start and build new habits that are sustainable and actionable. Start small with pilot projects by initiating agile business planning in specific departments or projects to test its effectiveness before a company-wide rollout.
For optimum effectiveness, provide team training on agile methodologies and equip your company with the necessary skills.
Have you added agile business planning to your toolkit for business success? As part of the Tucson business community, we’d like to hear from you. What planning strategies work well for you? If you’d like to learn more about flexible office space and how it can support your agile business planning goals, book a tour of The Post Workspaces today. Our team would be happy to answer your questions.