Businesses are going to have to navigate through an uncertain year in 2023.
One thing is certain this year, and that’s uncertainty. Inflation is driving costs higher; interest rates are at their highest level in years and the outlook for the economy is gloomy.
To navigate through all of this uncertainty, businesses need to focus on developing effective plans which can be adapted if market circumstances change quickly. The best businesses have three types of plans:
⦁ Strategic plans – these are the overarching objectives for the business and look ahead to where you want to be in 3-5 years.
⦁ Tactical plans – these support strategic plans and are the roadmap for achieving each of the strategic objectives. They outline the specific responsibilities and deliverables of each team across the business in order to make the strategic plan successful.
⦁ Operational plans – these focus on the processes, procedures and tasks that must be accomplished in order to achieve the firm’s objectives. Operational plans include finance, procurement, production, logistics, human resources, premises, communication and sales.
Given the uncertainty that all businesses are facing, it’s important to plan for unforeseen circumstances. As such, you must train your team members to embrace change and be ready to adapt. So why plan at all if everything is subject to change? Putting strategic, tactical and operational plans in place and communicating the objectives of these plans across your entire business gives everyone something to aim for. If everyone in your business has clear objectives and understands them, they will, at the very least, keep moving in the right direction. Then it’s up to the management team to implement changes of direction if things change and the firm needs to adapt.
A good management team needs to embrace uncertainty. The key is to avoid developing a strategy as though we know the future. Instead, the management team needs to try to calculate the chances of success for each strategic move and then plan to move forward with the strategies and tactics that have the best chance of success. This ensures that the firm’s resources are always focused on the things that are most important in ensuring overall success.