STRATEGY PLANNING IN UNCERTAINTY
Stage 2 Managing budgets Next comes financial control, forecasts, spending targets and cost discipline. It’s necessary, but often backward-looking. Stage 3 Managing objectives Strategic focus improves. Leaders begin aiming for results, not just completion of tasks – but objectives still assume a level of stability that rarely exists.
Set your thermostat In an uncertain world, organizations can improve their preparedness by focusing on the future – and deciding how they will act under certain scenarios Writing Pat Alacqua
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ven the most experienced executive teams are finding Q1’s plans outdated by Q2. Perhaps the market shifts, the budget gets cut, or a competitor launches faster. Suddenly executives are reacting, not leading. That feeling of being blindsided is more common than most leaders care to admit. In today’s environment, even the best strategies can fall apart quickly. Uncertainty isn’t the exception; it’s the operating climate. So how do the best companies keep moving forward? How they adapt starts with how they manage their assumptions. They plan differently. They build smarter systems that prepare them to pivot when the plan breaks. The best-run companies follow a pattern. From startup to successful enterprise, they evolve in how they think about planning and how they prepare teams to respond to change. That evolution has four stages.
Few teams define thermostats. Without them, you’re always behind, debating instead of deciding
Stage 4 Managing planning assumptions This is where elite companies operate. Instead of planning around what they want to happen, they build around what they believe to be true, and design a system to respond when assumptions break. The mindset shift is critical – but mindset alone doesn’t get the job done. The best leaders operationalize this approach using a forwardfocused system, which I call the Windshield Process. It keeps your eyes on what’s coming, not just what’s already happened. Traditional planning is rearview – it looks at last quarter’s results and builds a plan to fix or repeat them. Far better to flip that and look forward. Yet while having a long-term vision is important, detailed 10-year or even five-year plans rarely hold up. I generally recommend focusing on a three-year horizon – but whatever your time frame, you need a planning approach that allows for adjustment without chaos. You can then pivot as needed before the business veers off track. There are four key steps to developing a flexible threeyear plan. Step 1 Identify trends that shape your assumptions Start by defining the assumption categories that matter most in your business. These differ by industry. Some companies focus on demand, customer behavior, labor or economic trends. Others track things like vendor reliability, tech adoption, regulations or capital access. Within each category, scan for signals: favorable trends that present opportunity or acceleration, and unfavorable trends that point to risk or disruption. Don’t settle for surface-level forecasting. Great companies pressure-test both sides. They recognize that upside momentum can be just as disruptive as downside risk. Step 2 Assign a thermometer and a thermostat For each trend, define two components that bring your response system to life. Your thermometer is the measurable indicator that tracks the trend. It might be the pipeline conversion rate. But don’t
Stage 1 Managing activities Startups live here. Plans are built on tasks, timelines and checklists. It works early on, but complexity eventually outgrows it. 80
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