It all starts with a big bang: the laborious and time-consuming exercise that is your annual plan. Once complete, the plan is memorialized and people try to execute against it—even as some data and assumptions become quickly dated, even obsolete.
That’s the problem with this model. Business conditions change, sometimes quickly. External forces such as technological disruptions, market dynamics, new competition, and even global pandemics can appear rapidly to sideswipe your business.
And that annual plan you’ve been executing against? Instantly obsolete.
If we ever needed a reminder that “business as usual” doesn’t cut it anymore, the COVID-19 pandemic has landed that point with undeniable force. So it’s no surprise why more and more businesses are abandoning static planning and opting for modern, active planning models. Because now more than ever, agility is the currency of success.
Rob Hull saw the need to fix static planning as far back as 2003. As a frustrated CFO, he sought an alternative to the siloed, manual, and error-prone ways of planning that permeated business at the time. His answer was to found Adaptive Insights, which was acquired by Workday in 2018.
Since then, the pace of change has only accelerated. Digital transformation is widespread. And this has made active planning—comprehensive, continuous, and collaborative—a strategic advantage for businesses trying to achieve agility.
“Global environmental impacts change faster than ever before, and in ways that were just simply unexpected and unplanned for,” explains Hull. “So that presents a tremendous management challenge.” Hull outlines a twofold dilemma that places organizational leaders on both defensive and offensive fronts: the immediate defensive challenges of keeping the lights on and trying to maintain as-close-to-normal operations as possible; and the eventual offensive challenges of responding to a rapid increase in demand and trying to seize new opportunities.
“Agility—the ability to quickly react to changing circumstances—becomes the difference between continued operations and shutting down altogether,” says Hull.
For companies whose planning and response are less than agile, internal factors often potentially act as planning speed bumps. For instance, globalization presents a planning challenge for companies with a worldwide presence when accounting for multiple time zones, currencies, and languages. Increased automation can cause headaches when trying to sift through, synthesize, and extract insights into manufacturing or hiring needs. The planning data itself can prove problematic when organizational leaders attempt to work with stale data that hasn’t been updated to reflect the current reality, or if the data is siloed and prevents collaboration across departments and business drivers.
“In all of these cases, I’m either unable to react or I’m reacting in different ways across the organization, all of which just puts me at a disadvantage,” notes Hull.
In Hull’s eyes, the real advantage of agility is not just being able to react when change occurs but being able to seize the moment when new opportunities arise. “It’s really all about enabling the disruptor,” he says. “It’s about enabling the ability to . . . be a driver of change. If you’re in your industry and see opportunities that you can take advantage of before your competitors, you are that disruptor.”
When those moments occur, you want to be ready. That’s why more companies are leveraging real-time data across all their key departments so people closest to the business can collaborate on plans. They’re preparing for the unexpected by modeling what-if scenarios, developing forecasts based on data drawn directly from the applications the business runs on, and making decisions based on insight, rather than instinct. They’re freed from what Hull remembers as his old, static planning prison in the office of finance: the manual, menial minutiae of spreadsheets, working from a plan filled with stale data and trying to chart a forward course with limited views into what’s happening in the business right now.
And active planning is not just a nice-to-have. Hull encourages finance and other executives to make sure all aspects of the business are “moving in lockstep together and really be constantly evaluating both where they are and how they’re doing relative to what they expected.”
For Hull, this kind of approach to planning fuels success: “Those are the organizations that are going to not only survive, but thrive in this world.”
“Agility—the ability to quickly react to changing circumstances—becomes the difference between continued operations and shutting down altogether.”Rob Hull founder, Adaptive Insights
Hull argues that since the office of finance sits at the natural intersection of all of an organization’s data, it is perfectly positioned to be the change agent in planning transformation—and the champion for making the case for adopting a culture of agility.
Operations and strategy inherently feed into finance, which bestows unique insight into what’s happening across the company. When you combine that with a strategic imperative to help the organization figure out how to make the best use of resources to grow as optimally as possible, it’s clear that finance is ideally positioned to connect business drivers, initiatives, goals, and data to help develop and execute corporate strategy.
But this evolution isn’t new. “This has been happening for a good 15-20 years,” notes Hull, who has presided over the ascent of modern planning as one of its pioneering visionaries. Planning has evolved, he says, “for finance to not just be backward-looking, counting, and tallying how the organization has done historically, but really help the organization to look forward, to be proactive in identifying opportunities and look at where the business is going.”
What is new is the idea of finance as the dominant force for creating an agile organization. And this new role requires finance executives to ask new questions about their place in the business. “How do we enable them to be more collaborative across the organization? With improved efficiencies, with better collaboration, how do we enable finance to really take a more strategic role in the organization?”
It’s likely that at no point in the history of your business have your weak spots been so easily identifiable. Though stress tests are no fun, they can often present opportunities. “There’s no better time than now to really evaluate the way in which you’re planning,” advises Hull. “What’s key for everyone to understand is that there are technologies out there today that can in fact enable this (planning) transition from static to active.”
But unlike the original, painful big bang of old-school planning, modern planning can be rolled out in a way that works for your business—systematically and with more stakeholders throughout the business gradually adopting active planning over time.
It’s entirely possible that now is the perfect time to begin that evolution.
For more on how planning is changing and on finance’s role as a change agent, listen to the full conversation with Rob Hull on the Workday Podcast.
Listen on SoundCloud: Workday Podcast: To Deal with Disruption, Businesses Are Changing How They Plan
Listen on Apple Podcasts: Workday Podcast: To Deal with Disruption, Businesses Are Changing How They Plan
Listen to more Workday Podcasts here.