This time of year is always tough. It is a time when many of you will be opening the spreadsheets, rehearsing your best pitch and planning for several scenarios.
Budgeting should be an exercise with a dual purpose: laying out a strategic plan and ensuring you have the resources to execute it. It’s a difficult balancing act at the best of times, even more so now, when faced with a long recession, a second lockdown and the fallout from Brexit negotiations.
Out of necessity, there’s a risk budgeting stops being an exercise in making things happen and instead becomes one of mitigation against the worst case scenario. About fire fighting and not being fit for what is coming down the track. Strategy by nature is about determining where you want to get to in the future; right now, for many of you, getting to the end of the day feels like a stretch, never mind next year and beyond.
This is a challenge expertly analysed in this piece by my colleague Charlotte Rogers. In it, we hear from marketers on how they are employing a two-fold strategic approach. Our contributors continue to employ the strategic checklist – a decision on what they want to do and how they want to want to do it – but are building flex to account for circumstances.
MoneySuperMarket marketing director Lloyd Page, sums it up nicely: “There’s always an expectation that you may need to change tack along the way. If you’re going from A to B, you might have to go left or right a bit depending on which way the winds of competition, customers and pandemics blow. You have to be able to react along the way, but ultimately you’ve arrived at a strategy you believe is still right.”
As brutal as the conditions are and as necessary as it might be to react, every company, team and employee needs a strategy.
Reading over the piece, I was reminded of A.G. Lafley and Roger Martin’s 2013 book Playing to Win: How Strategy Really Works. It is a book that is much discussed and often quoted when it comes to setting strategy. At risk of misinterpreting the message of the book, the two argue that setting strategy is complex but not hard. That it comes down to making choices to do some things and not others, and remaining focussed on outcomes.
As prescient as the two are, they obviously didn’t write a playbook for succeeding amid a pandemic, the long-term consequences of which we are still working out. Yet much of what they argue should be avoided in setting strategy does resonate.
The duo caution against allowing “what is urgent to crowd out what is important”. And their advice to those that “deny the long term” can be applied in 2020: “Not only is strategy possible in times of tumultuous change, but it can be a competitive advantage and a source of significant value creation.”
That last piece of advice is essential. As brutal as the conditions are and as necessary as it might be to react, every company, team and employee needs a strategy. Iteration and flexibility around tactics is understandable in any circumstance, but particularly so when there is still much that can change with the pandemic and the economy. A strategy that can adapt if a change in situation brought about by things out of your control no longer allows you, as Lafley and Martin might put, to make the same choices. But a strategy.
Getting by might feel like the only option in the weeks ahead, but making active and positive choices about how you will meet customer needs profitably in a way your competitors cannot is required when thinking about next year and how you might budget for it.