Every businessperson knows that business planning is an essential part of managerial life. Towards the end of each year, the process begins when companies gather all the knowledge within the company and begin to “predict” the coming year. Anyone who has worked as a manager at several differently sized companies knows that this process has different significance depending on the company’s size. Let’s focus first and foremost on the world of multinationals.
Be careful with enthusiasm!
I think this is the easiest way to summarise the business planning process for international companies. Regardless of the organisation’s ownership background, predictability is paramount for the company. Obviously, this statement is exponentially true when we can talk about companies that are traded on any stock exchange. Young “multi soldiers” learn early on that the best result is not always a good result. Although no one ever communicates this at the beginning, and it is not appropriate to talk about the fact that it is not necessary to exceed the set goals, as a very positive result can raise a lot of issues that are not missing at all in a “balanced” multi-existence. It’s like when a young athlete moves from the junior to the adult league, or they simply move to a new team and of course that they want to prove their worth, prove that they can be counted on. That’s why they intensify their practices and perform the tasks as fast as they can. They want to make a space for themselves, and no matter if they are simply young or new, they want to prove themselves. If you’ve been in a situation like this before, you know for a fact that existing team members aren’t thrilled with the idea, as for many, practices are a just a hurdle that they need to top so they can then focus on the match. They don’t care anymore — though their coach who programmes the practices do — how fast they can run a hundred metres, or how many times they bench-press 100 kilos. This results in a lot of conflict between enthusiastic team members and the teammates who have been through a lot, and the coach is right in between them, as the coach expects maximum performance for the work they assign, but does not want to fight the “core” of the team that ensures team results. It’s not very different in a professional multi environment either. The situation always depends on whether the leader of a given unit just wants to build a career and, say, wants to get to HQ via their performance, or just wants to lead a better unit, or just wants to “manoeuvre” in this area, and there are no extra expectations that would disturb the peace of the whole company. In or to be “professional”, one must learn to move, and then really move, only when the HQ is specifically asking for it.
The Diplomatic Game
Of course, diplomatic games are going on in this area as well. The smart manager consciously constructs the process. They are also familiar with HQ expectations and the approval process. An important saying is that the best leader is not the one who brings the greatest results, but the one who can make their result seem like the best. Many would start arguing with this if it were discussed in an official forum, but deep down, everyone knows how true these sentences are. Planning in an international corporate environment is a “bargaining process”, a “negotiation”, in which the proposing party must be perfectly aware of the reactions of the other side. The basic fact is that you have to improve every year, because why else would you need a current CEO and its management? This is true even in the midst of the greatest crisis, and it is a misconception if one believes that any group of owners would be satisfied with a regression. You need to find an indicator, a number that will show growth. It follows that business planning is a big “numbers war” in which it doesn’t hurt to be aware of certain elements of accounting/controlling beyond the basic level. I’ve heard many times as a young manager from HQ that “if you can’t show improvement anymore, the problem is massive” and they were absolutely right. You need to be able to juggle numbers; otherwise, your career goes nowhere. Does this all seem like a scam? Why? Everyone has the same point! Calm down! Keep the numbers good and move the business forward. But at least we have data and facts about how this is really what is happening at the company. Once the numbers are in place, you just need to “communicate” them, be able to sell them to HQ. Of course, who doesn’t know the little tricks of “leaving a bone” for HQ, one that can be noticed easily so that the HQ manager can feel good too, because they also did their job, and their will prevailed. That way, everyone can be a good manager! And in the end, there can be approval and finalisation of goals with which everyone can already agree. And what if it isn’t? Then we’ll change it later in the year, won’t we? Who hasn’t heard of the beauty of “rolling planning” or “forecasting”, where again and again, a good manager has the opportunity to open a diplomatic front? Or is it more of a manipulation? It depends on where we look. One thing is for sure: big multi-managers are good players, and the more props they have, the more successful they are, the longer they stay in a multi-environment. Do they ever see the real results? After a while, the horizon is lost, and only the shop window is visible.
The game is over
Even if it’s not that fun and simple, business planning is definitely enjoyable for those who successfully manage the process. However, like all business areas, this has not dodged the COVID-19 crisis and its harsh effects. After all, well-practised games don’t work now. Now we need a real solution! What happens next? What always happens in a crisis. Role changes. A significant volume of submissions. Let’s not forget something critical! The coach doesn’t start fighting the “core” of the team as long as they can bring results. Even if the coach doesn’t like their work ethic, but nothing changes for a while as long as the team is moving forward. But let us not be mistaken, they know who needs to be replaced as soon as inefficiency appears. There are two options for “lazy players”: either they change immediately — which is usually a difficult matter — or they go. The international corporate environment also needs to change, drastically! And the first indication of the need for change is definitely the 2021 business plan. Which must be completely different than it has ever been before! Because if they don’t, they even assume at HQ that they don’t feel the change. However, the managers working at HQ need to show that there will be changes here! So, let’s understand, dear international business leaders, that we are now in dire need of a COVID-resistant plan!
To be continued…
A good “business trick” will bring serious success in 2021! – Business Planning for International Companies, Part 2