The time-change continuum at once motivates a business to plan and prevents the planning from being effective. In a competitive marketplace, where change may be exploited for economic advantage, to sustain profitable performance over time a business must change. Without getting into the mathematical complexities of the space-time continuum model (the description of an event requires three space dimensions and a fourth dimension of time), for the purposes of this discussion we simply recognize as axiomatic that as time continues, change at some variable pace will also continue. We can call this the time-change continuum.
A business can respond to the time-change continuum in two ways: it can anticipate the change or it can react to the change. Business writers have used the terms “proactive” and “reactive” to describe these actions. A business that is proactive plans for a perceived change and may therefore deal with the change when it occurs with more effectiveness. A business that reacts to change may not act quickly enough to sustain profitable operation.
Based on these options, the case for planning as a way of dealing with the time-change continuum would seem to be made. However, according to McKinsey & Company (https://www.mckinsey.com/featured-insights/leadership/changing-change-management), the reality is that business change planning fails to achieve its goals more than two-thirds of the time. Why would this happen? Two principal factors of the time-change continuum, the same phenomenon that is the cause for planning, are responsible for the failure of change planning.
Time is one principal factor responsible for failure. It is the framework for the action to occur. If planning takes too long or is not implemented before the change occurs, the planning effort is wasted and the only possible action is reaction to the change. In this situation, which is not uncommon, the business would be better off not trying to plan at all.
The other principal factor causing change planning failure is that planning requires anticipating a future event – something that is quite difficult to do. It is not unusual to hear a business owner say: “If I could predict the future, I would already be rich and not have to run this business.”
Because of these two factors, now we might consider that the case for not planning has been made. But let us turn things around and, considering the two factors, define what the requirements are to make planning effective. First, the creation and implementation of the plan must result in timely action. This means that the plan must be a narrative communicated to all who must execute the actions needed to realize the goals of the plan and anticipate the change. Second, since there is a definite possibility that an attempt to predict future events will not be accurate, there must be a mechanism to correct the actions taken as soon as the nature of the change can be more accurately determined.
These requirements to enable effective planning presume an underlying decision-making process in the business that is capable of making timely decisions and efficiently revising those decisions. Effective decision-making requires the right people in possession of the relevant knowledge to communicate a wise determination. The right overall group to contribute to making the decision should consist of the policy-making group (often the owners and senior management), those who will cause the action to effect the planning (often senior management), and those who will monitor the actions (often the accounting group). Though there is an overall group involved in the decision, there will be a decision-maker – usually one person with the responsibility to determine the planning narrative (often the CEO).
Supporting the decision-making process that creates the narrative for the plan is the format of the planning narrative. The traditional strategic plan, hatched at a planning retreat, in a three ring binder, and placed on a bookshelf, will not be reviewed until the next retreat. This plan will fail because of the plan format – there is no communication to the overall group. If the policy-making group does not communicate with those who will take action to realize the plan goals and those who will monitor those actions, the plan will not be implemented or monitored so that changes can be made. Effective planning must be dynamic so that immediate communication is made to all of the decision-making group of the plan narrative, the actions taken to realize the plan goals, and the revisions as soon as the monitoring show the need.
The time-change continuum requires a business to plan to remain profitable, but at the same time works to make planning ineffective. A business wishing to sustain its profitable operation must deal with the time-change continuum by instituting a decision-making policy consisting of a decision-making group made up of not only the policy-making group, but the group that will take action to realize the plan goals, and the group that will monitor the results of those action. The format of the plan must be dynamic by communicating decisions to all groups as they are made and also communicating the results of those decisions as the effects of actions taken are realized so the plan may be amended in a timely way. A dynamic plan overcomes the challenges of the time-change continuum by providing timely decisions to create a plan that can be revised as the need becomes apparent.