Happy New Year! – which it may or may not be. Remember how we approached 2024, which has not turned out exactly as we expected. 2025 now lies outstretched ahead of us, and we can already see some of the challenges it presents. Yet we cannot see everything: so, this article presents some tools to help you plan for what you think and be prepared for reality.
Our response to looking back at the last year is to look at how the world – our world – has changed, and then decide what we are going to do about it. In other words, create a plan.
Classic business planning and strategy tools still have their place. This is our plan, they are just tools, so we can use them as we feel appropriate. The common element though is not just what we do with these tools, but where we go as a result.
The Macro View
The bigger picture contains a range of issues and events which themselves are beyond our control, but which we will have to deal with the consequences. For viewing the world and the macro environment a PESTLE Analysis provides a comprehensive structure. While we talk online about the effects of Trump, Brexit, Ukraine, Inflation, compliance, climate change and whatever else is beamed at us every time we touch our phones (technology!), we can classify these themes – and more – using the headings:
Political
Economical
Social
Technological
Legal
Environmental
What must be done to achieve the targets, which will fulfil the objectives and take you in the direction of the vision?
Two tips here: don’t spend too long capturing everything, there is a potential black hole of time to be lost just talking about the issues.
Secondly and more importantly, once collated ask the key question – “So What?”. As in, what impact do these issues have for us – how could and should we respond?
It is this second point which transforms the use of PESTLE from whiteboard to action, so this is where the emphasis of discussion should be focused.
(If you prefer, use a STEEPLE, LEPEST, PELEST…you get the idea. The order you analyse macro issues is less important than using a structure, and especially coming up with coherent responses and plans for what you will do.
From the Macro picture of the world as it now is, drill down to your world and your market, using Michael Porter’s Five Forces model. Consider how you are working with your customers and suppliers and the power in todays – and what you anticipate being tomorrows – marketplace. Analyse too the potential other market entrants and substitutes. If you are in a growing market, you will attract new entrants, even if there are barriers to entry. (How easily can you produce silicon chips to power AI applications?). Substitutes may be more difficult to spot: they could be the outcome of customers doing something else instead of buying your products and services. Nokia, Kodak and Blockbuster were effectively substituted.
Again the ‘So What?’ question is crucial – look for what you do about your conclusions, not just your analysis of how things are. This is the essential step to shape your future.
The Micro View
We can also plan for the areas which are under our control: the Micro view. To look at what happens in your firm (or business unit, division, department) the most commonly used – and in my experience misused – tool, SWOT. In 2025 you will be talking about your Strengths, Weaknesses, Opportunities, and Threats potentially every day, whether consciously or sub consciously. But are you viewing them in a structured way, and especially looking for the action points? A key adaption of this tool is the 9 Box version, which enables you to consider your strategies in response to the relationships between Strengths and Opportunities & Threats, and Weaknesses and Opportunities & Threats. This format helps answer that ‘So What?’ question.
Sweeping all these ‘so what?’ responses together should enable you to then consider your overall direction and strategy – where you want to be, or what I categorise as Vision. Go for the pithy “put a Coke within an arm’s reach of everyone” (your version of it!) if you can, and avoid boilerplate, vague aims. “To make the best products on earth and to leave the world better than we found it.” might work for you: it matters less what you state your vision to be than how much your people engage in going in that direction, so involve them.
The tool I most frequently use when helping clients create the plan itself is Kaplan & Norton’s Balanced Business Scorecard. It’s been around nearly 40 years now, so there is plenty of experience in its use. It has also been adapted into steering wheels, maps, and other shapes, so you don’t have to use their 4 headings of Customers, Finance, Processes and People too rigidly: indeed Kaplan & Norton didn’t originally used exactly those words. (Originally it did not have a Vision centrally either).
What you are aiming for with a scorecard approach is to set objectives in each area, then agree your success measures for each one. Measures may be qualitative as well as quantitative, though for many in business numbers make understanding easier. Because we ‘measure what we treasure’ this leads us to setting targets, giving us Key Performance Indicators.
From your KPIs, it’s the fun bit: action. What must be done to achieve the targets, which will fulfil the objectives and take you in the direction of the vision? There is plenty to be done, and some project planning tools or Gantt chart help set out how you plan your actions – and progress. You cannot do everything in the first week, so pace yourself and your team, with some quick wins early on.
While this is the beginning of the year, one other tip. Who says you must plan for 12 months? You may feel that in the light of everything you have identified in your macro environment through PESTLE and your market through the Five Forces that you have a mountain to climb.
Identify the main actions you need for the next 6 months, maybe even 3 months. You can always add more actions when you review progress. A monthly progress review can easily add actions for say a 7th month, giving you a rolling 6-month plan. Shorter planning cycles can be a bit like driving through fog – your headlights illuminate just enough to enable you to move forward, and then illuminate the next part of the journey.
We didn’t aim to have 2024 turn out the way it has, and 2025 will not be exactly as we want either. Yet you can have a plan for where you want to go and what you want to be, to help you adjust your response to the inevitable periods of turbulence ahead.
