The Power of Planning
"No plan survives first contact with the enemy," said military strategist Helmuth von Moltke. So why bother planning at all?
Here's the crucial insight: In retail or any other business for that matter, we don't manage on the plan—we manage on the variance.
Plan - Performance = Variance
This simple equation is the key to continuous improvement. Here's why:- Variances Drive Action
- Negative variance? We seek ways to improve.
- Positive variance? We look to capitalize and expand.
Forward-Looking Approach
- We can compare forecasts to plans, allowing proactive adjustments.
Context Matters
- Plans incorporate current factors better than simple year-over-year comparisons.
Iterative Improvement
- Each planning cycle refines our assumptions and improves accuracy.
The BIG takeaway? Any plan is better than no plan. It's not about perfect prediction—it's about creating a framework for responsive, informed decision-making.
As you analyze more variances, you build better plans and sharper forecasts. It's a virtuous cycle of improvement.-
Posted by Brian Hume
30th August 2024
