IN TOUCH:What’s the plan?

When it comes to planning, it seems Kiwi companies are at least slightly ahead of the global game with some 60 percent of privately held businesses claiming to follow one-to-three year planning cycle.
That puts us way ahead of the global average (49 percent), equal to the UK and second only to Denmark (64 percent), according to the recent Grant Thornton International Business Report. But that doesn’t mean we should rest on our laurels, says the company’s local business advisory director Pam Newlove.
“There is definitely more room for New Zealand businesses to push out the planning cycle – only relatively small percentage scope out to between three and five years. In the South Island, the planning horizon for full one-third is less than year, and in the case of the North Island the comparative figure is 26 percent.
“While the current economic situation means that actions are needed to protect the business in the short term, new economic environment will eventually emerge and well-managed businesses with clear long-term strategies will prosper.”
Privately owned businesses in China turn out to be the longest term planners, with 44 percent of them planning more than three years ahead, while short-term planning is especially common in Latin America.
Pointers for those who want to plan ahead, says Newlove, include:
• Stress testing the plan with different scenarios to assess the effect of different market conditions;
• Analysing of worst-case scenarios (profit and loss, balance sheet and cashflow impacts);
• Developing contingency plans to enable flexibility;
• Examining competitors’ strengths and thinking how to exploit their weaknesses; and
• Communicating the plan and connecting employee remuneration and incentives to achieve objectives.