Tired of the fourth-quarter rush? Perhaps it’s time for different business planning.
Uh oh, it’s that time of year again. The time when two dissimilar, but ultimately related, activities take place in corporations, large and small, across the globe. We are in the fourth quarter – the period when if it is going to happen, it must, and the period when planning for the upcoming year takes place. And while these two activities require all hands on deck, they also demand very different skills and mindsets to pull off.
The first, more kneejerk activity is the business equivalent of a “Hail Mary,” whereby a firm books and ships anything and everything humanly possible to make the year as successful as promised to shareholders, bankers and myriad other stakeholders who hold management accountable. Yes, this is the make-or-break, if-it’s-going-to-happen-it-must-happen-now, let’s-impress-the-world moment. Regardless of business location, size or niche; regardless of language, customer base or employee profile; regardless of everything, I have never seen any company in any industry that does not put on a fourth-quarter press in some way or another.
Doing everything possible in the last quarter to pull off a great year must be a result of the brain’s right side gaining control and trying to overwhelm its analytical left side. Pulling off a Hail Mary requires an emotional, adrenaline-charged effort that brings out the free-spirited entrepreneurial talents of most organizations. Ironically, it often is the low emotion, analytical accountants and finance folk who best put the emotional “you gotta” fear into their passionate sales and operations colleagues.
There is nothing wrong with making things happen, of course, and in a “job shop” industry that must react to customer schedules, part of the basic blocking and tackling of business is hustling to make sure facilities are operating at a reasonable capacity, and order backlogs are reasonably full. Hopefully, good planning and prudent management should eliminate or at least drastically reduce the need to pull off the annual fourth-quarter miracle.
Which is where the second big activity comes into play. Every fourth quarter the same herculean folk who are pulling off that last minute Hail Mary are also attempting to engage the left sides of their brains in the annual ritual called Business Planning (aka, developing next year’s budget). This activity requires a very different mindset, a calm environment to research, discuss and think, and a clear mind to think through all the ramifications, so they can commit to revenue-generating action plans.
Some companies, usually larger entities, separate business-planning activities from the operational ones by having a separate planning department. Having worked in such an environment, I am not sure it makes planning better than when operations personnel lead the charge. Dedicated staff may have the time to dot the i’s and cross the t’s, but their lack of operational knowledge too often leads to goals and assumptions that just aren’t reasonable benchmarks. For smaller companies or those that choose to have operations folk prepare the annual budget, the major obstacle is trying to keep their fourth quarter “I can do anything” gusto in check, instead assuming the hard role of being pragmatic.
Everyone loves to consider “what if,” so in planning, one of the most important aspects is to be prepared for what could happen. Yet with the fourth-quarter Hail Mary so much a part of the corporate DNA, it seems the one thing not thought through is, “Can we find a way not to need the fourth quarter Hail Mary?”
Which is what business planning is all about: thinking through opportunities and challenges to take advantage of the former and reduce the negative impact of the latter. For any organization frustrated by a reliance on fourth-quarter “do or die” efforts, and all the collateral damage it does to business as usual, perhaps this year’s business planning should include a serious look at steps that could be taken to better balance the year.
Meanwhile, back on the shop floor where all hands are prepping the ball for the soon-to-be-thrown desperation pass, maybe the approach should shift to ask, “What could have been done earlier in the year to make the end of the year rush less necessary, and what actions that make the fourth quarter successful could have been employed earlier in the year to achieve similar results?” By simply communicating to those in the planning process – even if it is just communicating from the right side of your brain to the left – how to eliminate or reduce the end of year (or any other seasonal) rush, or create demand earlier in the year, it may be the end of the year is less hectic and more predictable. Better yet, the early portion of the year may become busier and more profitable.
This time of the year we must focus on many things. One should not be taking the extraordinary effort pulling off a miracle to make a year that could have been avoided if better planning had taken place earlier. And, if you invest the time to plan ahead, learn from the annual fourth quarter sprint; perhaps there is action to take earlier that would reduce the reliance on the fourth quarter Hail Mary. At the end of the day, scrambling and planning are related!
firstname.lastname@example.org. His column appears monthly.is president and CEO of IMI (imipcb.com);