Planning is the process of developing courses of action to move from your current state to a desired future state and involves change, and everyone knows, people don’t like change. We hear it all the time and it’s true, people don’t like change! But have you ever stopped to wonder why people don’t like change? In his book Your Brain at Work, Dr. David Rock takes this notion further and proposes that it’s uncertainty that actually makes us uncomfortable. If we can reduce the uncertainty associated with the change, we can significantly reduce its negative impact and increase engagement and uptake. The way we try to reduce uncertainty and gain control of the future is through planning.
We all like to be in control, but our inability to predict what’s going to happen in the future limits our feeling of control, and the further we look into the future the greater the uncertainty and lesser the control. Hence, our natural inclination is to try to predict the future and develop plans that allow us to prepare for whatever it’s going to throw at us.
We do this through planning and forecasting, but how many times have you been involved in planning and forecasting activities where the degree of uncertainty was so great that you knew in your heart that your plans were little more than an optimistic guess? This is especially true when the plans or forecasts being developed are very long term such as three, five, and ten year plans.
So why do we placed so much importance, emphasis, and time on long-term plans and forecasts when we know that it’s unlikely they’ll hit their targets? Well, the answer may be embedded in our brains and the way we think.
Every time we reduce uncertainty we receive a hit of dopamine. Dopamine is the chemical used by our brains to derive pleasure and just like ticking off a checklist is rewarding and pleasurable. So is fooling ourselves in the belief that our planning and forecasting will somehow create certainty in the future.
There is no real ability to plan long-term or truly forecast based on any single view of the future. But business continues to try and reduce uncertainty and give confidence to senior executives, boards, and shareholders by investing significant time and money in this type of planning.
The perception that planning and forecasting have been performed effectively provides a degree of comfort and is in a way a placebo that lasts a whole financial year or for the period covered by the plan. So, if planning and forecasting are little more than adding 5 or 10% to last year’s results and are not truly representative of the future, why should we bother trying to plan at all?
Well, it’s not all bad news. Whilst the future is uncertain and your plans and forecasts are based on your perception of what the future holds, there are ways that you can plan for an uncertain future and reduce the anxiety associated with uncertainty and your lack of control.
Planning and forecasting should be done for the shortest period possible. Longer-term planning must be broad and allocate low confidence levels and large margins for error and must factor uncertainty into the planning process.
These plans need numerous decision points that take a “what if” and “if then” approach. The best way to do this is to take a multi-varied view of the future. The further into the future that you try to plan, the greater the uncertainty and variability.
Understanding this means that you cannot simply plan for one future, but rather you need to plan for the various possible futures likely to eventuate.
For this reason, scenario planning offers the best approach and uses uncertainty to influence thinking and the planning process. Scenario planning unlike traditional business planning requires the planners to consider different views of the future and develop appropriate courses of action for each view.
As we move along the timeline and the future becomes clearer, we can adjust our courses of action as required or even change to a planned alternate course of action without feeling like a rudderless ship that is out of control and at the mercy of the sea.
For more information on how to develop effective plans, check out our post titled Planning Process.
