As turbulent economic conditions are demanding much shorter planning horizons, business agility is becoming a critical success factor for organizations of all sizes. But that increased responsiveness needs to be backed by strong leadership and a clear vision of how to address challenges and opportunities.

That was the forceful message at the latest Fujitsu Executive Discussion Evening, where keynote speakers Dido Harding, chief executive of UK-based telecommunications company TalkTalk, and James Woudhuysen, professor of forecasting and innovation at Leicester De Montfort University, addressed the question: “Is it time to abandon the three-year planning cycle?”

As a relatively young, fast-growing company that has gone from zero to more than four million customers since 2006, TalkTalk doesn’t have the legacy of that traditional three-year business planning cycle, explained Harding. She likened the business to a “teenage octopus” because its fast growth, which came partly organically and partly through acquisitions such as Pipex and Tiscali UK, has left the company like “a gangly teenager not quite in control of its arms and legs.” The challenge for planning TalkTalk’s future is to help that “teenager” grow up without losing the passion and entrepreneurial zeal that is a cornerstone of its success, she said.

Helicopter leadership

Fundamental to agile planning is self-assured leadership, according to Harding. She referred to this as “leading from a helicopter” — in other words, taking the broad, high-level view and dropping down into the detail only when necessary. “In the course of the last two years, we’ve gone from a company that had a 500-page medium-term plan to one that now sits on five pages,” she said. “It gives us ample information to shape next year's budget and enables us to come back and look at it all the time."

Referring to her time at Tesco, where she held a variety of executive roles, Harding explained the UK-based retail giant’s approach to long-term planning was entirely top-down and involved only 10 people. “For the CEO, that is the key ingredient and no amount of bottom-up analysis is going to give you that high-level vision,” she said. “You have to make a judgement and decide where you want the organization to go.”

That is backed up by the results from Fujitsu’s “Fit to change” survey of 250 C-level, non-IT executives: 97% of private sector and 91% of public sector respondents said that strong leadership is the key ingredient to guiding firms through change.

In practical terms, Harding outlined what she believes are the main elements to building an agile business plan for the future. The first, she said, is that a compelling vision is more important than a detailed financial plan. “You need to give people an underlying sense of purpose to help [employees] execute any plan,” she argued.

Second, following on from the sense of purpose, is the requirement to give everyone in the organization a clear and consistent direction to achieve that. At TalkTalk this medium-term plan is referred to internally as its “wheel of fortune,” where the organization sums up in one page what its underlying competitive advantage is and what its medium-term targets are. “When we pull together our budget and our medium-term plan we do it around each of the elements of this wheel, and we've done that now for 18 months,” explained Harding.

The third ingredient for being able to change rapidly is to have the facility to translate that underlying sense of purpose and clear direction into a very simple set of top-down numbers. Harding said: “The bigger the company you are, the bigger the organization that you have, and the more people and layers there are between the leadership and the frontline the more important it is to keep the plan simple enough for everyone to be able to understand it.”

Her final piece of advice for business planning was “don't put it in a drawer,” but keep it out, continually review it and use it as a reference guide — dropping down into the detail as necessary.

Short term versus long term

One of the big challenges for business planning is balancing the short-term, more tactical, issues against the longer term, more strategic vision, Professor James Woudhuysen highlighted at the same event. “You've got to be short term and long term,” he argued. “You've got to have a close-up vision in terms of the next few days and then all the mediations between that and your five- or 10-year plan.”

Harding agreed, saying: “For my business, in some ways three years is a very short time, and in other ways it’s a complete lifetime. I need to be able to flex elements of my plan on a daily basis, other elements on a monthly basis and other elements probably once a decade.”

Figures also point to a link between research and development (R&D) and innovation leading to increased agility, Woudhuysen argued. He highlighted a list of global companies with their R&D spend broken out as a percentage of revenue, showing those who invest more in innovation are better performing and better able to adapt to change. “Build some more R&D, and build some more forecasting if you want to be agile,” he advised.

Although there is undoubtedly an accelerating pace of change in the business environment today, Woudhuysen also argued that this shouldn’t automatically lead to concerns for the months and years ahead. “The fear of the future, the sense that everything is so fundamentally uncertain, is what prompts some people to discuss agility today,” he said. “But the future is not as uncertain as you think. Agility is about making good, risk-taking, ambitious Chinese, Korean or Japanese-style innovations in both the short and long term.”

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