The new year is a frenetic time.
There are new projects, new mandates, new initiatives and new goals at every company. This rush of work is sometimes complicated by the number of people abstaining from their usual tipple in the name of Dry January.
As a business leader, I'm forced every year to take stock of the course of the year ahead. I, like so many marketing professionals, need to create budgets and plans that cover the calendar to come.
The first part of this exercise is relatively simple. It is not too hard to set goals for the immediate four weeks or even the following quarter. Beyond that things get tricky. There are meaningful events and items that can go either way. For individual businesses that might mean the completion of an acquisition or a big new deal.
Looming this year are several macroeconomic events that have the chance to re-shape the back half of the year. Nikoloas Panigirtzoglou at J.P. Morgan Securities told the Financial Times this month that the financial markets are currently pricing in a 60 percent chance of a recession this year in the States. The consequences of a messy Brexit deal threaten to spill across the Atlantic. A lingering government shutdown threatens to put a pause on business growth.
This is a knotty problem for the marketing executive. Should you commit funds for a large advertising campaign in the third quarter? Is it O.K. to attend the large expo in November? Many times these decisions have real consequences if they are reversed, including development costs or non-refundable deposits.
Consequences also come with inaction. The board of directors and CEO will not be pleased at a marketing department that failed to take advantage of a positive business environment – unemployment remains at four-decade lows in America – because of a risk that never materialized.
Circling the square
My advice for planners is to look at multiple futures. Know the limits of your predictive abilities.
Rather than taking a definitive, one-size-fits-all approach to the year, divide the calendar into parts. In the first half, create specific goals with a high degree of certainty. Later on pair more general with what may happen if a major event does or not happen. What's the best case scenario? What's the worst case scenario?
The benefit of this approach is that it can help the all too often occurrence of having to re-plan (and sometimes re-re-plan) in the middle of the year. When things clear up, it is easier to take the rough thinking done in the beginning of the year and apply it.
Don't assume every day will be like the first week in January or the last month of the year. Think about all the different factors that can shape your year.
Here are a few easy ones to forget:
- Foreign exchange risk: How will shifts in the economy impact costs?
- Personnel risk: Who may leave or join the organization?
- New technologies: How may key platforms evolve?
- Emerging companies: Do you know of people who may enter the market?
- Partnerships: What might come together?
I am sure the year ahead will bring surprises. With smarter planning, we will better prepared to navigate whatever bumps we encounter along the way.
Vivienne Hsu is Cognito’s international managing director