Recently updated on August 28th, 2024 at 10:00 am
“Plans are worthless, but planning is everything.” – Dwight D. Eisenhower.
It is all good and well to have defined goals, targets and budgets, however, the world is not a closed system and contingencies are often required to adapt operations to meet changing circumstances. Unforeseen changes are a fact of life and how we deal with these alterations directs the path moving forward.
For businesses the typical procedure of setting budgets to guide growth is arguably more of a hindrance to growth than a source of help. In the world of 4IR rigid structures can be an obstacle to growth and economic resilience. The ability to capture and interpret market data in real time has given businesses the opportunity to respond to economic pressures quicker than ever before. Not utilizing this capacity is a fundamental flaw in many business operations.
The question becomes: can you budget for shifting consumer demand? To set a fixed budget is to tie your team’s ankles before asking them to run a race. By opening up the fluidity with which budgets are arranged companies can be agile enough to respond to dynamic consumer demands in their given market. Customer behaviour can change quickly and a company’s ability to respond to these changes quickly, can be the difference between success and failure.
The organisational goal should be to integrate the work of the financial department and the marketing department. The present-day marketing department, equipped with the correct tools and knowledge, has the ability to make a measurable impact on business performance, which means it is best not to view it as a cost centre any longer. When marketing is seen as a fixed cost it is often reigned in at the first sign of uncertainty. However, by capping marketing budgets a CFO may place an artificial limit on growth. If marketing can show that it is possible to unlock growth without taking big risks the financial support should be forthcoming. Low-risk short-term experiments can potentially be scaled into always-on strategies.
The ability of a company to keep up with shifting consumer demand requires the organisation to treat planning and budgeting as a daily collaborative exercise rather than “a siloed annual event”. Flexible budgets allow marketers to answer shifts in consumer demand and maximise the value of every conversion.
An effective example of increased growth achieved through the adaptability of the planning and budgeting process can be seen with regard to Etsy.
To find out more about how your business can become more adaptable to drive growth and economic resilience get in touch with our team.
