Planning In The Age Of COVID

If you are the CEO of a startup or small business, the months of November and December are when you must be planning what you will make happen in CY 2021 — and, yes, there will be a Calendar Year 2021 whether you plan for it or not.

You should be following a discipline something like this:

Review 2020 performance — review and discuss with your senior folks with an eye toward segregating the loser from the winners, the saints from the sinners

Based on 2020 performance, create your 2021 plan with input from your senior folks

After a careful review, publish the “preliminary” plan and sit down with your Board to get feedback

Revise the plan

Publish the plan

Brief the plan to the company and get buy in

This can take two weeks or six weeks. It should be started in November, finished in December, and published before Christmas. 

All you can do is the best you can with the resources available including time and money. Do not beat yourself up. Just do it.

A few key thoughts

Here are some thoughts that merit your consideration:

 1. We are only at the end of the beginning with this COVID cockup.

Next week we will have a vaccine and begin vaccinating health care workers and other high risk potential victims. It is unlikely the entire country will be inoculated before June 2012.

Keep this date in your head at all times.

 2. I hate the term “new normal” as much as I do “spot on.”

We will return quickly — at the speed of light — to a more normal business environment though some changes will be permanent — as an example: the local restaurant industry will not recover, WFH is real and never going away, Zoom is going to eat travel.

 3. Give careful consideration to the pre-COVID v post-COVID environment for your company.

You may have benefited from/been crushed by COVID and you may have discovered and adapted operating protocols that will survive the return to some semblance of normal — such as less travel and more Zoom.

 4. Be prepared to re-forecast your plan quickly every 90 days in this changing time. Have your CFO (if you have one) make monthly mini-re-forecasts.

If y0u have never been good at planning, budgeting, forecasting, re-forecasting — now is the time to get good.

Never change the original plan or budget; change the forecast.

 5. Keep the Board informed as to what is going on. This is incredibly important if CY 2021 is a year you will need to raise capital.

If you anticipate raising capital, know where the Board stands, more importantly, if they have follow-on funds available and the temperament to deploy them.

Down round?

Resist the temptation to say, “I’ve got this,” even if you do.

Nobody saw the pandemic on the way in and nobody really knows WTF is going to happen as the vaccines are rolled out. Keep your own counsel.

Opportunity comes packaged in a cloak of change. Be ready with your plan, budget, forecasts. There is no such thing as over communication. Be an evangelist for the plan.

One big thing

In planning, a damn good tool for a growing organization is to use dollar weighted org charts.

Make a departmental/functional org chart and annotate which elements of the organization generate revenue and which ones consume capital.

Put in a layer of people.

Put a dollar value on every person (salary, benefits, short term incentive comp, long term incentive comp, something special) and total the cost of departments/functions.

Convert this to a spreadsheet that compares the cost to revenue so you can see the stark allocation of labor resources.

Do this for three months, six months, nine months, a year into the future for 2021.

If you are scaling hard, do this for the next three years on a time interval — say three to six months — that mirrors the rate of growth.

This is a planning tool that reveals the truth — everything costs twice as much and takes twice as long as the original plan.

Bottom line it, Big Red Car

This year — the plan for 2021 — is going to be the one in which those who plan will be the happiest. Discard your bad habits and get with the plan.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.

THE VACCINES ARE COMING. Line forms behind me.