As you likely know, forecasting is an integral part of what we do at SRC Holdings Corporation. We come together twice a year to create a plan of what our organization will look like one year out, five years out, and even 10 years into the future. This is where our organization can, according to the legendary business writer Jim Collins, identify its BHAGs – or big hairy audacious goals. Whenever we wrap these meetings, there’s almost always a sense of euphoria among us: “Wow! We are going to accomplish some great things together!” It's incredible to see everyone excited about where we’re headed together and what we plan to accomplish. But I want to push the pause button here for a minute because this is where a lot of organizations get tripped up. Putting your targets out there isn’t the conclusion. It’s just the beginning.

Every day brings a confusing mix of news about the economy. It can be tough to gauge how things are trending. Just when things look like they might calm down enough for everyone to get back to business, a trade war escalates or economists decide to lower their forecasts for future growth, or most recently a pandemic hits. It's interesting that when 60 economists where surveyed by the Wall Street Journal they expect the next downturn in either 2020 or, more likely, 2021. I guess they didn't foresee the pandemic either or they might have leaned more heavily on the 2020 wager. Now that you have weathered the shock of recession caused by the pandemic, all this turmoil should serve as a kind of alarm—a red alert to take action. If times are good in your business right now or in the foreseeable future, you should be putting plans in place so that you’ll be able to handle the next inevitable downturn to come, which historically happens about every 10 years or so. That’s where playing The Great Game of Business® can help. Here are four tips on how to prepare your organization to handle future turmoil:

A few years ago, the Wall Street Journal ran an article about a practice called “Zero-Based Budgeting,” which is basically a cost-control process that was being embraced by big-name companies such as Heinz, Kraft, and Burger King. The idea is that companies don’t roll over budgets from year to year, but they have to make a case for new spending plans each year. This philosophy wasn’t new—Texas Instruments experimented with it a few decades ago—but it seemed to gain popularity with investors interested in keeping costs under control. That was especially true when it came to the Kraft-Heinz merger. But things apparently haven’t worked out.

For many years, when I would speak with Jack Stack about implementing the Great Game at my company, imageOne, I was usually explaining to him why it wouldn’t work for us. “We are unique,” I would explain to him. Jack would just snicker and shake his head. I remember those days vividly and now I know that he was right: business is business and the Great Game works for thousands of companies - why would mine be so different?

Co-authored by Scott Ogeka Without employee engagement, strategic planning can deliver questionable results. This sentiment often exists because companies lack a simplified process and a buy-in from informed employees. High-Involvement Planning is a key element of open-book management at SRC, West Paw Design and many other companies. This process does not require an outside strategic planning consultancy to help your company; instead it is a planning system that works inside the company.

At SRC, we just wrapped up yet another sales-and-marketing meeting, something we hold twice a year as part of our High-Involvement Planning (HIP) process. The whole thing blew me away. Not only was I amazed at how much information we can generate about our business through this process, I was also struck by how good our folks have become at presenting and articulating the reality of their businesses.

If you're a business owner, I strongly urge you to budget for a reasonable profit target as a percent of sales, and then make your expenses fit in. The idea is to put profit front and center as a necessary outcome ... to make it happen on purpose, rather than let it happen by accident. Now, let's build on that idea. First, what is a reasonable target for profit before tax? It varies by industry but I suggest that most of us should be able to shoot for 10% of sales, pretax.

Every business leader / owner I know has too much to do. That is particularly the case in the fourth quarter of each year. The challenges include, but are not limited to: The ongoing need for solid short-term improvements to finish the year strong. Get an inclusive business planning process in place for next year. Tax planning to minimize taxes for the current year. Take care of personal / family commitments that tend to expand during the holidays. The fundamental challenge is between the short term commitments and the long term priorities, or as Stephen Covey put it, sharpening the saw versus sawing. If you are sharpening the saw, you are not sawing, so the short-term production suffers. But if you don’t sharpen the saw, longer-term production suffers. Neither choice is very attractive.