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Our subject for this edition of the Playbook Podcast is business planning. It’s December as I write, and one way or another pretty much the whole industry has part of their brain focused in that area.
If your financial year starts in January, by now you’ll hopefully have set your focus across all the teams in your organisation and be ready to go on the ‘B of the Bang’. If it’s April, you might have run a few sessions with your team and tested the water with shareholders – maybe even submitted some initial numbers to them. It’s a fluid process that often requires more than a little agility on behalf of the chief executive!
For this episode I was joined by Louise Johnson, the chief executive at Fuse. Fuse is part of Omnicom Media Group and provides marketing and commercial services for brands and rights holders specialising in partnerships and experiences in sport and entertainment. The business has a team of over 100 in the UK and 250 across Europe and the Asia-Pacific (APAC) region, working with some of the world’s top brands, including PepsiCo, McDonald’s, Nissan, Enterprise, Carlsberg and Vodafone, as well as rights holders such as Formula One through its recent agency extension Fuse Ignite.
I asked Johnson on specifically for this topic because of the scale of the business planning she has each year. Not only is she balancing the need to engage a talented, multinational employee base, but also plan in a way that works for her parent company. I know from going through the same process within WPP that’s not an easy balance to strike.
We had a very rich conversation you can listen to here – but as usual here are the three things I took away.
Strategy leads the numbers, not the other way around
It is very easy when you are building a business plan to start with the numbers you hope to achieve. The problem with that approach is that it can stop you considering the areas of your business – team retention, brand strength, customer conversion rates, for example – which will actually enable the financial result and may actually be more in your direct control.
Financial targets are outcome goals which should come as a result of the areas you are focusing on day in and day out – known as the process goals. Focus on the process goals and the financial outcome should take care of itself.
This framework is used widely in sports psychology – brilliantly described here by former Olympic swimmer-turned-coach Lizzie Simmonds: “Want to be the best swimmer in the world? It starts tomorrow morning with your application to your training session, your attitude towards your team mates and your interaction with your coach. It involves being smart with nutrition, developing psychological resilience and tactical experience. It comes down to taking ownership of the choices you’re making on a day to day basis.
“It doesn’t mean just writing down on a piece of paper that you want to be the best swimmer in the world, and then hoping for the best. The process is the set of steps that will create the outcome.”
The other challenge with focusing on the numbers is it can also mean the planning process is too insular and fails to consider the changing external environment – changes in customer needs, the approach of your competitors and so on. This is very dangerous – many businesses have been caught focusing on a percentage point margin improvement while a competitor has shifted the competitive environment completely.
Neither of these are traps that Fuse falls into. Johnson’s business planning process is far more comprehensive and driven by the external environment as much as internal feedback.
“We start in July although we don’t need to submit a plan [to Omnicom] until January,” she explains. “We hold a board awayday looking at where we are as a business and where we need to get to based on market trends, what clients are asking us for and what we’re seeing from the competition as well. We also ask what’s gone well and what hasn’t, where we’re profitable and where we aren’t.
“Ahead of that we also do a bunch of interviews with our clients as well. Just a quick phone call with five questions – things like what keeps them awake at night, what they think of Fuse as a business and where else we might be able to help. That’s such useful information for us.”
Work on the annual commercial plan begins a couple of months after the offsite, with a first cut presented to Omnicom in October. The strategy drives the numbers, rather than the other way around.
In a nutshell: Look outside as well as inside your organisation when you plan. Think process over outcome.
Fuse works with top brands such as Japanese carmaker Nissan
Real change happens over more than a single year
While Johnson is very focused on managing her business through the single business planning year – “we have a well-oiled machine,” she says – the fast paced and very cyclical nature of it can be both unrelenting and at risk of missing the wider opportunity.
“I always felt you got to the end of the year,” she continues, “and you think, ‘oh, thank goodness’, and then you get to 4th January and it’s ‘here we go again’. That doesn’t help longer-term strategy…or understanding what we’re trying to grow towards.”
To offset this, Johnson’s team also now build a long-term strategic plan – “where we want to be as a business in three years,” she explains – to help them see the single year’s plan in more context.
The biggest risk of big strategic plans (and I say this having been a strategy consultant in a former life!) is that they can quite quickly gather dust on a shelf. Johnson manages her own time in such a way as to ensure this doesn’t happen, scheduling “golden time” for herself to think about “what’s my long-term plan, what are we delivering not only for this commercial year but also our long-term ambition and vision? If you don’t think about that then you’re not going to evolve the business.”
That’s particularly true in areas like operational effectiveness which, as Johnson says, “can’t always happen as quickly as one year”. Really committing to long-term strategies like this this also relies on hard-wiring them into the DNA of the business and the daily lives of team members. Fuse makes sure it captures the language and spirit of the three-year strategy into the performance development plans of each employee.
In a nutshell: Build a longer-term strategy alongside your annual plan.
SportsPro senior contributor @mattrogansport talks to Fuse CEO @louisejohnson1_ about how to approach business planning in a testing and fast-moving environment.
— SportsPro (@SportsPro) December 16, 2021
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Consultation is a constant
While the initial output of a business planning process might be a document to submit to shareholders or a presentation to the parent company, focusing on that output alone can mean you miss much of the opportunity involved in consultation – not only creating buy-in initially, but also continuing to vest team members, clients and so on in a deeper way with your business to last long after the plan has been submitted.
Fuse management work very hard internally to make sure that employees are vested in both the plan development and execution. For example, working with members of individual leadership teams to bring alive the board’s overall direction in their individual business pillar.
They also present back to the company every quarter around how the business is going against the plan: “What the strategy is and how we’re delivering against that – not just in terms of financials but product development, new business conversion, marketing and so on,” Johnson explains.
There is a real culture at Fuse of “trying to be as transparent as possible” across the organisation in informal settings, too. For example, Johnson shares the goals her boss holds her to with the entire business. Board members also open their diaries for weekly one-to-one sessions where team members can ask anything they wish about the business. That provides “quite useful reverse mentoring opportunities” to understand the business from the ground-up, according to Johnson, who asks herself at the end of that session: “What can we be doing more for you, and what can we be doing more for the agency?”
The dialogue process also continues with clients through the year, having kick-started their planning process as part of the preparation for the July offsite.
“We find January is a good time to check in with them – how things are going for them, and to update them on the progress in our own strategy specifically as it relates to their own account team,” Johnson says.
In a nutshell: Use the planning opportunity to vest all stakeholders in the business year-round.
Ten words or fewer
Johnson managed to sum up the main messages from her podcast in her allocated ten words, going for: “Plan for the future but understand a business can change.”
This marries together the critical need for a structured and effective planning process, balanced with an agility to notice and react to changes in the external market. Fuse’s collaborative approach ensures the business has many eyes wide open on its behalf.
You can learn more about Fuse here and find Louise Johnson on LinkedIn.
Matt Rogan has spent his career creating and scaling businesses in the sports and entertainment arena.
If you’ve feedback to offer or other themes you’d like covered in future episodes of the Playbook Podcast, then please do get in touch via email.
If you would like to learn more about Matt or find out more about his book All to Play For you can visit mattrogansport.com.
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