4 Ways to Build Resilience into your Annual Business Planning Cycle

Updated: Oct 20, 2020

The annual business planning and budgeting cycle can be challenging, time-consuming and enervating. Companies kick off their annual plans mid-year, long before the effectiveness and accuracy of the current year plan is known, or clear views of the following year are created. Once the annual plan is set and approved, there are re-frames and resets and refreshes as the year progresses. It’s critical work but not the most fulfilling.



The annual business plan is always a challenge and this year, even more so. The COVID-19 pandemic has impacted markets, supply and demand, and pricing tremendously. And, the uncertainty going forward – whether there will be another series of shutdowns, whether the economic recovery will be U-shaped or V-shaped or W-shaped – makes business planning and budgeting for 2021 challenging. Uncertainties abound, yet the plan must go forward.


“By failing to prepare, you are preparing to fail.” Ben Franklin

Executives tell me that some of the biggest challenges they are facing in their annual budget planning process this year:

  • Complexity. “I’m doing different budgets for different manufacturing and legal entities then trying to match it to global market strategies that are sliced differently.”

  • Uncertainty. “My supplier asked me for next year’s numbers to start building their plan. I just chuckled and said “It’s a guess based on how this year turns out.” There’s just too much uncertainty.”

How do you overcome those challenges? Build resilience into your business plan.


The Oxford dictionary defines resilience as “the capacity to recover quickly from difficulties; toughness.” A resilient business plan is one that adjusts and adapts, allowing you and your business to recover from challenges and difficulties, and set a course for success.

1. Anticipate Failure / Plan to be wrong. One thing that is certain, your projections and plans have a high probability of being wrong. Most years, those projections are off by a just a small amount and you have early indicators that allow you to adjust. As 2020 showed us, that’s not always the case. So, get clear on your assumptions AND what you’ll do when markets don’t turn out the way you anticipated is critical. One option is to build a simplified form of scenario planning into the annual planning cycle, to help your team think through options and possibilities, before landing on “the plan”.

2. Build some cushion in your supply chain. As many companies found in 2020, super-lean and long (distance) supply chains leave little room for uncertainty. When your primary objective is to reduce working capital, a lean supply chain, with low inventories and few suppliers can seem like a good idea. However, when volatility and geographic disruptions are introduced, those lean supply chains can leave you in a real bind and ultimately cost significant $$ in lost sales. (Case in point, the vast number of supply outages due to products not being produced or simply being stuck, when COVID-19 hit China and shut down factories and supply chains in Q1.) To build resilience into your business plan, build some cushion into your supply chain and inventory targets.

3. Embrace challenge. Embrace and encourage challenge, dissent and differing opinions in your business planning and budgeting process. Often, we just want to rush through the annual planning and budgeting process, moving on to “more important” things. And, in doing so, just accept targets and numbers without questioning them. To build a more resilient plan, embrace and encourage challenge. This will increase understanding and buy-in to your plan and make it stronger.

4. Identify signals. Know your signposts and early indicators and have a plan for monitoring them and then making adjustments. How often have you said or heard: “Looking back, I should have recognized…” Hindsight is 20:20, but foresight can be as well. As part of your planning process, identify the signposts and indicators that will let you know whether your plan is on-course or going astray. And make a plan to utilize them.

As you progress your annual business planning and budgeting cycle this year, plan for resilience.


Progressio Global helps chemical companies accelerate business results by closing the strategy-to-execution gap. Are you a chemical executive who wants to ensure your business achieves great results in its business strategies and plans? Set up a complimentary consultation to discuss how Progressio can help your business.