Business Plan Facilitation
It's an old adage in consulting circles with regard to deep structure, that the less a consultant knows about a situation (surface structure), the more value he can bring to the table. While this looks like a good excuse for consultants to be ignorant, we believe that there is a lot of truth in this adage when it comes to facilitation.
Business plan facilitation is the planning, chairing and summarising of internal meetings on strategy, budgeting and forecasting, where the output is one or more budgets or forecasts.
Business plan facilitation helps our clients to develop more robust budgets, and to produce coherent cash flow forecasts for use in valuation models, but one of the its most important benefits is that it can provide alternative ways of achieving budget and forecast targets. Budgets are usually well out of date by the time the budget period begins, and a process for continually monitoring and reacting to circumstances is more necessary than ever in today's uncertain environment.
If real options reflect the value of being able to change decisions in the light of new information, and strategy is a portfolio of real options, then the budgeting process needs to incorporate not only monitoring capabilities for recognising when key business assumptions change, but also appropriate proactive measures when they do change.
In recent months, we have heard a lot about "war games" with respect to a break-up of the euro, and it is hard to believe that many organisations would not have already factored this into scenario planning exercises long before 2011. This is not a Black Swan, because it has been a possible scenario ever since the inception of the single market in the early 1990s and the euro was launched in 2002.
Option theory and simulation are useful tools, but nothing beats a generative facilitated session with senior management for bringing the unspeakable to the surface, and working through the resulting scenarios. Although business plan facilitation can be carried out internally, a knowledgeable and independent external facilitator is more likely to speak the unspeakable, and to ask the "dumb" questions than an insider.