Make running a business fun again

Learn more
Sign in
Dynamic Business Planning
Written by John Hernandez03/28/2022

Dynamic Business Planning: Strategizing Growth for Your Small Business

Imagine you are on a train. You step inside, and you're ready to go to your destination. On the intercom, you hear the conductor say, "All aboard, we're ready to go. I'm not sure where yet, but let's follow these tracks and hope there's not another train in the way." Of course, you would run and try to jump off.

If you don't know where you are going, you could end up anywhere. It's dangerous and can often lead to failure. As business owners, we know the value of strategy and why it's essential.

Knowing where is critical but so is how. That's what a good plan does for us, and dynamic planning is an excellent method to adopt for your small business.

Fundamentals: What is Dynamic Planning?

Today, the world rushes through innovations, and budgets and strategies are too static. We can plan something for next year, but the need or investment is obsolete by the time we get there.

Dynamic planning focuses on short-term strategies influenced by ever-changing needs while still following the big vision of your company.

The best way to describe it is with two words: strategy and elasticity. We have a vision for the company; we plan short sprints based on what we learn and adjust as needs change. This reflects our budgets, culture, marketing, and all aspects of our business.

Dynamic Strategy

When you first develop your strategy, you have an ultimate goal. You decide where you want to go in x amount of time and what it will take to get there. It's big-picture thinking combined with the tactics needed to accomplish the vision you have for that timeframe.

Dynamic strategy is the same except that it recognizes that things change fast. Strategy is too static. For example, you could plan for a product release at the end of the year, but a new variant to a pandemic threatens the entire launch a month before. Perhaps it's a grand opening to a brick-and-mortar store. A static strategy wouldn't be prepared for this uncertainty. Business owners would take the loss.

A dynamic strategy would have foreseen these possibilities. The budget would not be static. Instead, resources would shift to a developing and already-existing dynamic investment that would aid in the company's growth like eCommerce and sanitary investments. It isn't a setback but a pivot on the need for the company in real-time.

Dynamic strategy influences your finances, team training, and all company operations. You have clear goals and objectives but realize things could change after analyzing results.

While you may have a long-term vision, dynamic planning requires revisiting your strategy in shorter cycles like every few months. Then, after analyzing data and needs, you make adjustments regularly.

Dynamic Elasticity

As implied with strategy, dynamic planning requires flexibility. Elasticity means we can stretch and make changes as needed based on our resources and market needs. Every level of the company structure should adopt it as a discipline and mindset.

Businesses should revisit their strategy often and reevaluate it. 2019-2022 have been perfect examples of why this is important. Things changed every few months: companies were forced to restrict operations during the pandemic, then they could open up again, only to restrict again a few months later. It required extreme elasticity for companies to survive.

The ones that thrived embraced dynamic planning through those obstacles and produced incredible innovations and new ideas that helped them grow for the future.

Dynamic elasticity requires your business to embrace change and make pivots when necessary. You are open to opportunities and well prepared to take them on in response.

The famous principle rings true to dynamic planning: Luck = Preparation + Opportunity.

We learn that what we perceive as lucky often has to do with the resources we invested in and our ability to take on a new opportunity when it presents itself. Preparation represents our dynamic strategy, while opportunity reflects our ability to adapt.

Questions to Ask Yourself Now

As you begin to evaluate where you are within the dynamic plan and your business, ask yourself the right questions.

Do I have a big picture?

Dynamic planning works in sprints, but you have to know where you are going first. Develop an end goal for your business through its different stages of growth.

Do I know where I am going?

Now decide what it takes to get there. You can set up tactics based on this and adjust as needed through dynamic planning.

Do we follow a plan, and are we eager to embrace change?

If you follow a plan now, examine it.

Is it in line with dynamic principles?

There needs to be room for evaluation and change. Then ask yourself if there is an eagerness to make that change. If not, you may need to invest in training and culture-building for you and your team to see it as necessary and exciting.

Dynamic planning provides an effective method to navigate quickly within changing environments. In the past, businesses knew they needed to get better to grow. Ten-year plans were the norm. But, as technology and outside circumstances shake industries within months, we need to get better, faster. Dynamic planning gives us the tools to do it.

Application: Inside Dynamic Planning

Traditionally, strategizing for your business would require a yearly meeting and hard work ironing out an annual budget. Then, you would stick to that budget and evaluate your results based on these original goals. It helped you stay focused and create accountability for your business and vision.

The world moves too fast for this to work. For example, you could plan on increasing revenue by 10%. Still, then a new product in the market threatens your existence, inflation hits hard, or a social media account that brought exposure is suspended for weeks because of a misunderstanding.

There are many circumstances out of your control, and your flexibility to respond and move your resources to the appropriate designation will determine how it affects your business.

Case Study: Peloton

Take, for instance, what happened with Peloton. On September 11th, 2020, CNN reported on the unexpected success of the fitness brand during the COVID-19 pandemic. Sales skyrocket 172%.

People stayed home, lived their lives, and worked in the house. They needed to exercise. Not only did the brand have home equipment they could use, but it also had a strong brand community that helped with the loneliness customers felt because of a decline in social activities.

Through dynamic planning, they were well prepared. A spike in demand and supply shortages were challenges, but they worked hard to create a flexible plan that embraced it.

They offered free subscriptions to their service for months, encouraging people to join the community. They cut the price of their most in-demand bike by 15% and added a higher-value product release. Then they planned to include a new lower-priced product.

If they were not ready to jump on the opportunity, they would have missed it. But they were still on a roller coaster of change. Finally, a short scene from a Sex and the City revival put the nail in the coffin. One of their characters died after exercising on a Peloton bike.

This problem led to a decline in stock value, and Peloton faced a PR crisis. So, again, they implemented dynamic planning. They hired a firm run by actor Ryan Reynolds to use the same character in a commercial.

The character is well and alive on a romantic getaway, toasting to new beginnings near two Peloton bikes, saying, "Should we take another ride? Life's too short not to." Then Reynold's voiceover states: "And just like that… the world is reminded that regular cycling stimulates and improves your heart, lungs, and circulation, reducing your risk of cardiovascular diseases. Cycling strengthens your heart muscles, resting pulse and reduces blood-fat levels."

The commercial went viral and gave the brand a much-needed boost. This quick thinking was only possible by analyzing the situation through dynamic planning and shifting resources to meet the needs.

Dynamic Mindset

When dynamic planning, businesses should strategize on shorter intervals. Instead of yearly or twice a year, consider quarterly planning or even reevaluating every month. You're better prepared to make flexible changes as you constantly review your strategy.

The best way to envision the dynamic method is by using Tim Berry's model laid in "Fundamentals of Lean Business Planning."

Dynamic Planning Model by Tim Berry

We learn about his model and cycle for lean planning:

  • Plan: We develop a realistic plan to meet our goals.
  • Run: We enact that plan and see it in action.
  • Review: We review the results and revisit our initial goals and expectations.
  • Revise: We make adjustments after learning from our review.
  • [Repeat] We continue with the cycle using the information we have.

(Eric Reis offers a similar model with The Lean Startup. We Build, Measure, and Learn.)

Tim's model emphasizes the difference and importance between reviewing and revising the lesson learned. He offers an effective way to build a dynamic planning structure for your business.

Putting Lean Dynamic Planning in Action

Now that we know what dynamic planning is, what's needed to apply it, what does it look like if we start tomorrow?

Consider dynamic business planning through the following:

Dynamic Business Planning in Action

1. Big Picture of Your Business

Establish your vision. Everything you do will be in the context of meeting this ultimate goal.

2. Day-to-Day Requirements

Identify the tactics needed to accomplish your goals. What habits, systems, and processes do you need to adopt?

3. Steps to Accomplish Your Goals

What tasks need to get done? Evaluate the steps necessary to get the best results. You might initially think of 30 things, but perhaps focusing on five high-value tasks will get you better results through the Pareto Principle.

4. Review Finances & Results

Does your budget reflect changing and growing needs? Review it regularly and adjust it to meet these shifts and opportunities.

5. Adjust or Continue

After reviewing your plan, decide what you can improve on through your lessons learned, and adjust. Continue doing what works and add room for experimentation.

Communication: The Key to Successful Dynamic Model

While you can adopt dynamic thinking for your business, it will not happen unless everyone adopts it at every level.

For example, if a janitor is trained in the mindset and believes in it, she could find opportunities typically skipped over. Perhaps she notices that productivity goes up when the office is less cluttered. Employees seem to work faster and work on their desks longer.

She presents this to you, and you work together to allocate resources for more cleaning and organization throughout the day. Consequently, productivity goes up, and so does profitability.

You can benefit from team input when you communicate your plan effectively, embedding it in the culture.

Present the Vision

Let your team know that you are introducing dynamic planning. Teach it to them. Give them the vision to believe in, like how a growing company means more opportunities for them too.

Give Your Team Room for Input

When you communicate the vision, open the floor to questions. Try to remember their concerns. These are pressure points that you can address and improve as you grow into the plan. Listen to their ideas and be open to experimenting with the best.

Create Maxims

Most people forget what's on a piece of paper. You could write out an entire page on expectations and what you want to do, but it doesn't translate to action. A key barrier is memory.

Create encouraging one-liners that represent the vision. These are more memorable and tend to penetrate through an emotional response.

For example, to encourage flexibility and how significant change is, you could often say: "We need to stretch before we grow." Then, as your team continues to hear it in a positive light, they will adopt that principle in their work.

Repeat It

Continuously repeat it through your words and action. Your team (and you) need to be reminded of expectations and your vision for the company. Revisiting and communicating the value of dynamic planning will become second nature.

Applying Dynamic Principles to Different Business Stages

Dynamic planning will look different for many businesses depending on the industry and the growth stage. However, the principles remain the same. Together, we can review what it may look like for two different business life cycle stages: established businesses and new businesses.

Established Business

The older your business is, the harder it can be to enact change. It's especially true when a new framework can redefine your organization. Lean thinking needs to be implemented from every level of the company.

First, review your goals from last year. Which ones did you meet, fail, or exceed? Going over what you've done in the past adds context, and you can better develop your new dynamic plan.Re-establish your vision and what it would take to get there. What does your idea of success look like? Put it in writing.

Once you know where you want to go and how to implement dynamic planning, present it to your team. You're dealing with different people depending on how long they have been with the company and their experience. For example, an intern, a veteran, and someone who's been working with you for less than three years will interpret your change differently.

The best way to get your team on board is by telling a story. It's the best way to unite everyone and give them an emotional connection to what you want to do. Your story could start with the origins of the company and your bigger-than-life dream for it. Then, you can explain what has happened since then and why there needs to change.

State the challenge you face today, then offer a new solution. Dynamic planning will allow the company to grow faster, make quick changes when needed, and empower your team to do the best job they can. Once your team is on board, use the Dynamic planning model to revaluate every operation and process within the company.

For example, let's say you review your customer service. You notice their scripts aren't as effective as you would hope.

So you revise them, plan how they will be delivered, test them out, and review them again. If you see better results and how it affects long-term sales, you could adjust your budget next quarter to reflect those discoveries and invest in more customer service resources and training.

Established businesses should prioritize communication, training, and review old processes to jumpstart their dynamic planning approach.

Newer Business

Things move too fast if you have a new small business or a startup. You're wearing multiple hats, and things feel like they could go out of control. It's an exciting time, but it's also scary.

When you implement a dynamic strategy, you prepare yourself for these ups and downs. As a result, your review intervals might look shorter-- even within weeks-- but constantly reviewing how you are doing and where your resources are going will help you grow in an ever-changing climate.

New businesses can test an idea quickly, learn from it, and improve it by adopting the dynamic planning methodology. The resources and investments directly follow the results. Through a tight feedback loop, new businesses can use data to improve as they grow.

Newer businesses have an advantage. They can build out their DNA from the beginning. If you want to adopt dynamic planning, now is the time to include it in your decision-making process.

Plan backward. Clarify where you want to go, and the steps needed to get there. By focusing on ONE THING, businesses can use their limited resources to become the best in their market. Build to be better, not bigger, and customers will see your value.

Empowering Your Team to Embrace Dynamic Thinking

We've covered the importance of communicating the vision of dynamic planning by now. However, without your team, it's impossible to implement the methodology.

If you make embedding the plan within your company DNA a priority, your team won't follow you; they will learn to lead with you. As they take the initiative, your leadership will grow beyond yourself, and the business can flourish.

1. Everything Rises and Falls on Leadership

Leadership expert John Maxwell famously states how outcomes all boil down to the leader. Success and failure depend on who is leading the helm. That's why the person in charge of implementing dynamic planning is critical.

Make sure your entire leadership team fully embraces the idea. If they hesitate to understand the vision, take time to walk them through it and help them see the value. If they don't get it, your team won't.

2. Make it a Journey

If your team is scared of failure, you won't see progress. Give them space to experiment. Dynamic planning is all about continuous improvements, and it can only happen when team members have autonomy in testing ideas. When there is a failure, it should be a lesson learned, not a disappointment. Taking a risk should be celebrated.

Train everyone in the company no matter the role. When everyone is on board, it forms a strong community and reaps better results on every level.

3. Invest in Resources

Equip your team to do the best job they can. Team members should have courses, books, and media rooted in dynamic thinking at their disposal. Teams should have the right software to collect and analyze relevant data to make informed decisions for the business.

4. Host an Annual Review

While dynamic planning emphasizes shorter intervals, annual planning is still necessary. It helps lead you to a vision, but it's not static in the context of a dynamic plan. At the end of the year, host a review with your staff.

It helps to have a document that records the reasons and thinking behind specific goals and metrics so you can fully evaluate results with context. Then, in a positive light, review the good and bad things and how the company responded through flexibility and perseverance.

Then state the vision for the next year and what new things employees can expect.

Adapting Your Business Model

Dynamic planning principles allow you to move fast and grow a healthy company. By reviewing your goals and results often, revising them, and adjusting your resources based on your findings, you can raise a company that withstands any challenge in the market.

Dynamic planning is a continuous improvement mindset put into action. Follow these principles to get started.

Great teams need great tools. There's nothing better for dynamic planning than Profit Frog, which lets you simulate ideas, study data, and make the best decisions for your company. Check out the free trial and see how dynamic planning can help your business.