3. As a final example, preparation is also key in times of uncertainty, said differently, the business landscape is ever-changing, thus each businesses is left susceptible to exogenous threats that are sometimes out of its control.
Take the financial industry for example, when the Voelker Rule came into effect during the summer of 2015-as a response to the 2007 financial crisis-banks were no longer allowed to trade financial assets using the cash on their balance sheets; in other words, proprietary trading was prohibited.
Now, proprietary trading was where the big banks earned the majority of their revenue, but with it outlawed they had to find other sources of revenue and efficiency.
The major banks all prepared for these new regulations and as a result they looked towards enhancing their wealth management divisions, cutting costs in investment banking divisions and sales & trading divisions.
The future is never certain therefore having the ability to effectively plan and prepare for the unexpected can put a business in a better position to withstand any negative headwinds. Preparation can be seen as the core elements that enable a business to be able to successfully execute its plan.
These core elements can be people, technology and most importantly processes. A plan helps a company to prepare and preparing helps in the execution of a plan.
A vital aspect of preparation is that it gives valuable insight or information for planning. Preparing and the research involved in hiring employees will give valuable financial information to the business owner. This new financial information perhaps dictates that a plan needs to change.
In summary like Olympic athletes business owners need to plan and prepare.
Their planning cycles are typically less than those of Olympic athletes which plan for a four year cycle. What they do share in common is the need to prepare in order to be successful. This preparation will involve building the core processes, adding the right technologies and people leading to a successful execution of a plan.
This article was co-authored by Greg Devaux.