The Importance of Planning - Thoughts on the Government’s ‘Mini Budget’
“Fail to Plan, Plan to Fail”
Dashed Hopes
A month ago, for many people, it was refreshing and perhaps comforting to see a new British Prime Minister and her Cabinet that looked serious, stable and that had a plan. There was concern about possible new tax cutting policies at a time of global economic and geo-political uncertainty, but it appeared that thought had been given to selecting a coherent team that would work with the leader’s intent and be trusted to get on with delivery. Given the poor behaviour of the previous administration, this was a welcome and encouraging sign. We could have perhaps looked forward to clear, objective thinking, where the Cabinet would all contribute to executive decision making, debating the consequences and risks, advising their leader on the strengths and weaknesses to any plan. The unexpected ten days of national mourning for Her Majesty the Queen may also have given them more time to work and modify their plans, with opportunity to obtain more of the facts from the machinery of government that they now commanded.
The Importance of Planning
As it turns out, it appears that little sensible planning has gone on. When one says ‘sensible planning’, this would involve forming a cohesive team (a Cabinet and MPs in agreement), inviting in experts, financial modellers, senior civil servants and key stakeholders to be part of the decision making process. It might start with the team asking themselves “What do we want to achieve and why?” (which would, for example, have ruled out the 45p tax band removal policy). It would involve gathering the known facts, identifying the unknowns and understanding the detail of the current situation (and crisis) so as to be ‘situationally aware’, ready to define the problem. It is only once you have defined the problem and understood a situation for what it really is that you can then attempt to go through the ‘So whats?’. Only then can you begin to make deductions, list constraints and opportunities, work out options, understand consequences, identify and quantify risk and then ultimately come to a decision. Even once a decision has been made, there is still time to test the decision for its validity, to air the decision amongst those who will be implementing it or have to support it. The decision can be honed, rehearsed, updated and run against perhaps new evolving circumstances in dynamic situations.
Dealing with Complexity
It is now clear that little of this analysis was carried out for the 'Mini Budget' of 2022. If there was a plan, it was an outdated vision, possibly suited for an economic scenario before the global pandemic and energy crisis, in what we now might call ‘normal times’. It was certainly not tested for today’s unique and complex times. Complex problems require deeper analysis and more investigation before committing to decisions. This new core leadership team, driven by strategies that bore little relevance to today’s complex situations, nor totally supported by their wider team of MPs, contrived a plan in isolation. What they perceived to be a bold and ambitious plan that would be well received, has turned out to be reckless and something that is already affecting many people in a negative way in real terms. To put it simply, they failed to plan and in failing to do so, they arrived at unsuitable decisions with negative consequences and expensive outcomes. They have set strategy without understanding the tactical detail, what in the military is called ‘Big Hand, Small Map’ syndrome.
The Enemy has a Vote Too
When the military plan combat operations, there is a saying that “the enemy has a vote too”, where any plan will create an as yet unknown reaction from the enemy (if that is, you can locate them). As such, military planners will assess ‘likely enemy courses of action’ and then have further plans to deal with any reaction. If one translates this to a government making new fiscal and monetary plans, the enemy would be the free markets. Whatever decisions a democratic government makes in a budget, there will always be a reaction from stakeholders such as the stock exchange, currency traders, pension funds, mortgage providers, world banks, speculators and economic commentators. Each of these stakeholders needs to be considered. It may be hard to tell how the market will move or behave after a budget announcement, but in a well-run government, it is likely that such stakeholders and their reactions, would have been considered. It is clear that the expectation of this ‘mini budget’ was that the markets would react either favourably, or at worst, with little consequence. Clearly the expectation was wide of the mark.
Always Have Options
To add to their woes, the Government has little room to manoeuvre to different options and there is a reason for this. It is often said that “the plan is nothing, planning is everything,” and what this means is that so long as you have been through a thorough and well understood planning process, you will always have options to do the next best thing or perhaps something totally different that achieves the same objectives. As it is, their choices are limited. Sticking to the original plan is no longer an option, given the changes already announced. Make all the changes required to please the markets and the new government’s credibility will be in tatters. A thorough planning process is likely to have offered more options.
No Surprises
There are many recognised processes, models and frameworks used to problem solve, plan and make decisions. Successful businesses and militaries have well-honed processes to carry out their planning. These processes will include team building, information gathering, problem definition, risk identification, options, decision evaluation and testing. None of them will involve wishful thinking, subjective opinion, a reliance on ‘success-based planning’ nor ignoring the advice of those people that are likely to know better than you.
Seen rather
more comically, the only comfort this new leadership team can extract from
their current circumstances is that “the beauty of not planning or preparing is
that failure comes as a complete surprise and is not preceded by a period of
worry and concern.”
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