What’s the value of planning in the time of crisis, you may ask?

If ever there was a moment for firms to keep their crystal balls under wraps, this may appear to be it. But many companies are still issuing annual forecasts in spite of the uncertainty roiling their markets. On February 24th, for instance, Home Depot, another American retailer, estimated that its revenues and earnings per share from continuing operations would decline by about 9% and 7% respectively in its 2009 financial year. Earlier this month, Reckitt Benckiser, another European consumer-goods group that competes with Unilever, said it was confident it could increase its revenues by 4% this year.

– “Setting financial targets”, The Economist, 26 Feb 2009

It is a bad plan that admits of no modification.

– Publius Syrus, Maxim 469

I’ve been mulling on this lately. The reaction is understandable: when you have a bunch of known unknowns and unknown unknowns—when things are chaotic, and history is at best a very poor guide—the desire to stop spending time planning is quite understandable. “Why come up with a plan if it’s out of date by the time it’s published?” Well, here’s why: the exercise in and of itself has value.

Publius’s comment is right, as is the old maxim that “No plan survives contact with the enemy.” You’d think that the military would understand this the most of all: millions have died because leaders were fighting the last war, and the lessons of inflexible planning have been written in blood all over our planet. And yet … the military war games as often as the budget allows. Why? Planning is a form of practice. It’s practice in thinking about what you’re going to do when faced with a situation.

The negatives come, of course, when Wall Street doesn’t allow for modification of that plan once you publish it, but that’s their problem and not yours, isn’t it? Your job is to think about your business—where you are today, where you want to be tomorrow, next quarter, next year, and five years from now—and as a manager, you have to plan. But if you find that your plans keep looking the same, you’ve gotta change something, don’t you? If you don’t, well, you’ll lose.