The annual plan is a nineteenth-century technology running on a twenty-first-century clock. It assumes the market will hold still between Januaries. Competitors, regulators, and currencies decline to cooperate, and the plan spends most of its life being politely ignored.

Commitments and positions

The useful distinction is between commitments — capital, people, promises to customers — and positions, which are beliefs about how the world is moving. Commitments deserve stability and should change rarely. Positions deserve revision and should change whenever the evidence does. Most planning processes fatally treat both the same way.

A faster loop, a slower core

Teams that handle turbulence well run two clocks: a quarterly review of positions with a low bar for changing them, and an annual review of commitments with a high one. The plan stops being a prediction and becomes what it should have been all along — a record of what the organisation is currently prepared to defend.