Adaptive Annual Planning is Essential for B2B Leaders

“Everybody has a plan until they get punched in the face.” – Mike Tyson

Traditional annual planning, with its focus on fixed targets and long-term forecasts, struggles to keep pace with the speed of change. Market shifts, technological advancements, and unforeseen events can quickly derail even the most well-laid plans (please see 2020-2024 for details).?Rigidity can leave B2B leaders feeling trapped and unable to capitalize on emerging opportunities. In a world defined by its volatility, adaptive annual planning isn’t just a nice-to-have; it’s a necessity.?

This volatility demands a new approach, one that embraces change and prioritizes agility.?Adaptive planning is an ongoing process of monitoring, reviewing, and adjusting. It requires a culture of continuous improvement where data-driven insights inform real-time decisions and enable you to course-correct as needed. To enable an adaptive planning approach, your annual budget must also be adaptive.??

The 70-30-10 Principle

One approach to adaptive budgeting that I favor is the 70-30-10 model.?If you can get past the fact that the numbers in the title don’t add up to 100%, there is a useful set of principles to consider when building your budget to be adaptive. This model represents a balanced approach to marketing capital allocation, emphasizing current-year revenue while strategically pushing forward for new opportunities.????

Proven Strategies -70%?

These are your bread-and-butter activities that are proven to work and generate revenue.?Typically they are a combination of ongoing tactics (social media, paid media, email) and schedule-based events like trade shows and cultivating business relationships.?These activities represent the largest part of your annual budget and are the most predictable in terms of spend, activities, and expected results.??

Transformation – 30%?

This budget category represents two main types of investment, which both can be thought of as optimizing current strategies.?The first type improves the performance of existing marketing by adding new capabilities such as automated cultivation sequences or high-value assets to be deployed during engagements.?The second category is about improving overall sales and marketing performance with things like a brand strategy or a CRM implementation.?This investment type is relatively low risk and likely to add value now and into the future.????

Research and Development – 10%

The R+D category of an adaptive budget represents the potential to break through in a non-traditional way and opens up large new opportunities.?Good examples of R+D marketing investments are selling a completely new product offering or entering a new and unproven market.?This budget category brings with it the upside of vast new potential revenue and should be thought of as high risk-high reward as there is zero return risk in play.?The 70-30-10 model includes this category as it’s essential for long-term growth while minimizing the downside risk of the “big bet”.

By adopting the principles of adaptive annual planning and budgeting, B2B revenue leaders can:

• Respond proactively to change: Anticipate and adapt to market shifts, technological advancements, and unexpected events.
• Capitalize on emerging opportunities: Identify and seize new opportunities as they arise, even if they weren’t part of the original plan.
• Improve decision-making: Make data-driven decisions in real-time, based on the latest information and insights.
• Enhance organizational resilience: Build a more agile and adaptable organization that can thrive in uncertainty.