Planning permission

As with all pieces of research, this project started with a question: what is a business plan and where does research come in? From the marketing director’s strategy to the CEO’s push for 10% growth, I wanted to see how the research plan fitted into the wider company planning process. I met several of our clients, spanning the FMCG, financial services, telecommunications, travel and automotive sectors. The answers I received varied greatly, with some in-house research teams having significant awareness of both the wider business plans as well as input into marketing plans – while others had little if any involvement in the planning process.

I learned that the planning process can stretch out over many months and while research has to fit within the overall business plan, the research department often has specific ideas they want to tackle from a departmental perspective.

If we think of the projects being conducted by the research team as the organisation’s learning plan then there is often another agenda, which we’ll call the departmental plan. For some research departments the learning plan is all that is required, but for others on the clientside there are questions about the uptake and importance placed on market research that they want to address in the year ahead. For these people the departmental plan may include increasing their own profile and that of market research, getting in front of key decision-makers, moving from project execution to internal client engagement and becoming genuine business partners.

These types of departmental topics do occur in most companies but they are definitely more profound outside FMCG. Within FMCG, the importance of research seems to be known and strongly respected. Researchers in these types of companies might worry about positioning less but there are other pressures, of course.

In many instances, the planning process within companies is thought to be a fairly linear thing: business plan shapes marketing plan shapes research plan. The senior management team sets a target for 10% growth, which – at a simplistic level – leads the marketing team to plan for two large ad campaigns and one new product launch. The research team then determines what they need to do to support this plan.

Of course things are never that straightforward. In reality the planning process involves a lot of back and forth and cross-polination of ideas. The research department knows some of the things they need to do already. Trackers are relatively fixed and integrated into the business and so can be planned without much reference to other business plans. There will be things that have been discussed and studies that need doing irrespective of specific marketing plans and there will be initiatives the research teams want to do and will fight for budget for.

Also – whisper this – some marketing teams may not be as detailed in their planning as they should be. While we found some clients were submitting budgets with detailed plans, all monies allocated to projects, projects placed against business objectives and even specifying vendors, others submitted plans that were much more vague and focused on the top-line budget figure (with luck with a percentage increase over last year).

The planning spectrum

When looking at the different processes and the different types of agendas, we realised that clientside research departments sat on a continuum between the wilds of the free market and much more of a command-and-control structure. Within free market-type environments, there was much less emphasis on planning and the research team was more likely to react to marketing or business issues as and when they arose. This made them flexible and adaptable. They were used to fighting fires and networking within the company, particularly pre-project.

Networking was important because often they were not in control of their own budgets and needed their internal clients to fund all activities. Through my research, I would suggest that this state of being is most likely to occur within technology or engineering-led companies, organisations where marketing, and hence research, is not seen as core. In the command and control environment, research teams have detailed product plans – often mapped out past 24 months, with research automatically conducted at certain set times. They hold their own budget and are in control of how it is spent but have less input into the type of work that is done. This means they focus less on project execution – their role is more about interpretation and stakeholder engagement once results come in. Again my research would suggest that these tend to be FMCG companies, or places where the CEO used to be the CMO.

Of course individual departments can fit anywhere along the free-control continuum. I know of a major FMCG client of ours that sits firmly at the free market end of the scale. It should also be noted even within departments it’s not a clear cut case of either/or. Free market departments often have set budgets for core market data such as customer satisfaction or brand tracking studies, while command and control departments might still manage to squirrel away a ‘miscellaneous’ budget to use for experimentation and ad hoc requests throughout the year. And regardless of where your own department sits, each side of the spectrum has its own challenges, strengths and weaknesses (see table).

Invariably part of the planning process, even for free marketers, includes some budget allocation followed by “healthy discussions” with finance. More often, these take the form of multiple rounds of discussions – and ultimately cut backs – extending into first- and second-quarter reviews. This cycle creates a need to spend or allocate budget early and to also develop an understanding and, ideally, a strong relationship with the finance team.

The clients I spoke to were arming themselves for these battles as much as possible. Preparations included brushing up on finance-speak and creating powerful and persuasive budget presentations and arguments. But some do approach these discussions with finance half-heartedly, particularly those that are used to set percentage increases (or more often decreases) each year. However, other organisations, particularly the free marketeers, were more likely to have very erratic budget allocations that could go up or down significantly depending on financial success but also corporate direction. A new and data-led marketing director might increase spend significantly. Conversely a poor profit year could drastically reduce budgets and manpower.

Can I stick it?

In my conversations with clients, we discussed how well their companies managed to stick to their plans. Again this depended very much on where they placed along the free-control continuum. Those at the command and control end stuck very closely to plans. Miscellaneous spending amounted to just 5% of end of year budgets. Others outspent their allocated budgets by 50% or more – although this was usually funded by those departments elsewhere in the business who suddenly found themselves with an unexpected need for information.

But perhaps the most surprising thing about the outcome of the planning was that for many, it involved more planning. As soon as the 2013 process was finalised then the three-year and five-year plans started. For others, they went straight from planning into the review stage and saw early attempts by finance to cut their allocated budgets. So much for the best-laid plans.