Sizing the funnel. The essentials behind creating “the plan”

Planning is hard. Let‘s be honest. Yet, there are numerous best practices that should be considered when setting up a planning process within an organization. Let us dive into the essential ingredients that will make any planning process better.

Defocused shot of a group of businesspeople having a meeting in an office. Planning process. Funnel sizing.

At the start, we need to understand what planning actually means by looking at it from a systematic point of view. It helps to imagine a funnel, where at the top, information and data are fed. This may be financial transactions, market outlooks, production details for products, or many more. The collected information is streaming then through several layers of the funnel to result at the bottom in the final plan.

Philipp Erkinger

Planning Specialist Supply Chain / Connected Planning
+46 73 421 27 82

philipp@bluesprint.se

Philipp Erkinger

The planning funnel

In the top layer of the funnel, you will find many individuals using the most granular information to make assessments of the future. There may be even hundreds of people across the organization, with different backgrounds, time horizons, and objectives. Each bubble in the visualization represents individual teams collecting and analyzing information, having a discussion about it, and making decisions contributing to the plan. The bubbles are also interconnected, where one is feeding the other.

One example would be the introduction of a new product, where a Product Manager will try to estimate the potential of a new product by looking at market outlooks, the actual revenue of similar products, and the cost to produce the new product. This information will help her to derive several business scenarios to propose her case to the steering committee.

The further down you get in the funnel, the more aggregated and focused data becomes.

The product steering committee is part of a lower level in the funnel, where they look at several different proposals for product introductions to assess their combined potential. Data at this level is already much more aggregated and the activities are focused on the strategic success of the company.

Contributions from both levels will ultimately result in planning activities, like setting an actual figure to define the sales volume of the new product in a future month. This is where “the plan” gets its final shape.

Sizing the funnel

Why the size of the funnel matters

When we visit our customers and analyze their planning process, we often can recognize the following scenarios where the funnel doesn’t work probably:

A too narrow outlet will cause either a very conservative plan or it will be too simplified. A conservative plan may only focus on one single sector and neglect all ambition or alternative options. It will set everything on one bet. A too simplified plan is easy to track but lacks transparency and visibility across the organization. It becomes a great challenge to understand the nature of deviations.

A too wide outlet will cause an unreliable plan, with a lot of noise. This happens when organizations lack a structural review process, the management has a strong focus on the past or the plan is just not taken seriously. “We are anyway not measured by it…”.

The depth of the funnel can be described as a reflection of data aggregation. A deep funnel means that a lot of detailed information is used across the organization. This may be amazing when AI engines are supporting decision-makers in scenarios, but it can be very complex and error-prone to handle at scale. A flat funnel has the opposite effect, data is largely aggregated and transformed, causing that relevant information may be lost.

Bubbles, my bubbles! Next to the funnel size, it is also relevant to look at the amount and respective size of bubbles and how they are connected. A large bubble includes many people and lots of information, making it slow and heavy. You will mostly find them in very strong silos within the company. Small bubbles are often focused on one specific topic and can be fast with their respective tasks. Yet, having lots of small bubbles may result in chaotic processes.

Sizing the funnel

Ultimately, the perfect size and shape of the funnel are defined by only three drivers; Strategy, Leadership & Culture. Simple? Yes, but not easy! That’s why planning is so hard.

At Bluesprint, we are experts on smart planning and quick decision-making. We help our customers with developing their own style of strategy, leadership, and culture to properly size the funnel and find the right “bubble-balance”. Combining smaller and bigger planning operations and placing them in one system, improves business management. Your teams can collaborate faster and better across your business. This makes planning easier and more efficient and last but not least, more fun!

Want to learn how to optimize your business planning?
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Categories: Anaplan, Bluesprint, Bluesprint and Anaplan, connected planning Anaplan, planning, planning essentials, planning funnel, planning process and simulation.