INNOVATION MASTERCLASS:Good planning is proven to help guarantee the success of a company - even through a recession, writes OLIVE KEOGH

IN LIFE there are planners, and those who fly by the seat of their pants. "Flyers" often survive well in life, but this technique is less suited to running a business where planning goes hand-in-hand with success.

"There is ample evidence that businesses that plan succeed," says Michael Johnson, chief executive of Dún Laoghaire/ Rathdown County Enterprise Board. "However, in a recession, planning often goes out the window as people focus on surviving.

"They don't see planning as relevant to their current situation and develop a 'dig in' mentality. What they forget is that plans are not set in stone. They can be changed and used as a key mechanism to drive a business forward."

Taking time out to draw up an interim business plan may seem like a luxury. However, this fails to recognise that the current downturn is not going to be sharp and short. It is going to stress test the long-term viability of many businesses. Right now, business people still have the energy to push onwards.

In two or three years' time, when recession fatigue has set in, it may be a different story.

Developing a plan to cover this period (and a bit beyond) is an opportunity to assess and potentially refocus a business.

It can help redefine goals and provide a context in which to review cash flow, costs, overheads and a range of other inputs, from purchasing and distribution to the deployment of human resources.

Setting and achieving short-term goals is good for motivation and morale, while tweaking plans in an effort to recession-proof a business can produce unexpected innovation.

IQ Technologies was set up in 2004 to design and install integrated control systems for large houses and leisure/conference facilities. The system controls such features as lighting, heating and audio. The company employs five and began operating at a time of strong demand for sophisticated services. The fall-off in construction has hit hard, but IQ has used the opportunity to review its strategic plan and take off in a new direction.

"When the recession took hold, it became clear our existing plan wasn't going to last the projected five years," says managing director, Sue O'Neill. "Our long-term goals are still the same, but we have drawn up a short-term plan to address the fact that business is down."

This involved identifying a new application for the company's existing software in the area of energy monitoring. It can be fitted retrospectively to existing systems and is an add-on option for new customers.

"Had we not been faced with the drop in sales, I'm not sure we would have brought the product to market so quickly," says O'Neill. "With business down, we were motivated to fill the gap, and everyone got involved. This has been a very positive experience for the company. As a result, I think we have become generally more receptive to new ideas."

Michael Johnson says there is help available for small to medium enterprises (SMEs) that want to review their strategic plans in light of the recession. "Mentors are one of the most effective resources [ that] organisations such as ourselves can put into a business, especially now when experience is a big asset," he says. "Many of the mentors have been through difficult times and have survived to tell the tale."

Businessman John Cusack is a mentor with Enterprise Ireland's mentor programme. He set up a software business mid-recession in the 1980s, which he subsequently built up and sold. He is now working as commercial director of a new business, Wind Energy Direct.

"Having run a business in a poor economic environment, I understand why short-term criteria are dominating people's thinking at the moment, but it's important not to lose sight of the long-term plan for the business.

"How you behave now may have an impact on that," he says.

In the short term, Cusack says that any new plan should include getting close to existing customers, looking carefully at what has changed for them and modifying a product or service to meet their new requirements.

"When this recession is over, companies will be looking for good long-term partners for the future," he says. "Very few decisions are made solely on price. Now is the time to deliver better service and more value."

Advertising and marketing budgets are usually early casualties of any slowdown, which makes running an advertising agency a particular challenge at this time. Atomic is a small agency set up in 1998 by Stephen Quinn. It employs 10 people and its clients include Unilever, KPMG and Fine Gael.

"The prevailing conditions have definitely changed things in terms of our planning," says account director Niall Dowling. "In early 2008, we set ourselves ambitious growth plans over a five-year timescale. By mid-2008, however, it became clear that the market was going to change significantly. At the same time, pressures on marketing budgets were forcing clients to look at more cost-effective ways of delivering their communications."

To meet its growth objectives, Atomic has adapted its plans and identified a new revenue stream. "The area of digital marketing stood out as being in growth and, in late 2008, we decided to invest heavily in the area," Dowling says. "This included training our creative team and designers in digital production, investment in software, and partnering with specialist service providers."

Dowling says the decision has paid dividends. Digital marketing sales have compensated for the fall-off in traditional business and now account for 20 per cent of overall revenues, with further growth potential.