Back in the day—meaning, for our purposes, as far back as a week ago—the strategic planning model consisted of hiring a consultant to put together a presentation, inviting your executive team on a retreat to review that presentation, engaging in a debate about strategic goals, initiatives and tactics, and then approving a final version to disseminate throughout the organization. This new strategic plan would use the current fiscal year as its starting point and look to where the business was likely headed in the next three to five years.
We live in a different era now. Ever-changing economic conditions, as well as advances in technology, have accelerated well past anyone’s ability to accurately predict the future. When someone in a garage somewhere might be working on a magic bullet with your company’s name on it, planning two to three years ahead, let alone five, is frankly ridiculous.
The key to successful strategy execution and alignment today is very different than in even the recent past. The most effective approach involves a much shorter time-horizon, not much beyond a year.
For the best real-time strategy results, we advise businesses to focus on achieving three or four short-term strategic solutions (at most)—and knocking those out of the park! To attempt anything beyond that involves a serious drain on time, money and internal resources. You may get pieces of each individual initiative accomplished, but not all.
Why do some companies persist in attempting long-range strategic planning? The main reason seems to be that some CEOs believe, “My business is different.” It’s a dangerous fallacy. Whether you’re a manufacturer, online retailer or service provider, your business allocates resources, offers a product or service, bills clients and collects revenues—the framework is the same, regardless of a specific enterprise. And we all face the same challenges and opportunities in today’s volatile marketplace.
Yesterday, we had the luxury of projecting where our business, and the marketplace at large, might be in five years. Today, looking beyond the coming year is a waste of your valuable time.