2020 VISION: THE IMPORTANCE OF LONG-RANGE PLANNING
"The best way to invest in the future is to get your organization talking about it today"
Does your organization have a long-range plan? Has your leadership team met to discuss external forces and market trends, the shifting talent needs of your business, the competitive forces that will either create opportunities or eliminate your current advantages over the next five years? Long-range planning used to be very commonplace in organizations when the markets and the economy were more stable and predictable. Since the 2008 recession many companies have shifted their focus from the long term to a much shorter outlook. This has enabled them to move quickly to adjust to the current market conditions, but it comes at a price.
Just take a quick look at the earnings reports for many of the Fortune 500 over the past several quarters. There is a clear trend. Companies are recording record profits on either flat or declining revenues? The formula for success since 2008 has been to focus on operational excellence, cost cutting initiatives, supply chain improvements and other metrics that drive cost out of the business. The results have been impressive for the bottom line, but in the long term they will prove detrimental to the top line. Companies can only shrink themselves to success for so long before they must learn to grow again.
A five-year plan is a good first step towards renewing the focus on top line revenue growth. 2015 is the perfect time for organizations to create a five year plan. Call the plan the 2020 Vision. This term will resonate with your employees, your shareholders and other constituents. When we reach the year 2020, you will be able to see whether your long-range plan was achieved. The 2020 Vision must be aspirational and include a few BHAGs (Big Hairy Audacious Goals) as coined by James Collins and Jerry Porras in their 1994 book entitled Built to Last: Successful Habits of Visionary Companies. Working with your leadership team to focus five years out exercises some thinking and muscles that many organizations have ignored for a long time. It takes practice and a new approach to the business.
Conducting a SWOT analysis is a good starting point. With the aid of a facilitator the senior team should identify the Strengths, Weaknesses, Opportunities and Threats facing their business today. By looking at the current landscape the organization can begin to plan for the future. Once the SWOT analysis is complete. The team should fast-forward five years to 2020 and ask whether each of the Strengths, Weaknesses, Opportunities and Threats of today will still be present. Given what the team knows about the industry, the trends, the political landscape and other forces their should be some clarity regarding which items on the SWOT will be increasingly important over the next five years. As a team, diagnose the potential impacts on the business and use this to build an aggressive plan to grow the organization. A mitigation plan will be necessary to offset the risks, but the 2020 Vision should be about growth. Ask the question, “If we accomplish everything we set out to do over the next five years, will we be satisfied with the results in 2020?”
A very important component of the 2020 Vision is the human capital plan. The leadership team must ask whether the organization has the right talent in place to achieve the plan. With an increasing number of baby boomers retiring and a war for Gen Y talent, does the organization have the right people in the right jobs to execute the plan? If not, it is important to make talent acquisition, talent development and talent retention key components of the 2020 Vision.
The most important step in crafting the 2020 Vision long range plan is the communications of the plan. The plan must be written to inspire progress and to motivate the employees. A campaign should be launched internally to get buy-in. All employees should be aware of the 2020 Vision and they should understand three key components:
1) What is the plan?
) Why is this the plan? (How did the organization arrive at this plan?)
3) How can each employee impact the plan?
ommunicating the plan is the first step. Creating a communications cadence is also important. Milestones should be set and when reached they should be communicated and celebrated. The milestones will help build organizational momentum.
Like any good goal setting exercise the 2020 Vision should be written in pencil, not carved into stone. Unforeseen events will occur over the next five years that might require the organization to shift focus or alter course. That is to be expected and the 2020 Vision must be flexible to a degree. Don’t abandon the plan, but make room for changes as necessary. This requires that the leadership team meet at least twice a year to review the 2020 Vision and to audit the plan for relevance.
Growing an organization in these turbulent times is challenging. Having a long-range plan is an important tool for achieving growth over the long term. The short-term focus that has captivated so many companies creates opportunities for those that are patient and willing to invest in the future. The best way to invest in the future is to get your organization talking about it today. No better time than the current to begin working on your 2020 Vision.