Thursday, October 28, 2010

Strategic Planning: How far out? Are you serious???

I have been doing some work with a couple of clients around building a strategic plan. Usually what they want is a business / corporate / organizational strategy for the next 3 - 5 years. I highlighted the word a above for a very good reason, which I will explain in a second.
However firstly I want to make comment about the concept of a 3-5 year plan, which is dear to my heart as my bank has just asked for one as part of our business plan. It's fascinating that organizations are still thinking like this.

Two days ago I took a client to the Ashmolean Museum in Oxford. We went into the Egyptian section of the museum where the smaller exhibits are all laid out in chronological order. So as you progress around the room in one direction you find yourself going further back in time, or go the other way and you walk forward in time to more modern times. What we noticed was that from about 4000 - 3000 BC, so for over 1000 years there was little change in artifacts found. Most tended to be practical artifacts. Around about 3100 years BC saw the start of hieroglyphics and then things start to change. Much more art and religious objects start turning up. But again they stay fairly similar for hundreds and hundreds of years. Around 2700 BC saw the start of pyramid building. Again there were hundreds of years between real changes, but the changes were starting to occur quicker - a few hundred years as opposed to 7-800 years.
A nice example is the development of glass and the colour blue happen around 3500 and doesn't really start to change until 1500 when glass makers started to dip a mould into molten glass and start to turn it to produce vessels. Then developments start to move at a faster pace. Around about 1400BC they start glass blowing. As you stand in the room you can actually see technologies, thinking and development speeding up and the timelines between innovations and events getting shorter and shorter.
And so back to our strategic plans. 5 years ago everyone did 1,2,3,5 and even 10 year plans.

The question I often ask now is "Tell me what is going to happen in your market / business in one years time?" I usually have the question answered with shrugs - "No idea".
"And you want a strategy for the next three years??" Most of us have a hard enough time understanding what is going to happen in 3 weeks time in our business let alone 3 years.
When I asked my bank manager what the markets will be like and what the bank would be doing in 3 years time a look of panic crossed her face.
What I have learnt is what I wanted or thought I wanted 3 years ago looks naive now, and given what has happened globally feels way out.

The other point - going back to the red a above. Most organisations develop a strategy, singular. One. Does one strategy really give you enough vision to make really good decisions in ambiguous times? More on this next....