Does your business have a five year plan? Probably. You may not think it does. You may think the idea sounds a little Soviet. But think about it. When did the leaders of your organisation last have the time to step back and consider the future with an open mind?
In my experience these events are infrequent. Every five years or so, something happens to trigger such thinking. You get a new leader or perhaps a new investor. Perhaps your company is bought out. Maybe you win a big new customer or lose one. Something happens, the leaders gather and you put a new plan together. Thus it becomes by default, the new five year plan.
Motion and Direction
Five years is a long time. Five years ago is when Google+ launched, and more successfully, Siri. Steve Jobs died. 2011 was Occupy Wallstreet, the UK riots, Will and Kate’s wedding and Bin Laden’s assassination. In five years a business can go from launch to a multi-billion dollar valuation (SnapChat). Or it can go from multi-billion sales to near-collapse (Staples).
A five year plan can only define a destination and a direction. It cannot define motion: the process of achieving that destination. Because your motion will have to change too frequently for it to be defined months or years in advance.
Most organisations do have annual planning exercises too. But in my experience, these exercises are usually heavily defined by the five year plan. Not just by its goals, but by its methods. Not what the organisation should achieve, but how it will achieve it. Annual planning sessions are usually about telling people to do more of the same. They ascribe failure to people not doing enough.
Five year plan, six-month cycle
Leaders need to have a very clear separation in their planning between direction and aspiration, and action. Set direction every five years. By all means, it is important to have a vision. But every six months, every organisation should go through an exercise of challenging its behaviours, priorities, and assumptions. Looking outside and in to see what is around the corner.
That is a recipe for sustainable success. Blindly following a five year plan is a recipe for disaster.