Given the unprecedented change that occurs in virtually all enterprises and businesses, the range of useful forecasts has narrowed from years to months to even weeks in many arenas.
Traditional three-to-five-year strategic plans, which were once the mainstay of successful enterprises, are now laughable in their lack of utility.
The pace of change in the marketplace has rendered the trends and assumptions that fuel forecasts almost meaningless over any length of time. Yet, forecasts and predictions about the future remain the mainstay of the planning and allocation of resources that businesses rely on to thrive and take full advantage of the opportunities in the marketplace.
Are leaders kidding themselves? Is strategic planning and forecasting in today’s world a wasteful exercise?
For the best teams and organizations, strategic planning continues to be an essential process for reasons of clarity, not certainty. Planning creates clarity and allows leaders to test, explore, and challenge their working assumptions about the future, no matter what the timeframe.
In addition to setting priorities based on forecasts, contemporary planning explores possible scenarios regarding multiple plausible futures. This gives leaders the best chance to plan successfully without denying the likelihood that the marketplace will change more quickly than they anticipate.
While it likely no longer makes much sense to create forecasts and engage in strategic or scenario planning beyond a year, that doesn’t prevent leaders from crafting a vision that gives the organization something to shoot for in the future.
Most visions are lofty and broad enough to flex to meet the shifting challenges that emerge in the short term. Good visions depend less on forecasts and predictions and more on what the organization desires to become regardless of the environment.
In a world of fast change, checking in and revisiting any plan or forecast more frequently is essential. What this means for leaders and organizations is an ongoing planning process that occurs quarterly or even monthly. Anything less suggests a plan that will likely become obsolete before leaders can catch up.
Long-term planning is now very long-term. While there are exceptions to this new rule, crafting three-to-five-year plans seems fruitless for most organizations. Those who maintain their commitment to a longer plan do so for learning and clarity, not for certainty and precision. Those who expect more will make fortune tellers and palm readers look good.
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