Sunday, April 11, 2021

It's Time to Dust Off Your 5 Year Strategic Plan

Every industry in the world does strategic planning. I read a while back that some companies had 100-year plans but that is almost too hard to comprehend.

One of the mainstays of strategic planning for most companies has been and will probably continue to be the Five Year Strategic Plan. It used to be not having one was like taking a trip without a road map or Google Maps. You may eventually get where you want to go but you will have to stop and ask directions quite often as each person you ask only knows a small part of your journey.

When to Set Aside Long Range Planning

There are only two times when long-term strategic planning can be put aside. The first is when you start your business and the second is when you are in financial trouble at the end of your business.

Long-range planning before you open your doors is a crapshoot. Imagine you’ve planned to open a modular construction factory building small affordable homes but within a year, you can’t meet your goals...not even close. Then someone asks if you could build them 40 townhouses and your vision of your business changes forever.

This scenario plays out more often than can be imagined in every industry. Plan, plan, plan for one thing for your new business and Wham!, you’ve changed direction and found a better path to success.

However, when the lights are growing dim for your business, is that the time for reviewing your Five Year Strategic Plan or would your time be better spent trying to keep the lights on? The only real strategy in times like this is deciding how to sell and not lose your butt or what to do after you close the doors.

So the answer to the question of Strategic Planning’s demise is “NO”. It definitely is not dead or dying but it is changing from just a couple of decades ago.

I remember way back in my youth, when our family owned a chain of convenience stores, sitting around a table deciding where we wanted to open stores in the next 12 months. There was no real research to back up our decisions other than we thought a certain town would love to have one of our stores. Just a gut feeling. Eventually, we had to sell some of those stores simply because our planning was poor and many of the areas where we opened stores really had no need for a convenience store.

Out with Old - In with the New

Strategic planning is the key to achieving big goals but many industries are now questioning the value of long-range planning in light of the rapidly changing commercial environment and the huge amount of information available at our fingertips.

Leading modular, prefab and manufactured home companies are able to use all this data to anticipate changes in developer, investor and homebuyer needs and change appropriately

I recently read that there is an average of 5,000 data points on every American. Every time you use your store loyalty card, your debit card, order online, Google something, read an article or visit a website, a little bit more information is collected, stored and dispersed to anyone willing to pay for it.

Big companies like Clayton Homes and other modular home manufacturers now have information on who is looking for a new home, what type of home, their income and credit scores, where they want to live and so much more than was ever possible before. Cookies record everything. Even your Amazon Echo and Google’s Assistant are gateways to your personal information.

Though Strategic Planning is not dead, long-range strategic planning is no longer as relevant as it was. Your company, using all the data you can afford to collect, may find that looking beyond a couple of years is no longer the best practice.

Turning to "Spot Strategy"

Your company must learn to be adaptive and be innovative when using all this data. You must be able to ‘turn on a dime’, reinvent certain parts of your business and keep moving forward. This is using “Spot” Strategy.

Short-term initiatives are rapidly becoming the focus of many in our industry. This allows experimentation and helps your company from being blindsided by both your competitors and new technology. There are hundreds of data collecting companies selling everything from credit reports to consumer habits, from your family data to their criminal records. There are services collecting data on new products and new technologies in every single industry in the world.

There is No Small Company

Even if your company only made those little red reflectors for the back of Amish buggies, there are probably several data collectors that could supply you with more information than you could possibly want or need.

If the Five Year Plan is not as relevant as it used to be, is long-range planning obsolete? Another resounding “NO!”

Many companies use a 10 to 20-year plan to explore the limits of what’s possible and determine what will be important in the future. Envisioning the future and using short-term initiatives, continually gathering data along the way and adapting your company to meet your future plans is not only imperative but can be downright fun.

Gary Fleisher is the Managing Director and contributor to the Modcoach Network and its affiliated blogs.

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