Fri | Apr 12, 2024

Francis Wade | Three hidden reasons to think long term

Published:Sunday | March 3, 2024 | 12:10 AM

As a leader, you already know that organisations in both the private and public sector need to think long term. Hence, you can instantly identify common explanations. But there are some nagging corporate problems that don’t seem to have anything...

As a leader, you already know that organisations in both the private and public sector need to think long term. Hence, you can instantly identify common explanations.

But there are some nagging corporate problems that don’t seem to have anything to do with long-term thinking. Consequently, their appearance catches leaders off-guard. Here are three surprising issues that can be fully anticipated if you fail to complete a strategic plan that spans a wide horizon.

1. Commitments at cross-purposes: Picture your organisation. It has a meticulously crafted three-year strategic plan in place. However, nothing exists to address the future four years away or beyond. Undated statements of vision, mission, purpose, or core values don’t qualify either.

As its managing director, you probably have personal ideas about the long-term future of your enterprise. You trust these private notions, convinced that they will provide enough direction to lead.

However, a blind survey of your C-suite or board reveals that each individual has his or her own convictions about where the company should be headed in year four, 10, or even 30.

In the absence of an explicit strategic plan, each person has his or her own mental pathway to the future.

This discrepancy may not show up in daily problem-solving sessions. But unfortunately, when working alone, they are making decisions using solo criteria. Also, they are avoiding thorny issues that can’t be solved immediately.

The cumulative effect over time can be disastrous.

Despite their initial success and apparent path to short-term gain, companies like Blackberry and Nokia ultimately lost their way. So did Southwest Airline, which precipitated a global disruption in 2022 due to their failure to invest in long-term software improvements.

Besides this problem, there is also an impact on the number-one issue organisations report on, on their strategic planning: poor implementation. When a company has no long-term vision, savvy executives tend to unconsciously withhold their support. Why?

They recognise that the commitment is shallow. And likely to shift when the breeze changes direction. Therefore, there is no need to spend valuable social capital, budget, and time on a short-term plan that has a 50% chance of being abandoned.

Recently, I reviewed a local Request for Proposals from a public-sector entity for strategic-planning assistance. The plan will run for four years.

If you do the maths, and you are aware of Vision 2030 Jamaica, you may wonder, “Why did they choose that time-frame?” Clearly, by misaligning their planning, they fail to fully embrace the country’s highest aspirations.

But don’t blame them. Like most managers, they are playing it safe by making non-consequential bets. They cling to their comfort zones, leaving the status quo undisturbed.

2. Missed trends: Recently, I reread Competing for the Future by Hamel and Prahalad. In this 1994 classic, they predicted the impact of some new technologies.

An interesting observation: they were mostly correct. This means that a company that took their prognostications seriously would have carved out a competitive edge.

But this is just a single area. You may be acquainted with the full PESTEL suite – political, economic, social, technological, environmental and legal/regulatory factors. When companies only plan with a short-term horizon, they deny the impact of gradual trends in all these areas at once.

As such, they leave themselves open to incipient threats. Also, big opportunities pass them by as their limited thinking fails to include lurking possibilities.

For example, in 2010, Apple looked into the future and envisioned an all-encompassing ecosystem built around its products, services, and the cloud. Chances are they had the same data as everyone else. What made a difference?

In that year, they created a decade-long plan to craft a complete solution, one piece at a time. Now, they are among the most valuable companies in the world, compared to their near-collapse in 1997. Overcoming an existential threat, they seized an opportunity.

3. No succession planning: Creating succession plans is a challenge for most organisations. Why? It is far easier to let incumbents slide without confronting their immortality.

Only long-term thinking reveals the folly of this approach.

For example, it becomes clear that skills needed to lead the company in upcoming transitions are missing. Someone who is close to retirement may not be the best candidate to climb a new learning curve.

But that is only the beginning. Once talented middle managers sense the lack of long-term direction, they start looking for opportunities elsewhere.

Over time, companies find themselves left with a mediocre majority, mired in inertia. But it gets worse. Eventually, as the ‘last men standing’, members of this cohort receive promotions, even to the C-Suite.

Consider these three slow-moving disasters to be preventable, but your team must perform the kind of strategic planning that interweaves short- and long-term horizons.

Francis Wade is a management consultant and author of Perfect Time-Based Productivity. To search past columns on productivity, strategy and business processes, or give feedback, email: