| Jul 2, 2021

The Death of the 5-Year Plan – How Today’s Executives Should Plan for the Future

Planning for the future is essential for any company's success, but the traditional 5-year plan may be leaving your company behind. To better plan for the future, here are some tips for you to follow.

The traditional 5-year plan has been a staple in countless organizations for years. Even so, it quickly is becoming outdated and has serious flaws when viewed under the lens of new business realities. To protect your resources, keep creativity high, and make sure competitors don’t put a target on your back, it’s time to plan for the future in a new way.

Why the 5-Year Plan No Longer Hits the Mark

Despite a name that implies some forward thinking, a 5-year plan is not truly based on the future. It relies heavily on linear timelines, is anchored in past performance, and is driven by tactical responses. In today’s business environment, which is set in a much more dynamic and volatile world, workers and leaders alike both need a more proactive tool that’s driven by strategic visioning, and that allows professionals to break free from the “this is the way we’ve always done it” approach. 

Getting more specific, the 5-year plan is oriented around the idea that professionals have a high level of control over their brands and companies. People have assumed that because they have this control they will be able to stay on whatever course they chose and, therefore, reach the finish line. 

But now, thanks largely to social media and other technologies, customers are more in control of brands and companies than ever and their expectations are constantly evolving.

At the same time, the digital world also shifts in a blink. In fact, many “future” technologies, such as AI and virtual reality, are already becoming more and more standardized in operations and offerings. In this constant state of digital flux, you cannot build a future on old technology. You must be willing to pivot and shift rapidly based on whatever developments happen. The 5-year plan, however, often is built based on what’s currently available, which puts you at risk of falling behind, missing opportunities, being blind-sided, and left unable to quickly respond and adapt properly to whatever other changes are happening in the market.

As a result, both individual workers and companies have to be better prepared to manage risk and uncertainty. They cannot get comfortable. They must challenge themselves before other companies do, and they must be able to iterate continuously. Leaders have to think more critically about how they manage and develop their teams as they try to anticipate and adjust to new customer demands, jobs appear, change, and/or disappear fast. This will continue to be the case.

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How To Plan Without a 5-Year Plan

One reason people have clung to the 5-year plan model is that it lets you stay on a steady, predictable course. Change is difficult and most people are naturally somewhat resistant to it. Nevertheless, shifts are happening at lightning speed, and the quick will inherit the Earth. 

Rather than try to fight this reality and control everything, focus on controlling what you can and managing the rest. Go with the flow and improve your ability to pivot until you can do it faster and better than everybody else. Learn how to analyze on the fly so you can come up with new ideas or goals that allow you to survive even in an increasingly dynamic landscape. Get comfortable with the messiness of the world and fuzziness of the future, because you can’t contain the chaos anyway.

As you adopt this new way of thinking, pay careful attention to your data. Rather than focus on how much data you have, focus on getting the right data and interpreting it properly. If you do this well, you can create data-driven models that support whatever pivots you want to make. You’ll keep yourself from making decisions based solely on what you feel in the moment, and as long as your analysis is ongoing and up to date, you’ll have a relatively real-time picture of what you’re dealing with.

Next, understand that clients now expect a connected experience, whether the connection is to a system or other people; and they likely will continue to expect this. Technology (e.g., APIs) enables these connections, so don’t be afraid to invest in digital tools. 

Lastly, consider scale. In many cases, adopting a standard works just fine to ensure that your results and efficiency continuously get better as your business gets bigger. Do this where you can. But, in other instances, the best way to do more with less as you expand is to create a customized digital solution.

By Leaving the 5-Year Plan Behind, You’ll Gain Advantages Your Business Needs To Thrive

A traditional 5-year plan does have some benefits that you should aim to carry over into new future planning, such as establishing micro- and macro-goals and using clear metrics to ensure accountability and progress tracking. However, abandoning the 5-year model provides the opportunity to increase agility, as well as the space to innovate at the speed of business and technology. It will encourage companies to focus on client demands, trends, global events, social change, and economic shifts, market forces, and regulation. 

Let yourself plan differently in a way that’s truly future-centric and that acknowledges the reality of a constantly shifting world. By finally thinking in these terms, you’ll quickly move to the front of the pack. 

By Donna Peeples
Executive Author

CEO and Chief Engagement Officer, Peeples2People

A versatile strategist with keen market sense and strong orientation toward the customer, operations and employees while applying business acumen to transform innovative ideas into action. view profile

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