“How far ahead do you plan your strategy to stay competitive while also still planning for future trends?”
If I were to take the easy road to answering this question, I could tell you that most strategies I’ve seen throughout the corporate world are in the 3 to 5-year range. But that answer, admittedly, is a cop-out – mostly because it assumes that this range is ideal rather than just common.
The right answer, at least in my opinion, is to match your strategy to your product life cycle. For example, if you are selling a high-tech product that will likely be obsolete in 1-3 years, then a 3-year horizon is more than appropriate. On the other hand, if you are developing a strategy for a piece of industrial equipment with a 20-year market life (not measured by how long the product is expected to last but rather, by how long the product is expected to remain valid in the marketplace), then the time horizon for your strategy may need to be quite a bit longer.
The reason for this, of course, has everything to do with the second part of the question related to staying competitive. If you are only looking out 3 years for a product with a 20-year market life, but your competitors are looking out much longer than that, then you are putting yourself at risk of being outsmarted.
Now, you might be thinking that you cannot possibly plan that far out with any degree of accuracy because, even if the product doesn’t change much in that time, certainly everything else surrounding your product will change (markets, customers, competitors, etc.). And you would be right; at least to some extent. However, even if the longer-range part of your plan is less accurate the further out you get, at least you’re putting the long-range thought process on your strategic radar. And that means you’ll be even one small step ahead of the majority of your competitors.
Listen to the podcast episode
Dear Strategy: Episode 013