Has Long-Term Business Planning Become Obsolete?

I co-founded a Ukrainian company, so life has drastically changed for my team since the beginning of the war. While reflecting on the lessons I learned over the last year, I recognized that long-term planning doesn’t work now as it once did. And not just for Ukrainian companies.

So, I decided to give this idea proper attention, and that’s how this article came to be.

This is a unique time in many ways. First, the pandemic broke down many supply chains, making managers forget about five-year plans and act fast. As a result, many companies achieved more in two months than they had planned for two years.

Later, the war forced us to rethink our priorities. And let’s not forget about technical advancements that could leave people without jobs and create new opportunities instead. Several months ago, could you imagine that marketing managers would write ads using ChatGPT and generate images with AI’s help? And today, it’s our reality.

Over the last three years, we also saw the rise of space technologies, experienced several major crises, and many of us completely lost certainty about our future. Remember your plans five years ago? What’s the point in even asking whether they have changed or not?

Business leaders understand that flexibility and resilience are essential. We must navigate in a new world using the ever-changing map. It's important to switch between different contexts, reconsider long-term and short-term goals, change plans on the go, digest lots of information and, of course, try living a happy and exciting life.

It seems like traditional approaches to long-term planning have become almost obsolete. Setting goals for five to seven years, dividing them into quarters, and cascading them through all organizational levels can still work for big companies. But even they may notice a decline in the efficiency of this process. And in my experience, small companies can’t afford to waste time on five-year planning.

Nevertheless, we can’t give up on planning. Company leaders need to know where the business is heading and why; otherwise, they could end up in the wrong place.

My suggestion is to switch your focus toward more “directional” things like the mission (how you want to change the world), values (who you are), vision (what the future will look like when you change the world), and your principles (how you make decisions). And plans, in this case, can be as flexible as needed, depending on the organizational and external context.

Some say the world is turning into a cynical place. I believe that vision, mission, values, and principles make even more sense in the 21st century than ever before. A company’s values, vision, mission, and principles determine its future. They can be—if devised accurately—a self-fulfilling prophecy. Based on them, leaders hire people, create teams and inspire them to move forward. So, these intangible things define who and where you’ll be in five or 10 years. And I think this is the closest we can get to long-term planning today.

When the war began, our plans shattered. To get back on track, we turned to the core and asked ourselves some questions. You can ask these questions about your own business.

• Who are we? For example, we know how to teach people Java programming, and even more important, we love doing it.

• What do we want? We believe in building a scalable training system to help as many people enter the IT industry as soon as possible. Hence, our mission is to retrain a million people to become developers.

• What's our external context? We understand that in 10 to 15 years, a massive number of jobs could disappear. Still, I think the demand for software developers capable of implementing innovations will grow.

• What are our values? People are our core value: employees and users. That's why we spend time improving our products, increasing engagement, and developing our community.

The answers to these questions should represent the core of your long-term strategy. I confess: We don't have a 10-year plan with quarterly objectives. But we have a general direction and several short-term plans in motion.

I call one of the strategies we use "zoom in, zoom out." To ensure you're moving in the right direction, constantly switch between the strategic level, short-term goals, and the current context. For example, when the war started, we focused on helping our employees get to safer places and staying in touch with them. As soon as they settled down, we started analyzing the situation and devising new objectives and plans. This "zoom in, zoom out" process has become permanent, and we review our plans every month.

The second practice is generating hypotheses and testing them. Often, it's hard to predict which idea can help you achieve your goal, so trying them out is the only way to find out. I believe modern companies—especially startups—should experiment a lot, perform A/B testing, teach teams to work with statistics and data, learn how to interpret test results and scale the best solutions.

And the third practice is information sharing. Since your planning will rely on the results of your experiments, everything can change quickly. Team members must keep up, so communication becomes crucial.

Some companies create a data keeper role; this is someone who collects the data of all experiments, organizes it, and shares it with the team. Others hold regular ask-me-anything sessions to answer employees' questions or demo meetings to share recent updates and plans. Plus, chats in virtual spaces like Microsoft Teams or Slack can be extremely useful.

All these practices, combined with the long-term approach I described above, can help companies stay afloat, grow and move forward. And I believe they can prepare you for the future in this turbulent, incredibly complex modern world where flexibility is the key to success.\

Also published here.