Compared with the dated sequential planning process, long-range planning positions businesses better for achieving long-term goals, eschewing moment-to-moment reactive revisions and thus avoiding the natural pitfalls of the sequential approach.
Many major businesses in industries like energy, pharmaceuticals and oil & gas, already take a long-range approach to planning as a matter of course--with the outcomes of exploration or research not paying off for decades, no other planning method works. But even those companies which already understand the value of long-range planning rarely achieve the degree of success with it they should—a conundrum we hope to help with, with these six pointers on optimization.
Six Long-Range Planning Tips
Take a holistic approach to strategizing. According to research by Ventana Research, those companies which report a high degree of integration between their high level strategies and their individual project strategies also report the highest levels of satisfaction with their process, improves efficiency, and superior outcomes. When your company develops a high level strategy for success, it’s important that the individual projects making up your overall push all unite behind that same strategy, instead of producing contradictory and inefficient outcomes. A holistic approach to strategizing will thus inevitably help you optimize your long-range planning
Amp up your software
Utilize better software for processing the complexities of modern business. Modern businesses operate on a level of complexity few could imagine even a few short decades ago, yet the software many use to make important long-range planning decisions remains the same. Spreadsheets, for all their admirable traits, simply cannot be expected to keep up with the complexities of modern business—a minor change half the globe away can completely alter the financial calculus of your business strategies, and only modern prescriptive analytics platforms can be expected to keep up with that level of complexity. So if you want to optimize your long-range planning, make sure you have the right tools for the job.
Integrate long-range planning with the budgeting process. It may seem an obvious move in hindsight, but many companies don’t integrate their long-range planning process into their budgeting process, producing inevitable points of conflict between day-to-day finance and long-term financial goals. As with our first point about keeping high and low-level strategies synchronized, taking this step towards uniting your planning process from top-to-bottom is crucial for getting the most out of your long-range planning process.
Know your revision points
Understand the key revision points of your business. It’s a cliché of war that no plan survives first contact with the enemy, a truth which holds its own just as well in the modern business world. Whatever your industry, there will certainly be periods that make or break your ongoing strategies; the outcomes of drug trials for a pharmaceutical company, government budgeting for contracted businesses, etc. Understanding when these periods occur in your industry is crucial to keeping your long-range planning appropriately reactive and relevant as the ‘situation on the ground’ develops.
Think "scientific precision"
Value data appropriately and act upon your analytics. Long-range planning without proper data collection and action based upon hard facts is little more than guesswork, no matter the genius of the planners or strength of the planning tools. Make sure that you’re gathering relevant data, parsing it to a useable form, and taking action in line with that data over ‘gut feelings’ and the rumor mill—long-range planning is a science, so scientific precision based on hard fact is crucial to optimizing outcomes.
Optimize your business end-to-end
Optimize at all stages of business; strategic, tactical, and operational. Long-range business planning isn’t a concept which sould be solely applied to the highest levels of your business strategy. Look at each aspect of your company; the strategic long-term goals, the major moves which position you within the industry. Your tactical methods, which you utilize to maintain dominance in the short-term and position yourself against the competition on a daily basic. Your operational methodologies, which determine the efficiency of your logistics, your worker output, how your cash flows. Nothing is too trivial to include in your long-term planning, so long as you have the data and planning tools necessary to make rational moves forward.
Long-range business planning is criminally underutilized by most businesses, with even the savviest failing to integrate long-term strategies thoroughly into how they do business. With the right tools easing the process and a solid understanding of your industry, long-range planning can and will improve profits, secure your company’s position in the industry, and pay dividends well worth the investment of effort and resources.