Most organizations understand the need to plan for the future, but fail to take actual steps toward achieving their strategic goals and take their business one step further. Even worse, failing to plan may put the business into hardships and failures. Though market changes and other dynamics are in constant flux and are therefore difficult to mitigate, having a long range plan is a key to creating stability, purpose, and direction in your business. By engaging in the long range planning process, you not only define what your business is today, but what you hope it will be in the distant future. In this post will we review the long range planning definition and dive into the details of long range planning.
We’ll start by understanding the definition for long range planning to help answer the question of “what is long range planning”. Long range planning is the process used to implement an organization’s strategic plan. It is about aligning the business’ long-term goals and developing action plans in line with the strategic plan. Certainly, accounting for external variables, accurately forecasting future market conditions, and determining the need for future diversification can all require almost prophetic vision which is not what a long range planning tool can achieve. However, planning long-range helps your business engage in self-scouting by assessing strengths and weaknesses and creatively proposing solutions that will propel your organization forward. It will also provide the concrete immediate benefit of charting a path to future success that can focus and drive the collective efforts of your team, resulting in greater productivity and vision.
The times scale for long range plans can vary from three years to one or two decades depending on the type of business. For example, companies where returns are measured over long periods of time will need a longer outlook whet thinking about their long range planning. A long range plan is not about fixing immediate issues, but about changing the direction of the organization to meet its long term goals.
Strategic planning is a process to determine long-term organizational goals after careful examination of the organization’s current business and what it should become. The final strategic plan will usually consist of non-actionable goals and statements of what the organization should focus on. The objective of the Long Range Plan is to turn these strategic plans into actionable steps to achieve the goals. Long range strategic planning is when you combine the two pieces together.
Although there are no standard templates for creating a long range business plan, below we have identified a list of things that are essential to a long range business plan and that should be included in the long range planning process.
A company mission and vision serve as a guide to your long range planning activity. You don’t always know where you want to go as a company until you know where you stand currently. All functions of a business are guided by its mission, so one of the first steps you should take in developing a long range plan is to define the mission of the organization. This creates an identity that can guide your long range planning for years to come. The statement should answer the key questions that drive your business: Where is your company headed? What do you want your company to be? Have them written down, then you’ve completed the first and most critical step in creating a long term strategic plan.
Vision is second only to mission in determining the thrust of your long range business plan. It provides concrete ways for stakeholders, especially employees, to understand the meaning and purpose of your business. Unlike a mission statement, which describes the Who, What and Why of your business, a vision statement describes the desired long-term results of your company’s efforts which is all based on your long range planning. Think about where you want it to be in five, ten, or twenty years. What successes would you like to celebrate at those waypoints, and what do they look like? How will your mission grow or change as your business confronts and overcomes obstacles and continues to grow? What kind of culture shift will be necessary for your business to conquer near-future obstacles and adapt to continued future success? What other lines of service or geographic regions will you want to enter eventually to open new markets? These are key considerations when defining your vision. Research shows that employees who find their company’s vision meaningful have engagement levels of 68%, which is 18 points above average. A strong vision statement will allow you to sail through the rest of the long range planning activity smoothly.
A good exercise that dovetails with long range planning is conducting a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. This will provide you with points of focus for your long range plan by illustrating the things that provide current successes, the weaknesses that are holding your business back, the opportunities for future success that are in front of you, and the threats to consistent success that may emerge.
A SWOT analysis can show you where you need to improve in the present to realize future gains. It also defines areas of opportunity and provides a chance to talk about how to grasp them. Finally, it forces you to assess your weaknesses that can result in future threats to your business and consider ways of mitigating risks and diversifying to strengthen your business.
Long-range planning is focused on long-term success, but to be successful in the long-term a business must remain viable in the present. Therefore, don’t forget to stagger goals and create ample opportunities to gain successes and avoid threats throughout the duration of your long rang plan term. For example, it’s a good idea to set short-term, intermediate, and long-term goals for your business. This will help create a trajectory of consistent success that not only provides concrete stability but will also create a culture of success for your business in which you and your employees refuse to accept failure. Charting out goals throughout your long range plan duration also provides a road map for progress and gives you a way of being accountable for goal attainment throughout.
Short-term goals should include everything you want to achieve over the next 36 months. They should be “S.M.A.R.T.” (Specific, measurable, actionable, reasonable, and timely). An example of S.M.A.R.T. goals can be “increase online sales by 25% in 6 months” or “launch this product by Q2 2021”.
Thinking about future successes and defining goals is critical, but don’t forget to set the strategy as well. Think of your long-range plan as a road map. A road map isn’t very helpful if it just plots potential destinations. Rather, you need to see the roads that connect those destinations to navigate the journey. Strategy provides those byways to success, so make sure that they are well-conceived, practical, and adaptable if the circumstances change. Detours happen, and you must know how to get around any metaphorical bridges that are out there. Strategies are the steps you’ll take to meet your short-term goals.
An action plan is an essential part of the long-range planning process. It puts your strategies into actionable items. It is a working document that is easy to change and update, specific about what, when, who, how the action will be carried out and measured.
Long range planning activity is not a one off session that you put off after the plan is created. You need to check in periodically on your progress and make changes to your goals, strategies or action plans if they don’t make sense anymore. As you modify your plan, keep in mind that no plans are ever perfect. You will be confronted with unexpected challenges that need you to change something in the long range plan immediately. Be agile and take advantage of opportunities to improve upon your current plan.
A long range plan is also known as a strategic plan. The core elements inside a long range plan include but not limited to objective, strategies, and tactics. An example of one piece inside a long range plan can be as followed:
Long Term Objective: Triple the current user base within next 5 years
Strategy 1.1: Implement free premium plan to attract new users
Strategy 3.1: Increase
If your organization performs better than you have expected, or worse, or if the market condition has been for the product or service you provide, you can always go back to the long range plan and make changes to it.
Success isn’t something that just happens by coincidence. It is the product of a sound strategy, critical thinking, and timely execution. Long range planning will help you work towards your actual long-range plan and can help your business harness the power of the present and plot a path to a more successful tomorrow.
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