#47: What is the Right Time Horizon?
When I'm working with clients on strategic planning, we always start far out in the future - on The Big Scary target that is 10 or more years in the future. I want them to think big, and to push themselves beyond the day-to-day of their business. But once we've finished with that, the next part of the process can sometimes be a stumper—the mid-range plan.
For many clients, it can be difficult to decide what time horizon to put on that part of their plan. I specifically don't put an arbitrary number on it because I wanted to leave flexibility in the planning, AND because I think that having to think more deeply about your plans makes you form better and more thoughtful strategic plans. Forcing everyone to plan for five years in the future would be easier, yes, and neater, but it wouldn't acknowledge the reality of the situation—five-year increments don't work for everyone.
So, when I approach these plans, I begin (as always with me) with questions. Is there a certain mid-range number that makes sense with your business cycle? Maybe you are in software development and you release new product every 18 months, so a three-year horizon would put you through two development cycles —enough time to really see results and understand if it is time to refocus or pivot. Maybe four years from now is the end of the decade or half-decade and it feels good to you to have some target to hit by then. Maybe some regulatory change is looming and you know that three years down the line is when you'll have to be fully prepared for that. Five years could just feel right to you for a target, and that's okay, too. The only limits I put on it is that less than three years is too short-term, and more than six gets too long-term.
The purpose of this is not to have some scientific process for deciding if three or four or five or (sometimes) even six years is the right length of time for your mid-range targets. The purpose is to think more deeply about it than to simply throw a dart at some arbitrary date in the future. The strategic planning process is a time to truly examine your business and craft a plan that works for your organization, specifically. And only you (and your team) will know what that right number is.