BLOG

Is Your Business Planning Being Derailed by Short-Termism?

New Zealand businesses aren’t great at long term strategic planning, or – if they are – it often comes unstuck in the execution. Why aren’t we better at thinking ahead? And what can we do about it?

I wonder if the almost endemic short-termism in New Zealand businesses has something to do with our lack of history. We simply haven’t been around long enough as a nation to have learned and relearned from the pain that inevitably, with the passage of time and changing context, follows from focusing too close in. We lack an innate appreciation of the long term consequences of short term thinking. Scale, or lack thereof, likely also plays a part. We’re not big enough to sustain a strategic track alongside the twists and turns on the road.

Every time we set about “strategic planning” it’s with the committed and fervent energy borne of the realisation that change is necessary. There’s a pain point, a burning platform or a clear and present threat to our tenure, whether that be at the individual or enterprise level. The recognition of an untenable present brings focus and clarity to the potential benefits of change.

This energy arms us with the confidence to see beyond the “now” to a desirable altered state. And then it so often comes unravelled in the execution. The realities of the ‘here and now’ come rushing in and we find ourselves scrambling to re-balance, re-prioritise, and re-cut the business case.

In the ICT world I suspect that our lack of long term thinking and small scale are further exacerbated by the bad taste and hesitancy that inevitably results from the historical failure of a disproportionate number of our large projects, in both public and private sectors.

I was listening to Radio New Zealand’s “Cities of Tomorrow” panel discussion the other day. When asked what the single biggest determinant of a sustainable city is, an expert panel member from France responded without hesitation– “Cities need to think and invest on a long term perspective”. Cities indeed provide a graphic illustration of the consequences of short-termism as the demands of growing populations stretch infrastructure beyond coping, much less enabling, vibrant and productive local economies. Auckland’s traffic congestion is a good example of the product of yesterday’s short term thinking on today’s productivity.  

However, it’s not enough to simply think further ahead. The rubber must hit the road with hard investment and, by inference, action.

Now here’s the rub. My observation over many years in and around the ICT patch, including as a CIO, is that we do make a genuine attempt to think long term. If anything, the fact that our world – the world of technology – has always moved fast, relative to most others, compels us to think ahead.

When we hit bumps in the road they tend to be rooted in one of two things; either the tactical business imperative (most often intra-year profitability or shareholder value, often an EBITDA measure that demands we curb investment) changes the playing field and the notion of mid to long term investment surrenders to short term expediency, or we fail in the execution because we’ve tried to design to a future that is just too far off.

My tips for ICT planners?

  • Think trajectory rather than end-state
  • Perfection is not your friend. No plan ever survives the first engagement with the enemy
  • Design and act close in, focusing on foundations that allow for flex
  • Focus long term thinking on the attributes of your best guess at a future state and measure your progress towards them
  • Keep a cool head and an open mind – things will change

A parting thought. The increasing disruption in so many industries demands that we don’t prescribe our medium to long term state.

The public sector is often and widely derided as slow to move, cumbersome and lacking in vision but perhaps this sector is, in fact, our yardstick for ICT strategic planning. It has scale, and certainty of tenure by dint of the fact that its mandate is to serve successive elected governments. It is not subject to the short-termism that characterises electoral cycles or CEO turnover in the private sector.

Our public sector’s determination to stay the course on consumption models in the provision of ICT, in the face of resistance from vested interests both external and internal, is highly encouraging. It says to me that long term thinking is being employed and the need for agility has been well and truly recognised. These days the two go hand in hand.

To discuss the topic further, please get in touch with the author, Michael Foley, on 021 777 684.

MORE ARTICLES

Operating Models: Much More than Organisational Design

Customer Strategy vs Digital Strategy: Don't Let the Jargon Get in the Way

Dear Mr Vendor: Leasing is Not ‘as-a-Service’

Thanks – you're signed up. Enjoy the blog.
It's a fascinating time we live in.