No business can survive without a well-thought out plan, and leaders usually find efficiency in separating their strategies into two phases: short-term goals and long-term goals. This article aims to look into what separates the two and define their characteristics. The post would also explore what type of circumstances could arise to drive business owners to adjust their plans. In addition, we’ve compiled some tips that would hopefully serve as a guideline to help companies streamline the process of updating their plans, no matter the circumstances.
Defining short-term plans
Short-term business plans are usually centered on a three to six month time frame. Having consistent short-term goals lets a company gather quick feedback and keep focus on driving day-to-day operations. During short-term planning, business leaders examine the immediate status of their company to figure out what works and what needs to improve. One aspect of short-term planning involves finding solutions to identified problems, such as scheduling training courses to address a lack of technical skill from employees or hiring repairmen to improve the condition of production equipment. Short-term plans also tie-in to long-term goals. For example, a company may strive to double its consumer base over the next six months, a goal that could in turn influence revenues for years to come.
Examining long-term goals
Long-term plans involve the company’s mission for success over the next four to five years. Planning for the long term means looking into how businesses can reach the targets they set out at launch and how the company could establish a solid position in the economic environment. When planning for the long term, businesses often consider factors such as major capital expenditures and companywide policies. Long-term goals enable leaders and employees to make informed decisions on business practices, marketing and budget.
Achieving synergy between the short-term and the long-term
Heidi Hillis, a Master of Business Administration consulting coach, said long-term goals need to serve as the motivation behind a company’s short-term plans. Short-term goals are the “stepping stones to your long-term vision,” Hillis noted. Aside from guiding the immediate needs of a business, short-term plans ultimately need to support long-term goals. A company, for example, might set out to increase consumer demand by 100 percent as part of its long-term plans. Achieving this goal could entail establishing a chain of short-term goals such as gathering customer feedback, studying competition or engaging in market analysis. Without actionable and measurable short-term goals, attaining success in the long term could prove difficult.
Plans change – often and regularly
The process of business planning involves a paradox. Companies are doomed to fail without setting out short-term and long-term business plans, but following plans blindly can also cause businesses to break down regardless. According to Tim Berry, founder and chairman of Palo Alto Software, resolving the paradox is the basis of management. Berry noted that business leaders have the responsibility to differentiate between consistent application of a strategy and sticking stubbornly to a failing one.
What managers, operators and owners have to realize is that by their very nature, business plans are wrong, Berry said. Trying to predict the future rarely pans out, so business owners need to adjust and keep pace with reality. The key to management, Berry added, is having the ability to analyze false assumptions and track where and how plans need to change.
Forbes suggests that leaders would benefit from viewing their strategic plan as a “living document” that remains relevant through evolution. Regular reviews for short-term and long-term goals can prevent a company from being unwilling or unable to change, a trait that Forbes cites as a major reason why strategic plans fail. “Your company and your strategic plan must be nimble and able to adapt as market conditions change,” the company noted.
Several scenarios may necessitate the need for changing a business’ strategic plan. Obstacles such as high-turnover rates, tough competition and faulty products could hinder the business growth. In addition, companies could also find themselves responding to a range of business crises such as technological failures or natural disasters.
Preparing for immediate needs
Proactivity is probably the most important aspect of adapting to short-term needs. Companies need to make sure they have sufficient crisis management strategies and policies to guard against any catastrophes that may arise can turn the need for a major business overhaul into a few minor adjustments in the face of adversity. With a well thought out crisis framework, centered on areas such as office premises management, IT, communications and employee well-being, adapting to market changes becomes easier.
Tightening deadlines for feedback, results
Adjusting for the short-term might also involve setting shorter timelines for data gathering and hitting goals. When unexpected market needs come, businesses should be able to monitor operational changes at an increased pace. For example, leaders working on monthly projections could instead examine weekly or daily timeframes to match the external market environment. Working at a faster pace amid short-term business adjustments could benefit a company’s growth as opposed to relying on the usual review schedule due to the risk of falling behind.
Prioritizing IT modernization
Another factor in keeping a competitive advantage during short-term adjustments is information technology modernization. One example of this is the rise of employees working from home amid the coronavirus pandemic. Companies with up-to-date IT systems were able to adjust to the “new normal” with ease, compared with businesses without telework policies. To learn more about IT modernization, visit the Potomac Officers Club’s “Secure IT Modernization in Today’s Environment,” which features federal and industry leaders discussing how businesses can adapt in times of crisis to maintain accessibility and connectivity.
Adjusting a company’s vision for the long-term
Adjusting for the long-term involves different strategies that come into play. One area of consideration for long-term planning changes is the use of experts or consultants. When looking into changes in strategy over the next four or five years, businesses may benefit from hiring advisors to provide guidance on funding, operations and the integration of individual components. Advisors may come in the form of business peers who have experience in a particular area that a company’s strategy changes focus on. Business owners might also look into entrepreneur community networks, which offer education, mentorship and peer networking.
Keeping pace with milestones
In addition, long-term planning adjustments are in line with milestone evolutions. As a company hits more and more of its financial goals, new projections and objectives need to be set. One way to achieve this would be to engage in conversations with customers and potential customers. Consider launching a comprehensive market analysis or feedback gathering initiative to determine areas of concern. The initiatives could help a business learn what customers are buying and what problems the company needs to solve moving forward.
The value of automation
For the long-term, a company could save a lot of time, resources and man hours through the power of automation. Establishing automated processes within components such as marketing, finance and operations would be a big help to any business with the systems to manage the related technologies. More information on automation and data management may be found in POC’s “The Future of Data Management” event. The virtual forum features discussions on secure information sharing, data analysis and task automation for federal agencies and other organizations.
The success of any business venture primarily depends on proper planning and preparation. Yet plans alone do not guarantee growth, managers and leaders should be able to adjust their plans in light of external and internal changes. We hope the tips outlined in this article will help you pursue a more guided approach to planning, whether for short or long term needs.