This question is flawed. Why? It presumes strategy is just about the long-term. While maybe this was OK in yesterday’s predictable, stable world, it is not OK in today’s rapidly changing, disruptive environment. So, what’s the answer to the question in the title? It depends. But more importantly, is this even a relevant question to ask? Consider these two points:
First, a strategy must be about and address both the long- and short-term in a disruptive and turbulent environment like what we are and will be experiencing. It is important to recognize that strategy cannot be developed, planned or executed in a vacuum. Organizations must continually factor in business and environmental disruptiveness and turbulence into their strategic thinking, decision making and regular, periodic strategy reviews (not just at an annual offsite). The result often is that while strategic direction and purpose may remain stable, the strategy and its execution need to be more dynamic, adaptive and responsive to remain relevant, let alone effective. But is doing this sufficient? No, it is not.
Second, if strategy and strategy execution need to be more dynamic, adaptive, and responsive, then most organizations will need to improve and build new capabilities (actually a set of them) to accomplish this objective. These capabilities create and sustain an organization's state of readiness, preparedness, and being able to act (and adapt) in the face of market turbulence and disruptiveness. However, these capabilities (and ensuing attributes) are not sufficient by themselves either.
Yet, combining both of these makes for a winning combination. Why? Sustaining organizational readiness, preparedness and ability to act enables an organization to have both a dynamic, responsive and adaptive strategy and strategy execution processes and capabilities necessary to not only survive but also thrive. This potent combination enables an organization to effectively respond and adapt to disruptions in a very timely manner. More importantly, it can enable an organization to proactively disrupt others, creating a greater advantage for itself. Bottom line, it increases an organization's capability and odds to dramatically improve performance and realize more of their potential value.
So instead of trying to figure out how long strategy should be, it is far more important for an organization and its leaders to regularly (at least quarterly) ask and discuss the following questions:
Is our strategy still relevant for both the short- and longer-term? If yes, will it remain so?
When we (preferably proactively) review and discuss our strategy and execution processes and capabilities given the disruptiveness and turbulence we face and will face in the future, do we identify steps we need to take? If not, should we be doing so?
Is the organization ready, prepared, and able to adapt and act (on these steps) to more effectively compete?
If these questions concern you and/or you want to learn more, contact me for a free initial consultation or executive briefing.
To review some of the underlying source information that led to this article, please see:
• Ken Favaro’s article in Strategy+Business entitled, “Strategy talk: How long should long term strategy be?” ).
• McKinsey’s Three Horizon Model introduced back in 2000
• Steve Blank’s article in the Harvard Business Review (under disruptive innovation) entitled “McKinsey’s Three Horizons Model Defined Innovation for Years. Here’s Why It No Longer Applies”.
• Mihai Ionescu’s recent post entitled, “How to Define Our Strategic Horizon”.
Stay on the lookout for upcoming articles on Myths About Strategy and Implications for Your Organization and Why Managing Paradoxes Is Essential Success.
Copyright, Jay Weiser and Weiser Strategy Group, 2019.