How to Plan for the Short Term

How to Plan for the Short Term

Being quick, nimble and reactive is the order of the day. Start by getting rid of the long-term mind-set

Calendar Versus Event Planning

Any company's strategy must be accompanied by planning for how to achieve it. However, managing for the short term means that the planning process must be an evolutionary one. And it must recognise that to move forward given the short-term demands of the business environment, organisations must achieve in incremental, short-term steps.

Traditional planning has been calendar-based. A corporate mission is developed, usually at the top. The word is handed down, and off everyone goes - often back to being distracted by the day-to-day events that can very quickly make the original strategy seem distant or even irrelevant.

Of necessity, strategic planning has to become more event driven - not just by major events, which happen relatively infrequently, but by the cumulative impact of smaller events.

At Redix International, a software development company with offices in Freehold, New Jersey, and Walnut Creek, California, president and CEO Randall King meets weekly with his key managers; those meetings constitute the company's planning process. "We have a long-term plan for items we want to incorporate into the software," says King. That development plan gets modified perhaps three to four times a year but not based on any particular schedule. Rather, the shifts in direction occur based on discussions during the weekly meetings about what demands from clients reveal about where the marketplace is heading.

When the development plan shifts, the company's chief technical officer not only redirects programming efforts but makes sure to explain to the software developers why the change is necessary and how it affects the company's metrics for success. That ability to integrate responses to market demands with clear communication about how changes in the plan relate to the company's overall strategy is a classic example of event-driven planning.

Organisational Pace Versus Individual Pace

Across the board, senior executives and middle managers believe that organisations make decisions primarily for the short term. By contrast, these same executives and managers see themselves personally as making management decisions on a medium-term basis. The obvious question that raises is how in sync managers are with the pace of their own organisation. At a time when companies must deliver quarter-by-quarter, a primary focus beyond that time frame can be problematic.

When managers perceive a difference in focus between themselves and their organisation, it can become a self-fulfilling prophecy. Even if an organisation is managed well for the short term, managers who don't perceive that it is, or who believe that managing for the short term is a negative, can become dissatisfied and impede progress. If managers do not have a clear understanding of the forces driving the need to manage for the short term and how their decisions roll up into the company's overall plan, any need for rapid change is more likely to be perceived as arbitrary, not well thought-out, short-term and therefore negative.

That difference in perception is another distinction between short-term management and managing for the short term. Short-term management can also be seen as shortsighted; truly, managing for the short term isn't.

Because they may be better positioned to see short-term moves as pieces of a larger puzzle, senior executives sometimes have an advantage over managers in the context of long-term strategy. Executives tend to see the environmental forces driving the need to make short-term plans - the shareholders, the global environment, the capital markets. By contrast, lower-level managers may see only what looks like an arbitrary directive from the top and follow their own plans for succeeding in the business, which may be based on their contact with customers or their personal desires.

The challenge is to increase everyone's comfort level with short-term managing by providing the strategic context for it.

That was one of the refreshing aspects of the early Internet start-ups, which changed - sometimes radically - as the market evolved and shifted. The ability to change rapidly was considered a positive in most of those companies. Granted, they were entering new territory, where gaining early market share could determine leadership positions, and experience offered few lessons in how to proceed. One of the lessons those companies taught the business world is the value of having the flexibility to change with market changes and the ability to integrate those rapid changes with the planning process.

That degree of flexibility means that an organisation needs to be able to manage the inevitable inefficiency as projects and the resources already devoted to them are abandoned or reassigned. That is part of the price required for being more efficient in pursuit of the overall strategy.

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