We still need good old long-term thinking
“Fast-changing world” is a dangerous myth
“Fast-changing world” is a dangerous myth
I have had dozens of conversations with entrepreneurs who tried to persuade me that long-term thinking, strategizing and planning become redundant and invaluable in our “fast-changing world.” For me, it is nothing more than an excuse to avoid a complicated job.
Predictably changing world
Booking dot com, a Dutch online travel agency (OTA), was founded back in 1996. In 2019, before the pandemic severely hit the travel industry, its revenue reached an impressive number of 15,7 billion US dollars. But 12 years earlier, in 2007, it was ten times as less. It may seem that OTAs ate the world, but, according to some sources, they have captured not more than 40% of the total global travel market (hotels, airlines, packaged tours, rail, and cruises). They, beyond doubt, have revolutionized the industry, but they didn’t do it overnight. The first bitcoin was mined in 2009, but its price surged only in 2017.
People love acronyms. There are few journalists and bloggers who haven’t used the words “VUCA world” or “BANI world” at least once. They try to convince us that the world is a place where we wake up in conditions different from what they were when we fell asleep. But this is not true. The world is undoubtedly changing, but the pace of change is not THAT high, and most changes are predictable and anticipated.
Even COVID 19 hasn’t changed our lifestyle as significantly as much as some prophets warned two years ago. In Europe, where I live, people live pretty much the same life they did in 2019. Remote work and online shopping have become an integral part of our lives, but it would have happened anyway, and the pandemic only catalyzed the process.
Diffusion of innovation
Scientist Everett Rogers called his theory “diffusion of innovation”. He found that the development of any innovation moves along a similar trajectory. First, it is picked up by “Innovators,” which are usually about 2.5%. These are people starving for novelties. They are followed by “Early adopters” (13.5%). Most users come to innovation in the stages of either “Early majority” (approx. 34%) or “Late majority” (also about 34%). There are also 16% of “Laggards” — stubborn conservatives who master innovation only when everyone around them does it. For example, my father still uses a push-button phone.
The illusion of a “fast-changing world” arises because if we are not “innovators” by nature, and if we don’t work in an industry (for instance, e-commerce), we often belong to the “late majority.” That is, we notice the changes only when they become widespread. And this makes us feel that the world around us changes fast and erratically. But strategists tracing the signals of changes see the future shifts long before they become commonplace.
Agile, great and terrible
Being “agile” is essential, but only when it comes to tasks for which the agile approach is suitable. On February 11–13, 2001, at The Lodge at Snowbird ski resort in the Wasatch mountains of Utah, seventeen people met to talk, ski, relax, and try to find common ground. What emerged was the Agile ‘Software Development’ Manifesto. As you can see from the movement’s name, it was created by software developers and for software developers as an alternative to the old-style heavyweight procedures.
But what is good for software developers is not necessarily valuable for top executives. Every company must be “agile” and flexible (to an extent) in some routine operations. But there are few better ways to destroy a company than being “agile” in long-term goals and priorities. A strategy is a kind of social agreement between the shareholders, board of directors, and workers at all levels, from top executives to field employees. This agreement provides focus as an answer to two questions: what to do and what not to do. And it is crucial.
I have seen many firms managed by creative and impulsive entrepreneurs for whom following once formulated long-term past for years was torture. Instead, they set new goals and priorities for their teams every time they read yet another inspiring book. And as a result, the atmosphere of indifference and apathy was the hallmarks of such companies. Employees met the new boss’s initiatives with stoic calm. They knew the boss would forget about them in a week and come up with a new one soon.
Assets
Any company must formulate a long-term vision. When the job is done, the company’s leadership needs to find such a way to employ and develop critical assets that will make the path to the goals shorter. And assets, both tangible and intangible, are not the things that can be reshuffled and changed frequently. Especially when it comes to such a precious asset as the corporate culture. So, long-term thinking is here to stay.