The Gap Between Short Term and Long Term Planning

Most small companies have a short term and a long term plan.  The short term plan is often the sales funnel and sales strategy for the next 6-12 months.  The long term “story” – That is the one sold to investors.  Unfortunately, there isn’t always a clear way to get from here to there. Sometimes, there is no reasonable way without changing the short and long term plans.... 

The short term plan is full of specifics:

• Spend this much this year
• Build these products or add these features
• Hire this many people
• Find this many customers

The long term plan is usually vague on the details, except for financial/sales ones:

• Exponential growth in sales
• Revenue growing to $100 million
• Capture 2 key verticals

Often there sometimes are vague product details about support large numbers of different markets and interoperability with everyone.

Creating a detailed and exactly plan for the next 5 years in all aspects of the company isn’t the answer either.  Detailed long term plans almost never are followed – too much changes in a small growing company – especially the ones that succeed. What is needed is some idea that passes the “smell test” of how the journey might be possible.  Having multiple general approaches is even better.

Not knowing what a realistic way to accomplish the long term goal makes it much easier to take any short term expediency at the expense of long term success. For example:

Sales wants to add a feature that takes 6 months to develop to be only used by one smaller customer to make the next quarter’s sales goal?

Great – no problem.   So what if this happens several times a year.

The real “so what” is a failed transition from scraping small company to an established medium size company because your company is constantly driving down dead ends.

One approach to doing this is for the management team to map out their first cut expectations in revenue, expenses, staff, resources, product development, operations, customers, and markets. Write down the assumptions everyone is making. Then cross check all of the assumptions against each other and iterate to one or more potential solutions.  Ideally this iteration is collaborative, but the CEO will often have to direct changes in some conflicts.   In some cases, no solution will exist; the CEO will have to change the overall strategy.

The plan itself isn’t the answer. However, the continual act of planning will help the executive team understand trade-offs and make the right ones instead of expedient ones. Don’t think it happens in your startup?  Can you describe a route from short term to long term success that you honestly believe?