Earlier today I was with a small group entering a conference room for a meeting that I can't tell you about. The group that was leaving the room had apparently been working on a 3 year plan.
I thought that was quite amusing and made a few jokes about how even a 3 month plan is a stretch. Luckily, I'm not alone in thinkng that 3 year plans are built on shaky ground. Adam Bosworth just posted a link to a talk he gave about why SalesForce.com is doing so well.
His summary slide sums it up this way: not because of intelligent design, but because of intelligent reaction. (And not because of a great 5 year plan.)
Listen to the talk. It's a good one.
Posted by jzawodn at September 28, 2005 10:13 PM
One of the most dangerous things about that kind of long-term plan is that it makes it sooooo easy to respond to critical feedback with "it's on the roadmap", as if priorities decided by committee a year ago need not be influenced by reality.
It's important to know where you're headed and to have a good map how to get there, but it's also important to be flexible enough, for example, to get off at the next exit for a bathroom break, if the current circumstances so dictate.
Jeffrey
Well, but trying to shape reality so that it fits your plans is being done by certain very public figures. Though I guess it takes more money to sustain such actions than most companies could afford.
If a 3 year plan's "out there", what about a 3 year cash flow? I was pitching to someone recently (no names mentioned) and was scolded for not presenting a three year plan / cash flow. "Give me a break", I said. "Simply by asking the question, I know you have no idea about the space or my business". I had included a marginal costing model, which identified an estimate of fixed cost in year 1; an estimate of revenue per sub (we're a subscription and ad model); and variable costs (including a estimate of the cost of customer acquisition) and other incidental variables such as transaction fees... concluding that to reach break-even would require a certain number of subscribers, etc. Understanding the marginal costing model is fundamental in a web based subscription business in my view. Trying to sketch out a detailed 3 year plan and making a whole set of assumptions (which are without doubt going to erroneous to some extent) is a waste of time and effort. Now, I describe myself as a bit of a logical incrementalist... have a vision or a sense of the direction of over the course of three years is fine, a kind of funnel heading up and right, a set of loose boundaries if you will, but that should be sufficient in a dynamic changing industry.
what's needed is a plan based on a compass, not a clock (as Covey says). If the industry goes back to pop up ads and flashing banners, how will a company react?
Answer- they shouldn't "react." They should stick to what's best for them in the long run
Heh, that's a great comparison - the know-it-all socialists in their ivory towers vs. actually listening to customers and giving them what they want.
