Whenever I think about the subject of planning, a quote from Benjamin Franklin always pops into my mind: “If you fail to plan, you are planning to fail.” Successful people, and successful businesses, all know how important planning is. But in a world of accelerating technology-driven change, what kind of planning are you doing? From a results perspective, there are basically two types of plans, and it’s important to be able to distinguish between the two in theory as well as practice.
First, there’s incremental planning. This is the type of planning most large and small companies do. Growth is forecasted to rise in a rational and incremental way. Innovation is focused around logical extensions of current product and service offerings. There is an ongoing focus on reducing costs by implementing new lean strategies and there is a heightened focus on being agile so businesses can react more quickly to changes in the marketplace.
A good incremental planner might work best in situations where routine and regularity reign, where everyone knows what to expect and when to expect it based on their past experience. Incremental planners see the future as full of uncertainty and disruption that can come out of nowhere. Staying focused on executing the current plan is key even if the plan is being rendered increasingly irrelevant by new technology and industry disruption.
Organizations don’t think of or call their planning incremental, but in reality, that is what most planning is designed to accomplish — incremental results.
Over the decades, shareholders have learned to expect incremental plans and therefore incremental results. But today, incremental planning and thinking will not position you to thrive in the years ahead, and will likely position you to either stay slightly ahead of flat results, or fall behind a little more every year. Today, it’s very easy to fail slowly like Kodak, Polaroid, Motorola, and many others did throughout the 1990s — or like Sony, Blackberry, Barnes and Noble, and others have done more recently. All of them used incremental planning and thinking, and yet all fell behind as the forces of predictable change worked against them.
It’s now time to consider a new type of planning, transformational planning — which requires an entirely different mindset.
Transformational planning, as the name suggests, is focused on using the forces of change that are shaping the future to drive innovation and accelerated sales. A transformational planner understands that we are now living in a period of unprecedented disruption and opportunity. They understand that reacting and responding to change will not allow them to rapidly accelerate growth. They also understand that while being agile is important and a great way to respond faster to changes coming from the outside in, agility will not allow them to jump ahead. In addition, they know that while it is important to have a lean initiative in place, lean is focused on cost reduction, not accelerated growth and gaining a new competitive advantage.
Before the launch of the Apple Watch, many in the media using incremental thinking predicted a flop. Apple, on the other hand, was using transformational planning, and in all of 2014 there were 720,000 smart watches sold — but on the first day, Apple sold over a million smart watches, and that was only in the U.S.
I know what you are thinking: Apple is big and has plenty of cash; we are small and there is never enough cash; we can’t do transformational thinking and planning. You are wrong!
Transformational planning involves developing and using the new competency of being anticipatory. By identifying and seizing upon the predictable Hard Trends that will impact your business and industry, you can design a plan to jump ahead with the confidence that certainty offers, and with much lower risk. (I have written extensively about how to separate the Hard Trends that will happen from the Soft Trends that might happen, so in this article I will only cover a few basics and instead keep the focus more on the different ways to think and plan.)
They key to transformational planning, in essence, is using the Hard Trends methodology to make the future more visible, learning to recognize the Future Facts, and choosing to be the disrupter rather than waiting to be disrupted.
You can either sit back and wait until the disruption hits — take a “wait-and-see” approach — or you can get active, what I call being pre-active, taking positive action based on future known events.
Disruption changes our world and keeps its many leaders up at night. For many, disruption is a familiar foe. But realize that disruptive technology will only disrupt you if you didn’t know about it ahead of time. When you’re anticipatory, you’re creating changes and driving disruption from within rather than being disrupted from the outside. And when you’re practicing transformational planning, you can not only see and accurately anticipate those disruptive technologies, but you can use them to create new revenue streams, new products, new services, and new markets. That’s when you drive growth and change from the inside out so others have to react to you instead of you reacting to what others are doing. In this scenario, disruption is your competitive advantage.
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