New-age value creation: Working backwards from the future you envision

What percentage of time do you think things go according to a plan? Not surprising that senior managers who sit on NSE boards, will say something like: “Well, maybe 5 to 10 percent of the time, that things go according to the plan.”

Companies like Google and Tesla do not manage the business through traditional, detailed five-year strategic plans in the way many more conventional businesses and development partners do. Instead, they combine having a vision, long-term direction with short planning cycles and constant experimentation.

Have a long-term ambition

Rather than a detailed five-year plan, trying to predict what will happen, global leaders have a vision that may extend 10–30 years. Consider these vision statements: "Organise the world's information and make it universally accessible and useful" for Google. And, “Accelerate the world's transition to sustainable energy” for Tesla. These visions act as a strategic guiding ‘north star’.

Work backwards from the future

Instead of asking ‘What will we do over the next five years’ they ask ‘If we achieve our vision, what must be true’ This approach resembles the ‘working backwards’ philosophy popularised by Jeff Bezos at Amazon.

Strategy is treated as a portfolio of bets

Rather than producing one fixed strategic plan, market leaders continually allocate resources across initiatives with different time horizons. Constantly monitored, if an initiative isn’t working the approach is revised or it risks being cut. For instance, a simplified portfolio might look like: core business - 70 percent, emerging businesses - 20 percent, and radical innovations - 10 percent. This echoes the ‘70-20-10’ innovation framework that has become associated with Google.

Planning happens continuously

Leading edge organisations still produce annual plans and multi-year financial projections for governance and investor communication, but the ‘nitty gritty’ operational strategy is revisited frequently. For market leaders, typical planning rhythms include: annual strategic themes, quarterly priorities, monthly business reviews, weekly management meetings and daily performance dashboards. Aim is to allow for rapid adjustment as markets, technology and customer needs constantly evolve, often unpredictably.

Objectives replace detailed plans

Many technology firms use frameworks likes Objectives and Key Results – OKR. Quite simply the objective is the what and the key results is the how it will be achieved. Key results need to be clear, do-able yet ambitious, measurable, with a timing. . Rather than specifying every activity years in advance, teams decide best path with a ‘test and learn’ approach.

Assume the strategy is incomplete

Traditional planning often assumes enough information exists to define the future. Somehow we fall prey to the seductive belief in the beauty of absolute certainty. However, leading innovators assume uncertainty taking into account, markets will change, competitors will surprise them, and technologies will evolve. And that, some of our assumptions will prove wrong. Strategy is treated more like an artist’s unfinished canvas, where insightful forecasting is more a process of testing assumptions.

Customer learning drives evolution

Customer sales and satisfaction power the business. Companies like Google and Tesla continuously gather signals from customer behavior including product usage, experiments, engineering progress, market data and AI-generated insights.

Resource allocation matters more than the written plan

Many top executives argue that strategy is best reflected most clearly where an organisation invests its people, time, and capital. Questions to are: Which products receive the top talent? Which markets receive investment? Which capabilities are built? Those decisions often reveal the real strategy far better than a planning document.

What would the business wizards say to this approach?

Guru of innovation, Clayton Christensen would stress -- Build capabilities that prepare you for future disruption rather than optimizing only for today's business. Steve Blank’s approach would be to -- Treat strategy as a series of hypotheses that must be validated through customer discovery. Eric Ries would stress - Make small, measurable experiments part of everyday business execution.
In fast-changing markets like Kenya and East Africa -- it might be better to move away from producing ‘hope for the best’ static plans, shifting towards creating more of an adaptive strategy system. Instead of delivering a document every five years, make sense to establish a cycle of continuous sensing, experimentation, quarterly OKRs, rapid learning and smart resource allocation. Now, that’s a strategy.

David [email protected] is a director at aCatalyst Consulting.