Long Term Planning — Crystal Ball Bash

Having done long-term (12 to 36 months) and short-term planning (3 to 6 months) for different businesses, I wanted to share a series of articles on what can be done better in planning. In this article I’ll focus on just long-term planning. I’ll try to set enough context — who’s involved and why they behave the way they do — and sprinkle in some humor to keep you entertained.

Meet the C-Suite Cast

CEO — Always ready to redefine the company’s mission, whether from “value” to “growth” or “growth” to “hypergrowth.”

CFO — Keeps an eye on the balance sheet while trying not to break into a cold sweat when the CEO mentions “aggressive growth.”

CRO — Wants ambitious goals but is terrified of the team burning out. Think of the kid who wants a rollercoaster ride but insists on wearing a helmet and knee pads.

CPO — Dreams up products that sound like they belong in a sci-fi movie (a self-stirring coffee mug that plays motivational speeches to up your morning game).

CMO — Dreams bigger than their budget. “Why have one brand when you can have twenty?” they exclaim, while everyone else wonders if they’ll need a second marketing team just for logo design.

Now replicate this cast for each business segment — a group president, a group CFO, and so on. You’ve got a battalion churning away with Excel and PowerPoint to develop an annual plan.

Prelude to Planning: The Opening Act

It’s kicked off by corporate finance in Q3 or Q4 of the current fiscal year, so plans are ready before the next one begins. They define schedules and templates like they’re organizing a three-ring circus — complete with juggling acts and tightrope walkers. Sometimes it feels like herding cats.

Performance: The Balancing Act

You essentially need to answer two critical questions in your annual plan:

1. If your operating expenses stay flat next year, how much can revenue and margin grow? In other words, can you grow a garden without watering it? Spoiler: you can, but it requires specific plant choices and maximizing natural moisture.
2. Now add an extra $5M, $10M, or $50M of OPEX — how do revenue and margin change? This is akin to saying, “Here’s some fertilizer; now grow me a beanstalk.”

To answer the first, you need to estimate baseline performance in the current year — a surprisingly hard question in the corporate world, thanks to how accounting is set up, frequent re-orgs, and one-time events (a ship stuck in Suez) that hit the business this year.

To get a better view of revenue and gross margin, understand two things:

1. Where does your category stand in both the macro and micro cycle? Is it in secular decline (macro), or flat but experiencing a small ebb this year?
2. What drove your margin improvement this year, and can it be replicated (usually not)? Your suppliers won’t always pass through efficiency.

Once you have a reasonable baseline, the better question is how to improve it next year:

1. How can I improve product-market fit?
2. Am I in the right sub-categories — which to supercharge, which to kill? (Within security software, focus on endpoint protection and exit identity management.)
3. Am I in the right market segments? (Enterprise vs SMB vs Public Sector)
4. How can I change my sub-category or market mix, and redirect sales and marketing spend accordingly?

For the second question, the business owner must come up with a genuine game-changer — an “initiative.” But too often what we see are “me too” products or ideas so far-fetched they belong in a sci-fi movie. Successful leaders test ideas like they’re auditioning for a talent show: iterate, gain traction, then wow management with their best act. Easier said than done — sometimes the testing runs multiple years, especially when shifting the business model (transactional to subscription) or entering a new category (hardware to software, or launching AirPods).

Key questions to answer:

1. What insights drove you to this idea? A mix of data-led insight and creative observation of real customers.
2. What have you tested with customers that’s building conviction?
3. What’s your “game” plan for this year? (Build prototypes, launch in a new city.)
4. What’s your “grand” plan for the years ahead? (Who doesn’t love a hockey stick.)
5. What support do you need from other teams? (Engineering, design, marketing.)

The Process Itself

Planning can feel like a last-minute assignment due tomorrow. You get 4–5 days’ notice for presentations that require groundbreaking thinking. Worse, you don’t understand the template and don’t know how to fill it (is a dependency a risk? what’s “major” about major milestones?).

The best way to prepare is to make this a year-round exercise instead of letting the schedule dictate your prep. Good leaders run brainstorming sessions and hackathons within their business groups at least once a quarter to solicit ideas. They also understand cross-functional needs — growing in a vertical like healthcare requires investment from marketing and sales.

Typical Outcomes

• The CEO realizes their growth plans are about as robust as wet tissue paper.
• The CFO concludes that cutting OPEX is like finding hidden treasure.
• The CRO hesitantly deploys quotas while worrying about attrition — like sending kids off to camp.
• Mid-management feels like they’ve been asked to build a rocket ship with no funding.

What Can Be Done Better

1. CFO should lead some form of zero-based budgeting for a decent picture of each segment’s P&L. The allocation methodology should be well laid out and revisited every couple of years.
2. Group president should keep the ideation pipeline brimming all year, not cram it into the final months. PMs and engineering surface ideas in quarterly reviews and prime the executive audience.
3. CRO should evaluate bandwidth to enter new markets. Sometimes it’s better to seat business development inside the business group to test and iterate than to throw seasoned salespeople at a new product.
4. CMO should engage far earlier in growth-plan definition, pressure-testing the offering against existing user insights.
5. Middle management should build networks across the company and treat cross-functional collaboration as a strength, not a time sink.
6. Everyone should look for efficiencies. Is there a cheaper way to do this?
7. And above all: sharing (information) is caring (for your company). Too often teams take a siloed approach.