A powerful way to develop your business strategy

“What are we going to be in 10 years?” It is one of the most challenging questions that any organisation can ask itself. It’s also one of the hardest.

You’ve heard plenty of simple, yet meaningless, platitudes in response. “We are forward-thinking” or “We’re going to be the biggest player in our sector”, but if organisations or companies really want to be successful in the years to come, their executives and boards need to put some real work into answering the question.

Of course, that’s easier said than done. With the constant drumbeat and pressures of quarterly reporting, fighting daily fires and meeting short-term targets, it is hard for executives to think beyond the here-and-now. Thinking five years ahead is a real challenge in that context; 10 years feels like an eternity.

One good place to start the discussion about the future is the boardroom. “Stargazing” is a fundamental role of the board. Developing strategy and taking the time to do blue sky thinking is one of the most valuable things a board can do.

Been there, staying there

There are a number of reasons why boards are well-suited to do this. For starters, most directors stay in their roles for at least nine years, and many stay much longer. Meanwhile, C-suite executives are subject to a much higher turnover. Having the board actively involved in long-term strategic planning, therefore, is smart. Directors are far more likely to be around to see ideas borne from stargazing come to fruition.

What’s more, inherent in the role of independent board directors is a certain distance from the organisation. Directors aren’t in the weeds day-to-day. We’re meant to look outside in. Asking hard questions about the here and now and about the future is one of the most important jobs of a board director.

We also are tasked with thinking about the business, without bias or having our judgement compromised by personal feelings. That objectivity is useful when it comes to thinking about where the business can (and needs to) be, because sometimes changing direction will mean changing the people in the business, or making a significant pivot in the way the business is run.

There’s another crucial reason boards should be very involved in stargazing. Because directors are involved in the business for a longer period of time, we are not as driven or incentivised by short-term targets as executives are. This gives directors a safe space to do some of the long-term thinking that is vital for the business.

Getting started

What, exactly, should boards be doing when they stargaze? One way to gauge what 10 years ahead really means is to think 10 years back to what existed — or more usefully, whatdidn’t exist then. Take technology, for instance: Facebook, founded in 2004, was just a twinkle Mark Zuckerberg’s eye. LinkedIn, founded in 2002, was in its infancy. Social media certainly wasn’t on any company’s radar screens. And, we’d just begun to recover from the dot-com bubble and crash.

So what did 10 years ago look like in your business? This question gives a much needed perspective on the speed of change and the manner of change in the business and in the factors that influence the business. Looking back in this way makes 10 years a more concrete span of time.

It also helps to frame thinking around some key questions — rather than around targets. Is our sector growing or shrinking? Will we run out of growth areas if we stay on our current strategic path? Do we have to think about moving into an entirely new area or sector? What political, economic, and social forces could impact our business, our sector and the world? Once you start, the questions will keep coming.

Where does that lead? The decisions you make about that long-term direction of the business will impact the choices you make and force discussions about whether you have the right people, processes, and infrastructure to get from where you are today to where you want to be. Do you have the right people in the organisation to drive change? How can you shape the culture and the ecosystem of partnerships and relationships in a way that facilitates necessary change? Most importantly, are you investing (both money and effort) in the right places today to make sure that you will have strong outcomes in 10 years?

The great thing is that thinking about the strategy and developing a concrete plan around it also gives some measurable steps that an executive team can own and implement, turning something notional into something concrete and measurable.

There is, of course, one other question that boards need to ask themselves — and it’s the hardest one for this group: Do we have the right people sitting around the board room table to get us to where we need to be, or do we need to make some changes to ourselves?

As in life, the nature of business is about the right balance of change and continuity. No sector is standing still and no business can rest on its laurels and think it has done all that it needs to do.

The thing that differentiates businesses that last from those that don’t is the ability to embrace the challenge of change.

Published in collaboration with LinkedIn. This post also appeared in the BBC Capital Column, Above Board with Lucy Marcus.

Author: Lucy P. Marcus, founder and CEO of Marcus Venture Consulting, Ltd., is Professor of Leadership and Governance at IE Business School, a non-executive board director of Atlantia SpA, non-executive chair of the Mobius Life Sciences Fund, and non-executive director of BioCity.

Image: A Businessman is silhouetted as he stands under the Arche de la Defense, in the financial district west of Paris, November 20, 2012. REUTERS/Christian Hartmann.