Why the 5 Year Plan is Dead

— May 25, 2017

One of the most commonly asked questions during a job interview is “where do you see yourself in five years?” Understandably the interviewer is assessing the depth of the candidate’s ability to plan ahead and how well thought out their future is. Makes sense. However, in a world that’s rapidly changing, when job descriptions, competencies and skills are continuously evolving and altering is a five-year plan really relevant? Does it truly hold meaning when in five years there’s a high probability that the job scope would have expanded or the skills needed today hold lesser importance?


It’s not just individuals that are asking themselves whether or not a five-year plan holds any meaning. In fact, the same applies to companies who for decades have held such plans as their hallmark.


Five-year plans were the strategic core of a company. They outline the long-term vision and goals of companies and chalk out their game plan. They generally encompass input from all functions such as HR, supply chain, operations, sales and put together a plan that’s comprehensive, strategic and visionary. But is it really visionary?


The Five Year Plan Problem


The fundamental problem with a five-year plan is its rigidness which is now making it counterproductive. Companies are accelerating faster than what a five-year plan can possibly capture and sticking to the plan could very easily be suicide for them. In the exponential age where there are so many disruptive forces that keep arising on a monthly (and even weekly basis) that companies have to constantly stay on their toes, be agile and nimble and continuously evolve so that they’re able to withstand the competition.


Another pressing problem with a five-year plan is its secrecy. Being a document that’s so sacred and guarded by a company – to ensure competitors don’t even hear a passing whisper about it – it fails to include a company’s key allies in its design – i.e. its suppliers and customers. This makes the plan much of a drag on operations and takes away from its ability to truly represent what the market and industry foresee the future to be like.


In his book, Rise and Fall of Strategic Planning, Henry Mintzberg has highlighted many weaknesses of the five-year plan and carefully exploited why it’s an obsolete instrument. To put it simply, a five-year plan holds practically no strategic importance to an exponential organization. You could even say it’s a plan for eventual death for rapidly growing companies. Such plans can only send a company in the wrong direction chasing a goal that’s passed its usefulness, or can send them in the right direction, however, running after an inaccurate representation of the future. In both cases, the organization is headed towards its doom.


What Companies Should Do Instead


What’s clear now is that five-year plans are truly a waste of time for more strategic departments and business leaders. Those hours and days long debates, meetings and forecasts really don’t produce a plan that can propel an organization’s growth.


Looking beyond the obsolete five-year plan, companies should establish a bigger vision by defining their Massively Transformative Purpose, setup an organizational structure that facilitates their exponential thinking and growth and establish a one-year plan. This “short” term plan is the most forward they’ll truly be able to see, realistically aim for and possibly achieve. Sure the one-year plan will need to be monitored, assessed for success and corrected along its way, but its far easier to do all that for a shorter plan than, say, a five-year plan.


What we can expect to see more of, instead of the five-year plan, are:



  • Well crafted MTPs that define the overall direction and DNA of organizations.
  • Dashboards that’ll assist business leaders in making real-time adjustments in their strategies through the information they monitor.
  • More meaningful and impactful meetings that’ll be based on quick decision-making.
  • One year plans that’ll be linked to the dashboard

In today’s exponential era successful companies will be known by their purpose and ability to rapidly execute plans, rather than their abilities in formulating plans and strategies. Developing a one year plan and abolishing the five-year plan isn’t going to be easy because it’ll require much more business intelligence, depth and wider need for information but those companies that are able to do this will be the ones that’ll enjoy remarkable and exponential growth. The key is to constantly be attentive to the environment you’re operating in and making real-time adjustments to your plans.

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Author: Paul Keijzer


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