What can we cover in our long-range marketing plan?

Question:  Last July, our CEO brought in a new strategic planning consultant.  He said his first workshop question for us was: “What business are you in?”  According to this consultant, addressing this question up front has two advantages.  First, it prevents us from falling into the trap of “marketing myopia” where we may be locking ourselves in a dying industry.  Secondly, it requires us to do long-range planning.

When we asked what he meant by long-range, our consultant said: “10 to 20 years.  So prepare two long-range plans.  One is a 10-year marketing plan and the other, a 20-year plan.”  We requested for “guidelines.”  All he said was:  “This is a workshop.  So do the workshop assignment first.  For practice, formulate a 10-year plan for our major brand.  Then, while we’re going over what you’ve done, we will discuss and find out what you did right and what you did wrong.  For what you did right, we insight into why they were right.  For what you did wrong, we understand how you can make them right.”

I hope you’ll understand why we cannot identify our company or even our industry.  We will appreciate having your diagnosis and tips using generic terms.

Our company library has two books on short- and long-range planning.

But after reading them, we still can’t answer our questions about what to cover, and most of all, where to start.  Please help.

Answer: I will make an exception in your case about identifying at least your industry.  I want to respect your sense of privacy especially when your question and its context are as intriguing.

I’m surprised though that your library has only two books on long-range planning.  There’s so much more and they often contradict each other.

Your second question on where to start is the better starting point.  So begin with your categories of the “future.”  There can’t be just one kind of tomorrow.

In fact, the major reason why those books seem to be contradicting each other is that they’re talking about different kinds of futurity.

Understand each category and you’ll also understand what to cover.

There are three different kinds of visibility of the future:  (1) the almost zero visibility, (2) the almost 20/20 visibility, and (3) the about 50 percent visibility.  The most fascinating and challenging for long-range planning is the first category.  It’s the futurity from where we can learn the most.   So we will focus on it.

Even for a 10-year long-range plan, if what the market and the product and services of your business would be like are near zero visibility, you cannot predict.  It’s unpredictable because that future is what is known as “highly improbable.”

The highly improbable future is what New York University Professor Nassim Taleb wrote about in his 2007 best-selling book, The Black Swan: the Impact of the Highly Improbable.

If there’s one lesson useful in long-range planning that you can learn from Professor Taleb, it’s this.  The highly improbable future is unpredictable.  If you cannot predict, then don’t.

Instead, distinguish between a positive improbable where you will get what you want, and a negative improbable where you will suffer the negative consequences of the improbable taking place.

Then see how you can prepare for a positive improbable or a negative improbable.

But by all means, stop spending time and money predicting.

Let’s talk specific.  What is a positive improbable?   It’s what Arnel Pineda was dreaming about. It’s about a future when he would be an international singer and songwriter.  He knew there was no way he could correctly predict that happening or when it could take place.  So how did he prepare?

Basically, Arnel simply multiplied and maximized his exposure to the highly improbable happening.  At the age of 15, he succeeded in becoming the lead singer of the Ijos Band and sang at Shakey’s Taft Avenue restaurant.  Then he joined another rock band and participated in a Rock Wars contest, which he won.

He kept on repeating this “exposure combination” including writing, arranging and recording movie theme songs that won for him more and more awards.  That was from 2001 to 2005.  Then in 2006, Arnel had a new band where he performed cover songs by the Journey.  He posted his Journey song versions on YouTube.  On June 28, 2007, Neil Schon of Journey saw Arnel’s renditions of those Journey songs, contacted Arnel, auditioned him on Aug. 12 and Dec. 5 announced Arnel as Journey’s lead singer.  The positive highly improbable happened.

Whenever I give this example, both my clients and students say that the highly improbable happened because of luck.  It was serendipity.  But that serendipity and luck could not have happened if Arnel did not persist in multiplying and maximizing his exposures to the highly improbable taking place.  It’s the inventor Louie Pasteur who said: “Chance favors the prepared.”

What about the negative highly improbable future?  How do you prepare your long-range planning of 10 years for a highly improbable disastrous event like the Mount Pinatubo eruption?

We say it again, for a highly probable future, avoid preparing by predicting.  Instead, prepare by anticipating the negative consequences of the negative highly improbable and then set up the means for minimizing the damages from those negative consequences.

In the case of Mount Pinatubo, we now have the record of those negative consequences.  That volcano was quiet for 600 years until it erupted on June 15, 1996, setting a record as the world’s second-largest volcanic eruption of the 20th century.  The eruption generated a high-speed avalanche of hot ash and gas, huge mudflow, and a cloud of polemic ash traveling hundreds of miles across.  More than 800 people died and over 100,000 families were rendered homeless during the nine hours of eruption.  The lessons for minimizing those adverse negatives have been learned and now form the basis for the government’s disaster preparedness drills and programs.

Long-range planning for a highly improbable future is not about prediction or forecasting.  It’s about preparation.  For a positive improbable, maximize the likelihood of the positive improbable as occurring.  For a negative improbable, plan for minimizing the adverse consequences of the negative improbable. Keep your questions coming.  Send them to me at [email protected].