Five-year plans are fruitless

Round about this time of the year, thousands of brow-beaten managers in hundreds of fuddy-duddy firms will be labouring away at five-year plans. Tossing around political, economic and social predictions along with any other sort of scenario on which they can lay their desperate hands.

They will become obsessed. Eating, sleeping, drinking five-year plans and crying out "Bush! "Zuma!" or "Mboweni!" instead of the names of girlfriends past, as they make love to their wives.

They will take to curling up in foetal positions and whimpering every time a taxi backfires.

Then the great plans will be presented to boards and with a bit of luck some fortunate fellow might even get a pat on the back from a director who still resolutely believes that five-year plans are essential to continued corporate survival.

After which the magnum opus will be stashed away in a filing cabinet never to be seen again.

Because, deep down, everyone knows that by teatime on the day it is finished, the plan will have already diminished in accuracy by ten percent. And then, by at least half of that after only a week and should any young bright spark haul it out of the archives in five years' time, it will be found to be five percent accurate at best.

When I used to do tghse at BMW SA, after my third frustrating year at it, I asked one of my staff to pull out the five-year plan from four years before that and we were staggered to discover that less than five percent of the predictions were even vaguely accurate.

In corporate terms, five-year plans are a monumental waste of time. From a marketing perspective they are downright dangerous.

Indeed, good marketers might well set goals, but they should avoid absolutes such as plans like the plague. They should think ahead and allow for every conceivable eventuality but they don't make plans.

Because the very essence of good marketing is flexibility. An understanding that mammoth global events like September 11 can radically change the way business is done. How US soldiers shooting up a car full of Iraqi women and children can impact on brand loyalty on the other side of the globe.

And the problem with plans is that they end up cast in concrete. Or even worse, the plan becomes the policy. And nothing, of course, is more inflexible or inhibiting to quick decision-making than a good old, dyed-in-the-wool. Frankly, I've come to conclusion that one of the most important business strategies any company can employ is to have a long, hard, honest look at themselves and to see how many of all those chores, functions, traditions and other massively important things that employees diligently undertake day after day, week after week and month after month, contribute anything other than a row of beans to productivity, profitability or anything else.

I'm now convinced that ongoing market research that delivers facts, not future fantasies, upon which businesses can react and adapt on the hoof, so to speak, is a far better investment than trying to second guess politics, the economy and what makes society tick in five weeks let alone five years' time.

Having lived through the trauma myself, I can, with my hand on my heart, attest to the fact that that a five-year plan can be used effectively for one thing only. And even then one has to remember to remove the staples to avoid scratching yourself where it hurts most.