So, Peloton's CEO and founder, John Foley, is resigning. After the connected fitness bike's stock plummeted last week amidst declining sales, the company announced that it was cutting 20 percent of its workforce. Apparently, once-housebound exercisers are returning to the gym.
Peloton's sudden reversal of fortune calls to mind a new axiom that's taken hold during the Covid Crisis. It goes something like this: "In today's business environment you can't even predict next week. Why bother with next quarter or next year?" Strategic planning is said to have become a fool's errand, a worthless exercise.
But I beg to differ. Having spent the past 30 years delving into the faulty assumptions and failed new directions of disrupted firms (Blockbuster, Kodak, Nokia, Blackberry, Sears, etc.) and contrasting them with the best practices of organizations and entire industries in the "Innovation Vanguard," I must push back on the notion that flying blind is made necessary by the rapid rate of social, economic, environmental, and consumer change.
I'll be the first to acknowledge that the coronavirus has repeatedly offered jaw-dropping twists and turns. Even the most sophisticated models failed to tell us what would happen next, and the experts often ended up with egg on their faces.
But to dismiss the necessity of planning would be a big mistake. I still believe Dwight Eisenhower had it right when he said, "Plans are worthless. But planning is everything."
In the Age of Acceleration, planning may not be everything, but it beats the alternatives. Instead of chucking our strategic planning processes, we need to reinvent the art and science of looking, thinking and acting ahead of the curve. For too long, strategic planning has been practiced as a rote annual exercise. It was perfunctory, superficial, linear, and anything but strategic. In essence, it consisted of dusting off last year's PowerPoint deck and changing the date.
Fortunately, new approaches to planning are emerging. These organizations are practicing what I call foresight-based planning. And they are linking planning with innovation in a collaborative way.
One such practitioner is Wisconsin-based Trek Bicycles. Trek created a forecasting unit to track emerging trends and serve multiple business units with data and insights and thought leadership. When Covid struck, in Q1 2020, Trek rolled out its recession playbook and began to hunker down and cut costs just like its competitors did. But because Trek's product managers are steeped in the latest forecasting methods and software, they continued to pour over the data. In talking with dealers and conducting ongoing market research, they soon spotted a countertrend.
Six weeks into Covid and sales were showing a slight uptick in product sales. What was going on?
Consumers that hadn't ridden their bikes in years were realizing it was a safe form of exercise and were repairing their old bikes. Trek was soon ringing up sales not only of bikes, but of ancillary products like helmets, seats, and tires. Because Trek's hard-charging CEO John Burke and his key lieutenants are avid trend-trackers, they were willing to challenge preconceived notions about what a pandemic might do to consumer behavior. Thus, they were able to see the coming boom and place bigger orders with key suppliers like Shimano and Bosch well ahead of their competition. Meanwhile, Trek's forecasting unit was encouraging product managers to think out farther into the future, they were able to see that e-bikes would reach a tipping point, and the pandemic hastened that moment. Result: Trek speeded up production to match surging demand and is enjoying record sales.
To consider how your strategic planning process is serving you, assemble your top strategic thinkers and pose key questions:
- How well have we dealt with strategic planning during Covid, and what has it revealed about the effectiveness of our process?
- What new models of strategic planning out there might help us reinvent our own?
- What are the most important workplace, demographic, consumer, technological and social trends that we need greater insight into going forward?
- How are our strategic foresight efforts linked to our innovation roadmap, and how do we create greater linkage?
My ongoing study of the plight of disrupted firms reveals that most often the root cause of their demise was a failure to react and respond to rapid change. Does your existing process prepare you to seize the opportunities that change brings?
The post Strategic Planning is Dead. Foresight-Based Innovation is What’s Next appeared first on Innovation Resource.