Francis Wade | The five-year plan that killed a 50-y-o company: An AI supplier case study

Your company is doing much right. Your executives, however, are uneasy about the future and what might be waiting over the horizon. These fears are genuine, but do they warrant a hearing?

Consider a Kingston-based business. They handled every aspect correctly. A charismatic, intelligent founder. The consistent production of five-year plans. Nearly half a century of accumulated value. Then the ‘Big Man’ dies at 89, in year four of the final plan, before work on a new strategy has even begun.

As he passes, so too does every piece of foundational knowledge on which the company has been running. With no succession plan and no corporate strategy, what happened next was unpleasant. Yet, it was entirely preventable.

At the same time, this is not a tale about talent. Instead, it is about asking a different set of questions in planning meetings held many years ago.

What are those questions? Who should ask them? The answers lie in why the most strategically indispensable company in the European Union treats the year 2039 as if it were urgent. Our inquiry will reveal why your current five-year plan, the one your board is so proud of, may be the most dangerous document in the building.

The danger

To continue our story, a new acting CEO was hurriedly appointed. Within a month of the funeral, a competitor came calling, making a surprise offer to buy the company: for 10 cents on the dollar.

With no vision of its own, no mandate beyond the current cycle, and no reason to fight, the leadership team surrendered. Half a century of accumulated equity evaporated.

But was the board to blame? Or the executives? Neither was incompetent nor disloyal. They had simply never been asked, in any planning exercise, to take ownership of the company’s future beyond year five.

The distant future had always been entrusted to the founder’s instincts, convictions and ambitions. When he left, it left with him. Now, consider the opposite.

The innovation

ASML is the most valuable technology company in Europe. Every advanced semiconductor chip on Earth depends on its machines.

The firm inverts common practice by starting in the future and working backwards. Concretely, their planning begins in 2039, with a specific “technical target” that today’s customers will need.

This is not abstract philosophy. Each September, ASML’s supervisory board and management team convene for a multi-day offsite built around one question: “Given our destination, what must we start doing now?”

But observe what makes ASML’s approach truly foreign to most boardrooms. The company does not act as a lone ranger.

For them, strategic planning is no secret ritual involving closed doors, hidden activities and a final announcement. They erase that boundary. Here is how.

Intel, Samsung and TSMC are their largest customers. Remarkably, ASML continuously consults them to co-design future machines around the chips those customers will need ... years ahead of time. Foresight is practised as a shared obligation, not a solo act.

This is the detail that should be unsettling. In our local story, the future lay hidden away in one 89-year-old’s head. At ASML, it is shared across companies, continents and decades.

Your challenge

So what stops you from doing the same?

Perhaps, as a top executive, you have raised a multi-decade question in the boardroom, only to watch as eyes glazed over. Your problem was not theirs.

The excuses are familiar:

. “By the time this matters, I’ll be gone.”

. “I’m exhausted just keeping my head above water.”

. “Looking past five years is a waste of time.”

. “I’m not paid to contemplate all that.”

But these are not said with malice or frustration. They are simply the utterances of people who have never been given a reason, method, or mandate to think any other way.

A case in point: consider the difficulty many civil servants have in thinking beyond the time boundaries of Vision 2030 Jamaica. Although the plan was long-term back in 2009, today they are trapped in its short-term leftovers.

Private sector Jamaicans often talk about getting better people into government positions. But this would be a misdiagnosis. Just like the executives in the local company that died, there is no reason given to think long-term in planning meetings.

Consider this: ASML’s success is not a product of talent, resources, or choice of industry. Instead, it is the structures they use for long-term deliberation, the exercises, the prompts, and the time horizon inherent in every discussion.

Change the design of a planning process, and you transform what the process is capable of producing. Your organisation can do the same, but only if your next planning meeting is designed to demand it.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send an email to columns@fwconsulting.com.