“Management is all about managing for the short term whilst planning for the long term” (Jack Welch). Transforming a company from analogue to digital is a major undertaking, often a decade-long task. Management teams are typically focused and incentivised on shorter-term objectives, creating barriers to a digital future. This is the 10th and final post in a series building on 10 reasons why digital transformations are difficult. Here are some approaches that firms are taking to keep a focus on the long-term:
- Engage the board. The board should provide a long-term perspective that endures beyond that of the management team.
- Extend the planning horizon. Many firms plan 2-3 years ahead (although there are exceptions in sectors that require long-term investments). Even if incentive systems can’t be changed, extending the planning horizon (e.g., to 10 years) creates the right focus on the long term.
- Sequence carefully. You can’t deliver everything in parallel. Start with stuff that really delivers to the bottom line (or stops the bleeding), but at the same time ensure there is a long-term roadmap that delivers a complete digital end-state.
- Go public. Sharing the long term vision externally takes strong conviction. But it’s a powerful way of committing the whole organisation to a shared objective.
In summary, management teams need to keep a dual focus on long-term vision and short-term execution. This has always been true but matters more in the digital world, where change is happening far faster.