Expert Q&A: Creating the Right Strategic Balance

April 10, 2008 By Mary White

Expert advice for American Small Business News Readers from Dr. J. Robert Beyster, founder of Science Applications International Corporation (SAIC) and author of the book The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company (John Wiley & Sons, 2007).

Question:

I have long heard that creating long-range plans is an essential ingredient for the success of any business. However, I don’t know how I’m supposed to plan two or three years into the future when I don’t even know where our markets are headed over the next few months. Is long-range planning essential to the success of my business?

Answer:

American businesses went through a period back in the 1980s where long-range, “strategic” planning was considered essential. Everyone was writing five-year plans, and usually filing them away—never to be seen again. You’re right: with the speed of business today ratcheted up to such a hectic pace, making plans too far into the future is potentially a big waste of time and money. According to Eric Schmidt, CEO of Google, his company’s plans intentionally look ahead no farther than four or five months at most. So, for many businesses today, long-range planning is falling out of favor.

Dr. Beyster believes it is important to balance short-term, operational planning with a longer-term outlook. SAIC did not rely on a strategic plan, instead, it created a strategic planning committee that worked to achieve the following long-term goals:

• Provide a forum for addressing strategic issues on a regular basis.
• Develop concepts of what the company is now and how it should develop.
• Define basic markets and types of businesses in which the company intends to operate for the long term.
• Develop general objectives and plans for the company in each major market and business line.
• Draw up a statement of SAIC’s broad operating principles, objectives, and strategy.
• Develop more specific objectives and strategy in the following areas:
o Growth and business mix
o Capital structure
o Organizational structure
o Investment of discretionary resources
o Acquisitions and divestitures
o Key personnel acquisition and retention

For further information, you can contact Dr. Beyster at www.beyster.com

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