You’ve likely spent time and effort defining your company’s long-term strategy, but what’s your time horizon when you think about the long term? Maybe three to five years? I would call that a medium term focus.
Yvon Chouinard, the founder and owner of Patagonia, was experiencing very fast revenue growth. The company had the opportunity to expand into multiple worldwide retail chains. It would have launched the business on a major growth spurt. Instead, Chouniard and his team stepped back and said, “Whoa - let’s take a look at who we are and what we want to accomplish in this world as a company - over the very long term.”
Chouinard wrote a piece called The Next 100 Years, which outlines the purpose of the company, their values in the world, and their focus on high quality, outdoor products. He even advocated teaching people to buy only what they need - and to buy no more. The result for Patagonia has been a steady growth in profits, as well as a deepening and broadening of core capabilities that drive the company toward long term abundance.
Some of you may be chuckling right now with the idea of thinking about 100 years out. Others feel pure panic: one CEO I spoke with this morning in the technology space said, “I’m living in an environment of fear, uncertainty, and doubt. The world around us is changing so fast, we have to figure out what we will do and how we will do it to stay out in front of our marketplace.” Does this CEO have time to think about the next 100 years? As a matter of fact, yes. The next 100 years is really a metaphor of what capabilities a company will need to build to adapt to an environment of uncertainty and fast paced change. If you wait until the crisis hits, it’s too late.
“The next 100 years” as a metaphor asks the question, “Who do you want to be and what kind of system do you have to build to make it work?” For some of you, this exercise is irrelevant because you want to build and sell quickly. You are a flipper. However, if you want to build a long term legacy and know you left a company not only with healthy profits and healthy long term advantage, the exercise is vital.
This work is anchored in questions like:
- Why do we exist?
- What do we want to create?
- What kind of talent must we attract, retain, and motivate?
- How do we create a system that is not dependent on one “big brain” but on the ability of the culture to adapt and change quickly to new circumstances?
- How do we build a company that will be distinct and remembered not only by our employees and our customers - but by our community and our culture?
- These questions are foundational for “The Next 100 Years,” and force senior teams to step back and reflect on the foundation they are building for the future.
All of this requires extreme focus and time to think -- the “walk in the woods.” Executives who make time for it know the long-term pay-off.
So what companies have clearly done this work? And what principles should a good long-term vision have? I’ll take a look at these questions in my next post.
In the meantime, I would love to hear your thoughts on this topic!