At a recent NEDs dinner, I asked what timeframe they thought long term planning should encompass. Immediate responses were about the typical three-to-five-year business planning horizon, which led to a broader discussion of how to reconcile the cycle of business planning with running a successful inter-generational business. After all, societies are proud of their histories and boards often talk of their societies looking after their members in another 50, 100 or 150 years’ time.
I lose count as to whether we are in the fourth or fifth industrial revolution. Whichever, the pace of change continues to increase, and with it the challenge of long-term planning. Three to five years seems like an age. When my son left primary school, his headmaster said one of the most profound things that I have heard for a long time – that the school had been trying to prepare our young children for a world that the teachers could not conceive of. Exactly what we are faced with in trying to build inter-generational businesses today.
So what do we do?
Perhaps it is time to revisit the corporate vision - as a serious attempt to express what we want our organisations, individually and collectively, to look like many years ahead. What constant golden threads should run through everything we do, no matter what the technological advances, societal changes, or the nature of the homes we live in?
The BSA tackled this in 2014 with two questions: “what do we want the UK’s financial services sector to look like in twenty years’ time?” and “what are the things we need to do now to have the best chance of achieving that version of the future?”
The lengthy timeframe caused much debate at the time, and, to be honest there was not much science to it. A twenty-year horizon sought to go beyond one or two parliamentary sessions, whilst not going so far into the future that the timescale ceased to have any meaning.
What has happened as a result has been really interesting…
… In developing the BSA’s forward looking themes we have started thinking much longer term. Our work on lending to older borrowers, for example, aims to address one of the biggest societal issues the UK is likely to face in the second half of the 21st century – with inadequate pensions, a state struggling to support its ageing population and changing older borrower needs and demand all coming to a head.
What about individual building societies and credit unions?
Two things immediately come to mind as ‘constants’ that to characterise our businesses over the very long term – our values as member-owned organisations founded from a strong social purpose; and our emphasis on personal service.
Key to our future success is how we redefine those in an age of technological revolution. How do we make the digital experience distinctively member-focused? How do we create that sense of membership and belonging in an intermediated and dis-intermediated world? How do we express our social purpose in the modern age? How integrated is that purpose with our core business? As BSA Chairman Dick Jenkins says, how do we continue to “provide a safe home for your savings and savings for your home?”
Thinking about the long term future is time well spent. Whether based on a statement or a question, I have found having an active approach to creating the future we want helps our daily business decision making. It helps with the judgements about what we should be taking on and doing, and what we should be side-stepping or ending.