I recently posted a question on LinkedIn, asking whether organizations are still doing long range planning to guide their work. The answers were insightful, suggesting marketers aren’t thinking beyond the next 18 months and the concept of a long range plan (LRP) isn’t particularly useful to them.
The range of responses suggested there’s confusion between business planning and marketing planning. Some thought I was talking about increasing media spend awareness, customer acquisition, loyalty, etc. What I meant was: “Do we as a business have a plan for investing in and improving our functional excellence – the strategies and resulting people, tooling, tech and plans – to succeed and grow in the face of a lot of change that’s coming at us”.
Obviously, this is a small group on a social media platform, so it doesn’t qualify as research in any way. But, I asked the question in the first place because I’m seeing a repeating pattern as I talk to colleagues and clients in mid-sized and large orgs: There is no long range plan (i.e. a multi-year commitment) to elevate their digital capabilities. And, the lack of the long-range investment plan is creating a gap: Just about every leader knows they’re falling behind where they should be, despite their best efforts. They are struggling to balance the important work of capability building (i.e. new techniques, new tools, new skills, new tech, new partners) with the urgent work of delivering results this quarter.
I don’t believe this is a “execution” issue. These are high performing leaders in well established organizations. They can organize the work and get the teams in place to execute. Conversely, I don’t think this is a “vision” problem, per se. These leaders and the execs in all these orgs know they have to accelerate their digital transformations and they are all pursuing opportunities vs. playing defense.
This is a financial planning issue. The gap seems to be the space in between annual planning (i.e. the plan for next year) and getting to the five year horizon. It’s the plans for years 2-4 that are getting forgotten.
The root problem is with the way companies generate budgets. Worst case: Companies are basing marketing budgets based on their previous year’s budget, driven by short term results (like an annual ROI) when they should be looking at “reinventing our marketing capability” as a strategic initiative.
These are the kinds of budgeting issues that should get modeled out based on a LRP. The functional teams forecast future admin and capital investments based on where they want the functional capabilities to be in 3-5 years. So, the job of the LRP is to get finance and senior leaders to “buy in” and commit to elevating the key spend buckets in a marketing budget: operating dollars (money to actually make content, promote it with ads, annual IT/tech spend, promos, agency spend, production etc.), admin (your team, talent, training, etc.) and capital spend (long term tech and hardware investments).
Some may think Marketing doesn’t need it’s own LRP, that there isn’t a real problem for an LRP to solve. The CEO could look at some numbers and make the case there’s plenty of money sloshing around in the marketing budgets. Isn’t marketing already getting transformed? Isn’t everybody spending more on digital media?
And, investing in marketing tech?
(https://welcomesoftware.com/insights/top-martech-trends-2021/)
The challenge is that increases in media spending AND investments in new IT tools are just the start: There’s a need for talent, skills, and culture change. And the other challenge, whether investing in technology or new staff, is to stay aligned with the functional leaders to make sure the investments are being prioritized based on strategic need vs. IRR or short term ROI. The LRP should guide these investments (beyond media) over the course of time.
If you’re a marketing leader of a department that’s spending more than $500K a year or employs more than 10 people, you should definitely be working off a long range plan for evolving your marketing capability and team. More importantly, as a marketing leader in 2021, probably ⅓ of your job is to generate buy-in to your vision for where marketing is going in the next few years. That means your job is to guide the senior leadership of your org – including finance, HR, talent, and sales – to understand just how much shifts in the marketing landscape will drive other business strategies going forward and, thus, the need to make a 3-5 year commitment to rebuild the marketing capability.
The “what” and “how” of long range planning will be a little different for every organization, but every marketing leader should be advocating for a trajectory of spend on key initiatives beyond the current fiscal year planning and a LRP is the tool to generate the commitment to a spend that accelerates and grows in years 2-5.
