We live in a world of rapidly changing economic and business environments. To survive in such a highly competitive market economy, you need to think strategically and tactically. That’s where setting goals comes in.
However, you can’t make goals and objectives without a plan. Planning is essential to achieving short-term, medium-term, and long-term goals. It enables you to measure performance or progress in the workplace or in your life. So you know where you’re falling short.
The problem is that while most of us can make good plans, we never get to execute them for various reasons. In this post, we discuss the difference between short-term planning and long-term planning. We also talk about the relationship between the two and how to make long-term planning help you realize your full potential.
The Difference Between Short-Term and Long-Term Planning
What Is Short-Term Planning?
Short-term planning involves strategies that focus on the results within a short time, say a year. These are the strategies to be used in achieving specific milestones. Short-term planning aims for an immediate period and helps you fix the challenges you’re dealing with in the present.
Short-term goals facilitate long-term achievement. If not effectively planned and executed, it becomes much harder to attain long-term goals. So, whatever your short-term goals, make sure they align with your long-term vision.
One short-term plan example is saying to yourself, “I’d like to lose 30kgs in six months.” You can further break it down to losing five kgs every month. Another short-term plan example is to raise turnover by 10 percent and profit by 12 percent by the end of the financial year.
What Is Medium-Term Planning?
Medium-term planning entails strategies that focus on permanent solutions to short-term concerns. It’s the implementation of policies and procedures to ensure short-term problems do not recur.
In a business context, employee skills and attitudes or product complaints are short-term problems. Initiating employee training and development courses and revising the company’s quality control program may be medium-term solutions.
Another medium-term goal example is to invest in a service contract instead of repairing a piece of broken equipment every time it does. You want a solution that will prevent the machine failure from affecting the company’s productivity.
Medium-term planning may cover a period of up to three years. It’s long enough to be meaningful for your long-term objectives and vision, yet short enough for you to project the targeted result.
Here’s another example. You could be planning to open a new branch in another city or introduce a new product to the market. In two or three years, you’ll be able to assess your current situation and determine whether you’re achieving success. You can then decide if the strategy is working or you need to change it.
What Is Long-Term Planning?
Long-term planning, as the name suggests, means setting goals that will take a longer time to come to fruition. These goals might take between four to five years to be met. The timeframe will vary from one business and individual to another, as well as the type of goal.
Long-term planning is strategic since it shapes the overall direction of the company or your career and personal goals. It involves formulating and implementing strategies that will insulate a business from the upheavals that periodically come up.
Long-term goals can tie closely in with personal goals and work-life balance. A good example is planning to become a millionaire before turning 40 or visiting all the continents within five years.
Planning anything for more than ten years in advance can be tricky. That’s why you should be prepared to continually adapt and adjust your short-term, medium-term, and long-term goals to take account of changing circumstances.
Long-Term Planning Vs. Short-Term Planning: The Key Differences
Generally, short-term planning is conducted for current and immediate concerns. The outcomes are usually expected within a year. The main focus of short-term planning is on the prevailing situation, whether in your career, personal, or business goals.
Long-term planning, on the other hand, takes longer to achieve and is based on how effectively short-term goals are accomplished. For example, let’s say you want to open multiple branches within and outside the state.
You will first need to lay a solid foundation that will attract and maintain new clients. To do so, you must research the area, study the competition, and hire consultants to help pinpoint potential customer buying trends.
As you can see, it takes several short-term plans to reach your long-term goal of running several successful retail chains.
Short-term goals are flexible and straightforward. They act as stepping stones that contribute to achieving long-term vision and goals. Short-term goals can be adjusted daily, weekly, or monthly to ensure they work efficiently to fulfill your objectives.
Meanwhile, long-term planning is complex and tactical. It has elaborate steps that not only focus on future success but also how to get there. That’s why you should formulate short-term goals that naturally lead to your long-term goals.
In other words, you need to be flexible, realistic, and reasonable when setting goals. Circumstances change, but most importantly, you change and grow. The goals should align with your career and personal plans, as well as commitments.
Short-term planning pertains mostly to internal issues, like aging and new hires, organizational structure, the relationship between your staff and stakeholders or customers, etc. Long-term planning focuses on external and internal issues, such as the loss of a key supplier or competition pressure.
Long-term planning must consider external factors in which the business operates. These are legal, social, political, economic, cultural, and legal issues that might affect your efforts to achieve your vision.
Important tip: Every step or action you take affects the outcome. Therefore, make sure your short-, medium-, and long-term goals are interlinked and aligned toward your success.
What’s the Relationship Between Short-Term Planning and Long-Term Planning?
Planning ahead is critical – plain and simple.
Planning is the most crucial process for a business or individual with career aspirations. Basically, the short-term plans are what drive sustainable solutions, as well as steer decisions in the right direction.
The truth is, you can’t separate short-term goals from long-term goals. What you need is a way to blend short-term and long-term plans to achieve your career, business, or personal objectives.
The mission and vision start by having a longer-term target. You then break the long-term goals into a series of short- and medium-term goals as milestones along the way toward the final result.
What’s the Difference Between Strategic Planning and Long-Term Planning?
It shouldn’t come as a surprise that 90 percent of businesses that start without a strategic plan are doomed to fail.
According to research published in the Harvard Business Review, 85 percent of executive leadership teams spend less than an hour every month discussing strategy and 50 percent no time at all. The study also shows that, on average, 95 percent of the workforce doesn’t understand its organization’s strategy. The rate of success in such an organization is close to zero.
However, you may be wondering, “Isn’t strategic planning the same as long-term planning?” Well, not quite.
Strategic planning is a structured process that involves creating specific business strategies, implementing them, and evaluating the outcome.
It is broader and determines what strategic objectives and initiatives you should put effort into achieving your vision and goals. Strategic planning can be performed in three fundamental steps:
- Implementation and execution
While long-term planning defines the actions needed to achieve specific goals, strategic planning makes those goals more realistic. From a business perspective, it enables employees to better understand the relationship between their performance, projected outcome, and the potential rewards.
In turn, this fosters better commitment that leads both employees and managers to become more innovative and creative. Consequently, company and individual success become easily attainable.
4 Key Steps to Creating Long-Term Goals
Step 1: Clearly Define Your Vision
The obvious place to start is knowing where it is you want to end up:
- Is it to increase ROI by 10-15 percent?
- Is it to increase sales by five percent?
- Is it to open multiple stores by 2025?
- Is it to create five million dollars worth of assets before handing over the business by 2030?
The best approach is to write down all your organizational, personal, or professional goals and aspirations for the next ten years. It doesn’t matter how far-fetched or impossible the objectives are at this moment. You’re simply setting up the stage, and once you have it figured out, you can now start to narrow it down by setting S.M.A.R.T goals.
If it’s a business, develop a statement of your vision and make it publicly available to your staff and customers. This is the most critical step in creating a long-term plan. Therefore, it needs to be well thought out and formulated.
Remember, make goals, not wishes. Dreaming of winning the lottery is a wish, not a goal. Wanting to make five million dollars within ten years is a goal, not a wish.
Step 2: Determine the S.M.A.R.T Goals
Now that you’ve painted a clear picture of where you’re headed, the next step is to set goals. Your objectives become much easier to accomplish when they are S.M.A.R.T. Here’s what it means:
- Specific. What do you want to achieve in the short term? Short-term goals can be defined by several hours, days, months, or up to two years, depending on several factors, like company size. Just make sure they are clearly defined, so there’s no room for ambiguity.
- Measurable. You can’t know if you’re making progress unless you measure it. A goal, such as, “I want to increase the number of followers in my social media accounts” is not specific, time-bound, or measurable. Instead, change it to something like, “I want to reach 1,000 followers on Instagram and 1,500 on Facebook by December 31.
- Attainable/Achievable. What are you trying to get out of your short-term goals? Is it achievable? Setting unrealistic goals can kill motivation. Try to focus on goals that are challenging yet not out of reach.
- Relevant. Your goals should align with your career, mission, and vision. Don’t set goals that are on the opposite path of what you want to achieve. Other alignment criteria include value, feasibility, appropriateness, and cost-benefit.
- Time-based. An open-ended goal may take too long to achieve due to a lack of urgency. Giving yourself a specific timeframe within which to hit your target is more compelling, and will push you to put your best foot forward.
Step 3: Set Milestones
The next important step is to break down your long-term goals into smaller, attainable goals. So, you want to make five million dollars by 2030? How do you get there? Well, that’s by covering one step at a time.
If you’re already running a business, you’ll start by performing the strengths, weaknesses, opportunities, and threats (SWOT) analysis to determine its current situation. You’ll be able to answer questions like:
- What’s holding you back?
- What weaknesses can your competitors exploit?
- What resources do you lack?
When you identify what your company does best now, find ways to devise better strategies to increase profits or beat the competition. Getting to the level of success you want is going to be a long journey, that’s why you need to break it into smaller portions.
Step 4: Reevaluate and Adjust
When you make a commitment to achieve, consistency will help you cross the finish line. Don’t lose sight of what you want or where you want to be. Think of the reward that awaits you when you reach your goal, and let that be your motivation.
Problems will always arise, and when they do, we tend to forget the long-term goals. If one approach hits a dead end, devise another approach. As someone once said, “If the plan doesn’t work, change the plan but never change the goal.”
Plan for Success
Remember, the road to success isn’t a straight one. It requires setting S.M.A.R.T goals, as well as strategic planning. Even with enough motivation, failing to plan is planning to fail.
Short-term planning and long-term planning play an essential part in your future success, and each step contributes toward achieving the results you want. Just be sure to frame your objectives in a way that’s easy to measure. The more specific your goals are, the easier they are to achieve and track their progress.