As an innovation leader, you might face what appears to be a contradiction:

1. Your organization needs a long-range strategic plan. You cannot survive without looking ahead two or five years and charting your course.
2. In today’s environment of rapid change and massive disruption, any long-range plan you make is likely to be shredded by the marketplace. One thing agile has taught us about trying to plan everything is that overplanning usually doesn’t work.

Somehow, you must create a strategic plan that’s both durable and flexible. An agile strategic plan. This is especially true in planning major capital investments—things like leasing warehouses and building factories. In January 2018, Toyota and Mazda announced a joint plan to built a massive new factory in Huntsville, Alabama. The venture, which would cost $1.6 billion and create 4,000 jobs, is scheduled to open in 2021—fully three years after the announcement, which itself had capped several years of scouting and pre-planning. Toyota’s chief executive, Akio Toyoda, said he was confident that the plant would be a “built-in-America success story.”

The two Japanese companies said the plant would be capable of making 300,000 cars a year. Analysts warned that car sales in the United States are leveling off, putting into doubt the rationale for factory expansion. Bob Carter, executive vice president for vehicle sales for Toyota Motor North America, dismissed concerns about the new plant’s prospects. “A plant is a fifty-year investment,” he said. “You can’t make plant-investment decisions based on the business cycle.”

Want super-long-range planning? Talk to the people at Boeing. In June 2017 the world was given a peek at Boeing’s plans for a new small twin-aisle aircraft. Boeing released the first image of its new “middle-market airplane” at the Paris Air Show, six years after the 787 Dreamliner first went into service after a decade in development. Industry leaders have started calling the new plane the 797, continuing the series that began sixty years ago with the 707. Boeing believes there could be a market for more than 4,000 such aircraft over 20 years, starting in 2025, when the first 797 would be delivered to airlines.

The year 2025! Can you imagine planning that far ahead? The people at Boeing can—because they have to. Their arch rivals across the Atlantic, Airbus, are doing the same.

Each is determined to stay one step ahead of the other.

Contrast this with the level of long-range planning appropriate for the industry that invented the agile methodology—software design and implementation, where your long-term goals are often no more than two weeks in the future. It’s like comparing the life cycles of an elephant to a fruit fly.

The Happy Medium Between Short- and Long-Range Planning

To find a balance between long-range planning and software-industry agile methodology, let’s look at how the world’s largest software developer and retailer approaches strategic planning.

Based in Redmond, Washington, Microsoft Corporation takes in nearly $90 billion in revenue each year and employs 124,000 people. For a company of that size, strategic planning is a necessity, but so is agility. With Satya Nadella assuming the position of CEO in 2014, a year later the company’s 10-K filing revealed the broad strokes of its strategic plan.

This is the first part of the company’s vision statement:

Microsoft is a technology company whose mission is to empower every person and every organization on the planet to achieve more. Our strategy is to build best-in-class platforms and productivity services for a mobile-first, cloud-first world.

Then:

The ambitions that drive us

To carry out our strategy, our research and development efforts focus on three interconnected ambitions:

• Reinvent productivity and business processes.
• Build the intelligent cloud platform.
• Create more personal computing.

Notice the three action verbs used in the statement above: “reinvent,” “build,” and “create.” All suggest change and growth.

The company appears to be deemphasizing the importance of Windows, as though the operating system’s purpose is to be a vassal in service of Microsoft’s other businesses. This may reflect the company’s latest financial trends: Declining device sales and growing cloud revenue. They’re looking ahead into the future, and trying to anticipate the course of change and the likelihood of disruption.

No matter where your organization lies on the spectrum between global conglomerate and scrappy startup, strategic planning is a constant game of making decisions based on incomplete information. The goal of strategic thinking, or the thought process for deciding which markets to compete in and how, is about trying to assimilate floods of information and make decisions that ensure the company ability to innovate and thrive.

Your job as an innovation leader is to find the delicate balance between long-range strategic planning and the necessity of leveraging change and disruption as they occur and turning them to your advantage.