In 1965, a Royal Dutch Shell executive named Pierre Wack began developing a planning process unlike anything the corporate world had seen. He called it scenario planning. His method required executives to sit with genuinely uncomfortable questions — what if oil prices doubled? what if the geopolitical order collapsed? — and build strategies capable of surviving more than one possible future.
The result was that Shell, alone among the oil majors, was prepared for the 1973 oil crisis. When prices quadrupled and competitors scrambled, Shell adapted. It became the world's second-largest company. Wack's method became the gold standard of strategic planning.
Nobody does anything like this anymore.
The Planning Horizon Has Collapsed
Ask the strategy teams at major corporations what time horizon their planning actually covers, and you get a surprising answer. Formally, most large companies still produce five-year financial projections. Informally, most executives will tell you those projections are fiction beyond year two, and that year two is optimistic.
The real planning horizon, in most organisations, is the next twelve months. The real decision-making horizon is shorter still — driven by quarterly earnings cycles, board review cadences, and the speed at which market conditions can change in an era of constant technological disruption.
This is not necessarily a failure of imagination or discipline. It is, in many cases, a rational response to genuine uncertainty.
Why Long-Range Planning Broke Down
The five-year plan was developed in an era when the future was relatively legible. Markets moved slowly. Technology cycles were long. Competitive dynamics were stable. You could forecast five years forward because the world five years forward was likely to look reasonably like the world today.
None of those conditions hold anymore.
The AI transition — still in its early stages — is making the future of entire industries genuinely unclear. Companies that were confident in five-year projections for their legal services business, their finance function, their customer service operation have had to tear those projections up and start again. Not because the projections were badly made, but because the inputs to the projections changed fundamentally.
Geopolitical instability adds to the uncertainty. Supply chain disruptions that used to be considered tail risks have happened repeatedly and severely. Climate events are affecting operating assumptions. Interest rate movements have rewritten project economics across multiple industries.
In this environment, planning five years out is not strategic. It is, in many cases, a ritual exercise that occupies senior time without producing actionable output.
The Agile Takeover
The management philosophy that has replaced long-range planning in many organisations is borrowed from software development: agile. Move fast. Test. Iterate. Respond to feedback. Don't overplan.
Applied to technology development, agile is genuinely powerful. Applied to corporate strategy, it has mixed results. Agility is valuable. But agility without a direction is just speed. Companies that are very good at executing against short-term priorities can be very bad at building anything that takes longer than a year to develop.
The organisations that are struggling most with the death of the five-year plan are those in industries where the most important investments are long-duration: energy infrastructure, pharmaceutical development, advanced manufacturing, real estate. You cannot build a semiconductor fabrication plant in eighteen months. You cannot develop a new drug on a quarterly review cycle. You cannot retrofit an energy grid on an agile sprint.
For these companies, the inability to commit to long-term plans is not just inconvenient. It is potentially fatal. Capital that will not commit to a long horizon cannot fund the investments that deliver long-term competitive advantage.
What Good Strategy Looks Like Now
The answer, emerging from the organisations that are navigating this well, is not to abandon planning but to change its character.
Good strategy today has a clear direction — a genuine conviction about where the world is going and what position the company wants to occupy in it — and flexible tactics for getting there. The direction is long-term. The tactics are short-term and responsive to new information.
This is not as simple as it sounds. The discipline required to maintain a long-term conviction while remaining genuinely open to short-term course corrections is rare. Most organisations do one or the other: they plan rigidly and fail to adapt, or they adapt constantly and fail to build.
The companies doing it best tend to have leaders who can hold both instincts simultaneously — strategic patience combined with tactical agility. They plan not to predict the future, but to think rigorously about what they believe and what would change their mind.
Wack would have recognised the approach. The goal of scenario planning was never to predict the future. It was to make you capable of acting in more than one of them. That lesson, sixty years old, turns out to be the most relevant piece of strategic advice available for the current moment.