Over the last decade, many have observed that American car manufacturers’ reliance on gas-guzzling sport utility vehicles may be shortsighted. It was predicted that once the cost of gas skyrocketed and the popularity of the vehicles began to wane, it would mean a downturn in profits for the Big Three.

Then Hurricane Katrina swept ashore and chaos ensued. The cost of gas became prohibitively expensive and SUV sales suffered. In fact, they were down 43 percent in September from a year earlier. Automakers blamed the weather, but business analysts say the problem was a failure to invest in long-term planning.

Dr. Ron Capelle, president of Capelle Associates, a company dedicated to helping organizations enjoy optimum performance through organization design, says companies need to look beyond the standard one and two year business plans.
“Specifically, the companies need a survival plan for the long haul,” he said. “And to do that, they need to have people at the helm who can anticipate the kind of market in which their products will be competing 5, 10 and even 20 years down the road.”

Dr. Capelle isn’t suggesting that organizations need a crystal ball. They need to have people capable of building an organization that anticipates change.

Articulating and communicating the long-term vision throughout the organization is a prime act of leadership of the CEO, said Dr. Capelle. It sets the framework for the whole of the on-going organization plans.

So, how important is long-term planning? Just ask the executives at Toyota. In 1994, Toyota strategists anticipated a time when a fuel-efficient car would be a priority for many buyers. While they produced popular and profitable SUVs, they also chose to put their money into an environmentally-friendly car for the 21st century. They dedicated the resources and rolled out their first hybrid in 1997. The company spent a reported $800 million developing the Prius. It took a while to catch on, but Toyota nurtured and improved its product over the years. In September, sales were up 90 percent.

It is a perfect example of investing in long-term planning, said Dr. Capelle.

“A company only interested in maintaining the status quo will ultimately be left behind. A CEO who is willing to develop an organization that can anticipate and adapt to change will prosper,” he said.

Strategic Management Society to honour
Dr. Capelle at Anniversary Gala

Dr. Ronald Capelle, president of Capelle Associates Inc, will be honoured as one of the founders of the Strategic Management Society (SMS) at the society’s 25th Anniversary Gala Dinner in late October.

The gala will recognize the significant contribution that Dr. Capelle and the society’s co-founders have made to the developing field of strategic management.

Over the last 25 years, the SMS has grown to be the most influential professional organization for scholars, consultants and business executives interested in strategic management. Its membership now numbers more than 2000 people from 55 countries.

Email us at info@capelleassociates.com, or call us at
416-236-3044 to learn more about how you can use Organization Design to further enhance your business
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