Impact of Using Levels Theory on Developing Long-Term Strategies

Speaker A Jack's level of development certainly seemed to me to be a sensible idea and a good guideline for certain companies. These are companies that are are either complex or the very nature of the work that they do requires that they make very long term investments. Perhaps the type of company I'm most familiar with, which I think the ordinary people would relate to, is oil companies. Oil companies have to pay attention to the long term demand for hydrocarbons, in fact, to the long term demand for energy. They have to look forward to the period when either hydrocarbons won't be as plentiful or the pollution that goes with them will no longer be as acceptable and it will be much more costly. So they have to take an interest in building up energy reserves for quite long periods ahead. They have to look at the political situation in the world because they often find the oil, as we well know, in politically hostile territories or remote territories that are not politically stable. So they have to build up a balance. If they said they would only work in politically stable areas, they would not have enough reserves to be comfortable about their future and there would be huge competition to own those reserves anyway. So energy companies, by definition we can all see that they need to take the long view that they need to plan a long way ahead. They need to build up skills in their management and staff which are relevant to that long period. We can find businesses at the other end of the scale where perhaps that is not so true. If we take, say, many retail businesses, it may be that they have so got to concentrate on the competition over the next five years. That providing they have a reasonably educated staff, providing they have reasonable options on property, if they need to expand or the confidence that they can rapidly acquire what they want, they would have to pay far more attention than an oil company to the next few years, because without that, they'd be in trouble. So I think the Jake's idea actually needs to be applied, as I'm sure it is applied with some discrimination. It is not a one size fits all philosophy. It is a one philosophy, can fit all sizes approach.