Getting Ready for Next Year: Choose Challenges Over Plans

Every year around this time, something familiar starts to happen inside most companies. The days get shorter, the inbox gets heavier, and the planning cycle starts. Teams start dusting off templates and updating numbers. Finance sends out guidance for budgeting. Product teams assemble roadmaps. Before long, every conference room holds the same air of fluorescent determination.  

Most of us who’ve spent time in large companies have experienced some version of this scene. Planning has become the default language of management. It’s competent, earnest, and entirely understandable. Plans make us feel responsible. They create the illusion of control.  

Too often, though, that feeling is an illusion. That’s because annual planning is an inherently present-focused activity. It takes the current year and extrapolates it forward, imagining the future as an extension of today. A plan is, fundamentally, a promise that the world will behave itself. And as anyone paying attention can attest, the world has stopped behaving. Future-focused leaders recognize this. They need to unleash their organizations to figure out what’s next. And so, in addition to their plans, they do something the rest of us don’t. They set focused challenges.  

The Power of a Focused Challenge 

The greatest focused challenge of the modern era was issued on a humid September day in 1962, when President John F. Kennedy stood before a crowd at Rice University and said the words that would define a decade. He declared that we would go to the Moon.  

That was a pretty ambitious challenge. No human being had even left near-Earth orbit. And if anyone was going to do it first, it probably wouldn’t be the United States. After all, the first satellite in orbit was Sputnik, launched by the Soviet Union in 1957. The first animal to orbit Earth was a small dog named Laika, also launched by the Soviets. And Cosmonaut Yuri Gagarin was the first man to get into space.  

Americans greeted each achievement with awe, dismay, and the uncomfortable realization that a rival nation had taken a profound technological lead. In the span of a few years, the U.S. found itself down, zero for three.  

That was the backdrop when Kennedy took the stage at Rice Stadium. The heat rose off the concrete. The crowd fanned themselves with programs. The world beyond the bleachers felt tense, unpredictable, and sharply divided.  

“We choose to go to the Moon,” Kennedy said. “We choose to go to the Moon in this decade…not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.”  

The goal was wildly beyond our country’s abilities. And Kennedy’s vision was scant on details. He didn’t offer a plan. He didn’t present a roadmap or a checklist. No one had yet mapped out the myriad aeronautic, medical, or engineering problems that needed to be solved. Kennedy himself didn’t know how it could be done. After all, he was a liberal arts major, not a rocket scientist.  

But what Kennedy offered was clarity. We needed to go to the Moon. Not Mars. Not Venus. Not to a space station. And we needed to get it done in the next eight years. What the country needed was a destination, a timeline, and a goal it could achieve.  

That challenge focused a nation. It gave scientists, engineers, and administrators a common purpose. And it unleashed creativity, because no one knew the answer to that challenge. The uncertainty didn’t weaken the challenge. It strengthened it. And the timeline was perfect. Eight years was long enough to be audacious and short enough to be real. 

Leaders unlock the creativity of their organization when they set focused challenges. They don’t have to have all the answers in place for how to achieve the goal—they just need to get everyone focused on the right question.  

When Satya Nadella reframed the company’s mission around democratizing AI, he wasn’t issuing a set of instructions. He posed a challenge that asked every team to rethink the assumptions behind their products. It wasn’t clear how things would play out. It wasn’t clear which technologies would win. But the challenge itself unlocked partnerships, business model shifts, and new ways of working—moves that no plan could have predicted.  

Tesla didn’t become Tesla because it built a better plan. It became Tesla because it set a challenge that forced the company to behave differently: build the safest cars on the road, even if the industry believed electric vehicles were fragile, unproven, or niche. That challenge reshaped materials, software, manufacturing, and even the way the company handled accidents. The plan changed every year. The challenge remained constant.  

Setting Focused Challenges 

The ability to set a focused challenge can galvanize a team. And yet, most leaders in large companies never have to develop this skill. Their careers reward execution. Their organizations reward predictability. Their culture rewards getting things done on time and on budget. These are admirable traits, but a company that excels at execution can easily become a company where people wait for someone else to define the goal.  

And if you’re not setting your own focused challenges, it can mean your challenges are getting set by your competitors. 

Shortly after the iPad was launched, I spent time with the CEO of a large consumer electronics company. He was proud to tell me that his team would have their own “iPad beater” coming out later that year. He said this with real excitement, as if the mere act of responding meant they were still in the game. But it also meant that his company was now responding to challenges set by someone else, on terms that played to someone else’s strengths. Trying to out-Apple Apple is not a winning strategy. 

The good news is that you can get good at setting focused challenges. It begins with understanding the difference between defining the “what” and dictating the “how.” A great focused challenge tells people what the goal is and why it matters. It’s specific enough to direct effort and broad enough to allow people to surprise you. It doesn’t tell teams which levers to pull. It unlocks their judgment rather than replacing it.  

Kennedy articulated the destination and the reason. He didn’t prescribe the path. He didn’t tell NASA which engines to build or which materials to choose. He simply said the Moon, before the decade ends, because if we don’t rise to this challenge, we risk falling behind as a nation.  

Focused challenges work when they’re memorable. And that means more than just setting a revenue or profitability target. Human beings don’t rally around spreadsheets. They rally around metaphors. When Steve Jobs was envisioning the second-generation iMac, he told his team to make it like a sunflower. He didn’t mean that it should have big yellow petals. He meant that it should be friendly and it should turn to face you. Apple’s design team translated that intent into shape, color, and a dozen other decisions. The metaphor didn’t constrain them. It freed them.  

One of the most common questions leaders ask is how many challenges an organization should take on. A startup can only solve one focused challenge at a time. If it tries to solve two, the company won’t survive long enough to debate the results. A larger operating business can sustain three to five focused challenges without losing coherence. Any fewer, and it’s not stretching itself. Any more, and it’s back in the world of planning: issuing long lists that dissipate attention instead of focusing it. A multi-business enterprise can have three to five challenges for each business. The point is to set challenges that are big enough to matter and few enough to remember.  

Set the Right Challenge 

Of course, you have to make sure you’re focused on the right challenge. In 2003, Indian industrialist Ratan Tata was driving behind a family who were all riding on a scooter together: a father, a mother, and two small children. It was raining. The scooter slipped and nearly crashed in front of him. The experience left Tata shaken. He knew there had to be a safer way to travel. Unfortunately, automobiles were far beyond what most Indian families could afford. So, as the head of a large automobile company, Tata decided to take up the challenge. He announced that Tata Motors would build a car for the common man: one that cost 1 lakh rupees.  

At the time, 1 lakh rupees was the equivalent of $2,000, far less than any automobile in the world. To ensure that the company was committed, Tata announced his moonshot goal to a skeptical public. The challenge forced everyone to innovate. Engineers redesigned manufacturing processes. They rethought supply chains. The next several years were a rocky road of breakthroughs and setbacks. At one point, his leadership team tried to convince him that a car costing 2 lakhs would be good enough. But Tata shook his head. “A promise is a promise.” 

When the Tata Nano was launched four years later, it proved that you could build and sell a car for $2,000. The company met the challenge by designing a car from scooter and motorcycle parts, rather than trying to economize traditional automobile systems.  

And yet, the Nano was a market failure. It turns out that Indians are highly status-conscious, and no one wanted to be seen driving a car designed for poor people. Ratan Tata proved that he could spark a company-wide explosion of creativity with a clear and focused challenge. But the Nano’s failure highlights the importance of setting the right challenge.  

But here’s the good news: if you’re a leader of a large business, you don’t have to do this alone. While Ratan Tata’s personal experience was no doubt compelling, it could have been augmented with some good consumer insight work. He just needed to ask. Too often, leaders turn to their strategy team to validate a direction they’ve already decided to go in.  

That is…deeply unwise.  

Kennedy didn’t wake up that morning in Texas and think, ‘Huh…maybe the Moon?’ His speech was the culmination of months and months of solid strategic work. NASA had already demonstrated its capabilities by making Alan Shepard the first American in space in 1961. John Glenn had orbited the Earth a few months before Kennedy’s speech.  

Create Multiple Missions 

It’s also important to recognize that teams don’t typically solve a big challenge in their first go. The United States did get to the Moon. But we did it with Apollo 11, not Mercury 1. There were many mishaps along the way, including the horrific incident of Apollo 1, when Virgil Grissom, Edward White, and Roger Chaffee were burned alive on the launchpad. Still, NASA pressed on, learning more with every successive mission. 

Teams who work in an agile product development model understand that approach intuitively. As Henrik Kniberg drew in his beautiful sketch describing Agile, you don’t make a wheel, then a chassis, then a body, then a car. Make a skateboard, then a scooter, then a bicycle, then a motorcycle, and then a car.  

In some companies, leaders choose to have multiple teams competing against the same challenge. That can work in places like Nike, where competition is in the fabric of the culture. But in places like Starbucks or Procter & Gamble, where collaboration is prized, that kind of situation can be toxic.  

Think long and hard about the challenges you set. And don’t change them unless you have to. Focused challenges demand persistence. They require sustained investment. They stretch an organization’s patience and its imagination. Leaders sometimes forget this because the corporate world tends to evaluate initiatives on quarterly timelines. But challenges don’t conform to quarters. They transcend them.  

Challenges over Plans 

Planning can feel inadequate in an era like ours. Strategic planning assumes a predictable world. Focused challenges assume a dynamic one. Planning tells people what to do. Focused challenges ask people how to solve something. One narrows judgment. The other demands it.  

And that may be the most important leadership implication. A focused challenge requires leaders to stay awake. It requires interpretation. It requires the ability to look at the ambiguity in front of you and say with clarity and conviction, “This is where we’re going.”  

Future-focused leaders don’t win because they have better plans. They win because they cultivate better challenges. And the leaders who thrive in the next decade will be the ones who can define the challenges that deserve their organization’s energy. Everything else will be a plan, and plans will keep collapsing under the weight of uncertainty.