Many strategic-planning programs begin with the extension of the annual operating budget into a five-year projection. This can be a valuable exercise, particularly for institutions that have operated on a yearly or even monthly planning cycle. Most companies, however, soon discover that five-year operational and financial forecasts, in and of themselves, are ineffective as strategic-planning tools for a fundamental reason: they are predicated on the implicit assumption of no significant change in environmental, economic, and competitive conditions.