The cycles of growth and contraction are a fact of life. The 20^th century saw the Great Depression and then post WW-II boom as the very extreme versions of these cycles.  Zakaria points out that the cycles are getting shorter.  We had a boom in the late 90s followed by a crash in 2001. The next boom was in 2004 followed by the crash in 2008 and 2009 of first derivatives and then housing. The cycles of growth and decline will continue.  Companies will succeed and fail.  The cycles are getting as short if not shorter than five years.

If five years is the typical projection for a business, then should not a business plan with these cycles in mind?  It is difficult to forecast these cycles, and if one could predict them then they could take advantage of them.  Instead, you can plan for the contingency.  What if things go horribly wrong? What if things go horribly right?  The reality is that if things go horribly right you usually continue to do what works, but if things go horribly wrong, then you have a problem: what do you do next?  Contingencies need to be planned and expected.  Diversification in product and service offerings, capabilities and in execution should be examined before it happens.

My prediction is that contingencies will become more important in business plans in the future. What else could this company do? What do they do when in three years their primary product is no longer successful? 

Address it and you can ride the cycles up and down.