From the title and the timing of this column, you may have thought this column will be about the presidential election, state of the economy, or some other rant about our country’s future. But it’s not – I’ve learned long ago not to discuss politics with colleagues, friends, or even enemies!
But in a way I am talking about our country’s future, because if we don’t think long-term within our organizations, we won’t have well-functioning, profitable companies with jobs to employ our people.
Our society tends to have a short-term mindset, in ignorance of the distant consequences of today’s decisions. Short-term thinking is too entrenched in our society and corporations and often, institutional rigidities add to this myopia.
It has become apparent that many of the problems we face today share one common theme: a lack of foresight. We continue to pursue short-term gains at the expense of our long-term well-being. According to a study from Columbia University, when presented with a cigarette, smokers who were told to envision the long-term consequences of smoking (lung cancer, heart disease, early death) were far more likely to resist the urge to light up than those who were told to imagine the short-term benefits of smoking (it feels good, it’s calming).
The hazards of short-term thinking in business are well understood. Of the recent crises that have shaken companies, markets and even entire economies… many can be traced to decisions made for immediate gain – often for the shameless benefit of individuals… and at the expense of future prosperity.
We need to focus on creating and nurturing a culture of long-term thinking. Strategic planning and goal-setting are part of this. We need to anticipate problems and take measures to head them off. But long-term thinking isn’t only important in preventing problems, it’s critical for organizations to keep up to speed in this rapidly changing, global competitive environment. Bill Gates once stated of his early Microsoft days: “There was no near-term thing. It always was this many-decades thing where there were no shortcuts and we’d sort of put one foot in front of the other.”
Managing for the long-term guides the ethics and behavior of both management and employees. Capital markets demand quick returns and quarterly results, but we need to stop rewarding organizations and employees for meeting short-term targets. We’ve known since Skinner’s pigeons and Pavlov’s dogs that reward shapes behavior. So what can you do in your position of leadership to help your organization make this shift?
- Strong leadership is needed to model, facilitate, and support a change in the culture and the way of thinking. Culture often echoes management style.
- Create and support practices that enable and prove the benefits of longer-term thinking. Behaviors need to change to really have an impact in changing the culture.
- Spread knowledge of these practices within and among your organization and supply chain.
- Make sure the reward structure reinforces both short and long-term thinking, rather than just short-term.
- Know where your organization is going. What is its mission, values, and long-term goals?
- The aim is to enable the change so that longer-term thinking becomes the norm and policy-makers can set rules that sustain it.
