Short-term Management

The curse of short-termism

We focus on the immediate future: 

  • The stock market obsesses about interim returns
  • Politicians like to see instant results
  • Managers must hit quarterly targets 

We rarely look beyond the next 6 months.

It is easy to hit a short-term target

It doesn’t take too much talent or imagination:

  • If you have to cut costs — sack some employees
  • If you want to improve profits — skimp on the after sales service
  • If you must increase sales — slash prices for new prospects

Just don’t worry too much about the long-term implications.

But short-term targets mortgage the future

They destroy your customer’s trust:

  • If the employees have been sacked then there is no one to help them
  • If the service is poor they will vote with their feet 
  • They get most upset when they see that their neighbour has bought the same product for half the price

Customers who don’t trust you become short-term customers

Which in turn leads to short-term revenues.  This is a problem — unless you believe finding another customer is as easy as setting a short-term sales target.

Any jerk can have short-term earnings. You squeeze, squeeze, squeeze, and the company sinks five years later ~ Jack Welch

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Image by Jose Roco

Comments

  1. …..and yet some companies recognise this, abandon quarterly reporting, invest for the long term in their people, their equipment and their environment and, guess what…..they reap the benefits in terms of revenue, profits, loyalty and longevity…..go figure ;)

    If some people can do it why do others not follow?