When short-term wins negatively impact long-term success

by jeffhilimire on November 12, 2013

I was talking to a friend recently who works at a large organization and he was venting about how frustrated he was with the culture at his company of working hard for short-term wins at the detriment of long-term success. Be it to impress the C-suite executives, or to wow the press, or to appease the shareholders, it seems most large companies today are focused entirely too much on short-term gains.

I commiserated with my friend because that focus on short-term over long-term was one of my biggest frustrations at my previous company and why I needed to step back into a startup where I would be able to shape the vision and control the path to achieving it. When you focus on short-term wins you start to lose the big picture and its up to the leadership (CEO, COO, President, and the Board) to ensure that the company doesn’t fall into that trap.

I’m currently 28% through the book, The Everything Store: Jeff Bezos and the Age of Amazon. I know I’m 28% through because I’m reading it on the Kindle and it tells you that kind of thing. It’s a really good read and I highly recommend it (as @interpolate recommended it to me).

One of the things you immediately get a sense for is that Bezos cares only about the long-term vision of Amazon. He’s relentlessly* focused on building the largest store on the planet, incurring billions of dollars in losses in order to achieve that vision and often hiding key financial statistics from the public in order to allow Amazon to stay on the right path.

You can’t do that unless you’re fearless. There’s a particular passage in the book that speaks to the way he handled this pressure:

But through it all, Bezos never showed anxiety or appeared to worry about the wild swings in public sentiment. “We were all running around the halls with our hair on fire thinking, What are we going to do?” says Mark Britto, a senior vice president. But not Jeff. “I have never seen anyone so calm in the eye of the storm. Ice water runs through his veins,” Britto says.

I’m acutely aware of the fact that at Dragon Army, if we are to be the company I want us to be, we will have to focus on the long-term plan and less on the short-term wins. With some companies, short-term wins are what is needed. With others, there are sacrifices that have to be made in order to achieve the long-term success plan.

With my first company, Spunlogic, our vision was to build a digital agency that would be acquired for <INSERT A LOT OF MONEY>. To do that we knew we would need to grow fast and have big name brands on our roster. So in the early years we often sacrificed profit in order to achieve those two things. We knew if we got to a healthy growth pattern and we were working with large brands, that the profits would come. Thankfully, that plan came to fruition and we had a very successful exit. But if we had worried too much about the short-term wins, in this case profit, we would have certainly had a much harder time reaching our goal.

* In fact, type in relentless.com and you’ll end up at Amazon ;) 

 

  • Sam Hosokawa

    Great post Jeff. Read this article, written by the CEO of Unilever: http://www.huffingtonpost.com/paul-polman/sustainable-business-wher_b_4064391.html If you’re not familiar with their strategy, it’s really impressive. He touches on the long-term vs. short term demands of shareholders, and how they’ve rid themselves of short term guidance and other things that detract from long-term growth. It’s pretty inspiring.

  • http://www.jeffhilimire.com Jeff Hilimire

    Thanks, Sam, I look forward to reading that!

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