How Short-Term Wins Can Lead To Long-Term Failures

Can the sum of a row of many victories over many years be defeat?General Löwenhielm in Gabriel Axel’s Babette’s Feast

New customers! More revenue! Huge ROI!

Immediate, positive results are attractive and addictive. It’s easy to understand why: People get praise from their bosses. The current market rewards quarterly capitalism with most investments currently being held somewhere between four and eight months—a big change from the average holding of over eight years during the 1960s.¹ And, many people’s jobs depend on these immediate results.

But, short term wins don’t necessarily translate into long-term company health. For example:

• You may get a lot of new customers, but your product offerings and brand may not be able to support the new customers over the long-term. In focusing on them, you may ignore your core customers, making it easy for other companies to entice them.
• You may have increases in revenue, but it may not have increased in a way that is in line with the brand. Over the long term, the brand becomes diluted and affect long-term growth.
• Your ROI may be large, but it may not be setting you up for the future. Instead, it may be taking advantage of the current situation and not the long-term. In the long-term, you may be at a disadvantage compared to competitors that invested in the long-term now.

And, the market can reward a long-term look: companies that promote the short-term in their quarterly reports are more likely to attract short-term investors and have higher risk, whereas companies that promote the long-term are more likely to attract long-term investors.²

Businesses should support initiatives that create long-term sustainability rather than rewarding short-term initiatives that may be profitable only as long as someone’s limited tenure. Any initiative that doesn’t push closer to the long-term vision should be discarded, no matter how attractive it is at the moment.

What you do today determines the type of business you can become tomorrow.

Are you doing something that isn’t contributing to the long-term vision of the business?

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