Short-term decision making can be detrimental to your business, but there are some things you should think about to help plan for the future, including:
- Is It the Market?
- Why Do We Ignore What We See?
- Hold Your Leaders to Account
In the eighth of nine articles covering things he finds surprising in business, Peter Massey explores the short-term decision versus the long-term consequences.
Thinking for the Future
Do you sit in meetings and think “that isn’t going to work the way they think it will” or “they’re not thinking about the knock-ons” or “yes, but what about the other thing over there?” Short-term answers, when problems are more complicated, often prompt these questions.
It is very common to see what one might call “short termism” or the prioritization of immediate gains over long-term success.
You hear the phrases “deal with what will kill you first”, “low-hanging fruit”, and the ubiquitous “quick wins”.
Is It the Market?
Short-term thinking can lead to decisions that sacrifice customer experience and purpose in favour of this quarter’s results.
Short-term thinking can lead to decisions that sacrifice customer experience and purpose
Indeed the stock market quarterly updates and annual forecasts drive the value of the company without actually changing anything tangible.
This perception over substance drives or constrains every CEO and board. It gets embedded in executive incentive and reward schemes.
Yet evidence shows that companies do better in the long run to avoid chasing “silver bullets”.
Better to invest in the longer term with harder to deliver programmes such as investing in people, greater innovation, R&D and technologies, aligning decisions with a clear purpose rather than just chasing the £ or $.
But, like a football manager, you cannot only invest for the long term and ignore the results. There has to be progress if you want to be given patience.
Why Do We Ignore What We See?
Some people are good at observing the longer-term implications of decisions, the consequences which others cannot see or choose not to look for.
So why do some ignore what they know or see?
Is It Pressure?
Time pressures to deliver within certain periods at the expense of what happens later. So-called “descoping” occurs in major projects at the expense of the long term.
Incentive pressure to meet some goals or certain KPIs at the expense of the overall result.
Risk aversion causes people to only do what they can see will work, therefore often near term rather than long term.
Competition and social comparison may lead to short-term gains or unaligned decisions in order to win an argument or prove a point.
Confirmation bias may lead people to jump to conclusions when under pressure, in the face of contradictory evidence or lack of any evidence.
Is It the Culture We Are In?
Is it the culture we are in? Different cultures use language and handle concepts in different ways.
I remember being told I was being too Anglo Saxon by talking business during dinner and before the coffee in France.
What they meant was that I was missing out by not deepening the relationships, enjoying the company, finding out the motivations and context. All before we talked business to do a deal.
Anglo Saxon meant being too linear, too straight to the point, using a different etiquette from my hosts.
When explaining a concept or addressing a question, I learned that different cultures examine a problem differently.
Some want to drive through the problem as fast as possible whereas some explore every angle of the problem before starting to draw conclusions.
And there are different satisfactions in each method. Being quick and being thorough are not mutually exclusive, but they often compete.
To discover more great insights about contact centre culture, read our article: The Importance of Call Centre Culture and How to Improve It
Hold Your Leaders to Account
Certainly things have changed for the better in business, with more awareness and consideration of cultural differences, of neurodiversity and of the consequences of decisions on sustainability, ecology and the planet.
But lip service abounds, so it behoves us all to hold our leaders to account when we see the short term damaging the long term.
Thanks to Peter Massey at Budd for this great article.
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