The Curse of Short-Termism

Filed under - Archived Content

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

Published On: 28th Oct 2015 - Last modified: 13th Nov 2018
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