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