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
If you enjoyed this post click here to read the next
Read another opinion
Image by Jose Roco
