Short Term Focus

Did you ever hear the joke about the dyslexic, agnostic, insomniac?  The guy who stayed up nights wondering if there was a dog?  I wonder about a different kind of person - the one who is infinitely productive at all the wrong things, driven by the wrong motivators.

I wanted to write about this after reading a story in the Wall Street Journal entitled "When Meeting Targets becomes the Strategy, CEO is on Wrong Path".  This was in the March 8th edition.  You have to register to see the story.

Anyway, the gist of the story is about the pressure sales teams feel to meet quarterly targets and all the day to day tactical stuff that becomes the focus.  The author, Carol Hymowitz, notes that in these environments, "employee loyalty and teamwork erode quickly, along with innovation and risk taking" since many firms are cutting employees to meet quarterly targets and are stepping up pressure on the remaining employees to meet those targets.

A recent study quoted in the article by Susan Annunzio of Hudson Highland Group in Chicago found that the biggest impediment to high performance in an organization is short term focus.  After interviewing almost 3000 managers and knowledge workers in global companies just 10% said they felt they worked in high performing groups, while 38% said they worked in "non-performing groups".

I understand the need to meet quarterly objectives - anyone who has worked in a startup or a publicly traded firm has felt that pressure.  However, we've got to find a way to help people see beyond the quarterly numbers and free them up to take risks and try out new ideas.  Leadership in an industry or product is based on continuous innovation, which requires new ideas and risk taking, some of which will not help achieve this quarter's numbers.  The more we focus on the short term, the more our longer term success is placed at risk.

I can drive productivity to infinity by cutting costs and people and maintaining the same output.  However, this short term focus will derail my ability to deliver for my customers eventually and drive away the biggest resource I have - my people and their corporate knowledge.  It's time to balance the desires of the investors and their short term objectives with the requirement that our firms invest in their people, their ideas and the fruits they'll bear in the future.

Comments

[G. Garrett]

Don't you mean "insomniac" rather than "amnesiac"?

[Jason E.]

Great post.

I work for a large multinational corporation. The area in which I work has gone "metric happy".

I am all for measuring things. I am all for using metrics to improve performance.

If you do not measure the right things, however, you are only bogging down your organization by making your employees waste time measuring things that do not tell you anything about the effectiveness of your organization.

[steve]

While I generally agree with your premise that quarterly measurement can be unhealthy, there is a completely different side to that argument. I submit that quarterly planning, goal realignment (minor realignment, not major), and review, are critical for a company that fits into that 38% of non-performing groups. How so? Quarterly review is the only way to ensure that a group begins the process of behaviorial change, after determining that change is needed. Setting goals once a year for these organizations is nice and rah-rah and makes people happy for the moment. But, without proper realignment of focus (through repetition) people will gravitate back to the comfort zone, the "norm" if you will. And as everyone knows, if you do what you always did, you'll get what you always got. A little different focus than your original post, but I hope you can see the correlation.

[Everything Counts]

I completely agree with you. Keeping short term focus and reviewing the focus at short interval of time will keep the employees motivated to achieve their goals since the toughest thing for most people is to have a high level of motivation in all phases of their life.