Taking the Long View
Why commitment to long-term growth prevails over short-term gains.
- lack of imagination, foresight, or intellectual insight: a narrow view of something.
Taking the long view and fighting off the pressure to deliver short-term results and quick growth is essential. Why? Because quick gains and shortcuts usually don’t last, and then we’re right back to where we started. Not only have we seen the benefits to an organization as they take a step back, see a clear path, and execute a consistent strategy; we also see a real need for marketers to choose this path to remain effective. Consumers today have little trust for advertising, coupled with decreased attention spans, and a surplus of choice—we simply can’t afford to be short-sighted.1
In a transparent world, the walls of your organization have turned to glass. Your internal culture is your brand. As consumers shop with their values, and employees seek out organizations that fit their values, fostering a vibrant intentional culture is more important than ever.2
There’s been a massive shift in consumer buying trends moving away from a focus on the lowest price (resulting in a race to the bottom), to seeking out brands that align to their values. Consumers are concerned with an organization’s values and look for transparency; how they treat their employees, how they care for the environment, their mission, etc. In this sense, workplace culture is a differentiator and something that attracts loyal customers.
While culture cannot be created overnight, a long-term approach to investing in your internal culture pays off externally by creating customers that are with you for the long haul (think customer lifetime value). What happens inside your walls, will eventually become a part of how those outside your walls view you, or as Ken Blanchard put it: “profit is the applause you get for creating a motivating environment for your people and taking care of your customers”.
When we think of corporate culture, Southwest Airlines comes to mind. Southwest has consistently outperformed the industry, and many books have been written about their success; largely credited to their culture—even their stock market symbol (LUV) reflects their caring culture.
Culture isn’t some warm and fuzzy team-building exercise with inspirational posters on the wall, it’s about how you behave and how you make decisions—it’s about taking the long view and instilling values. So if it works, why haven’t others copied Southwest? Because culture is unique and hard to copy! Southwest has a team dedicated to developing and maintaining their culture, fostering this deliberate differentiation strategy since its inception.
SOURCE: McKinsey Corporate Performance Analytics; S&P Capital IQ; McKinsey Global institute Analysis
McKinsey & Company conducted research to measure the impact of short-termism and found that companies that operate with a long-term view outperformed their peers in almost every financial metric over a 10+ year period!
When large publicly traded companies such as Unilever and Amazon stick to a long-term view and resist the immediate pressures from Wall Street investors, they’ve consistently delivered superior results. These metrics include revenue growth, job growth, and even market capitalization.3
So what exactly are these ‘long view’ companies doing differently? Two areas that the research identified showed they maintained consistent and sustainable sources of growth, and invested significantly more in Research & Development than their peers. During the financial crisis of 2008, they continued to invest while others cut their R&D spending. By investing in this future growth and remaining committed to their long-term goals, these companies were rewarded with much higher gains when the economy recovered, leaving their peers behind to play catch-up. In summary, they stuck with their game plan.
“companies that operate with a long-term view outperformed their peers in almost every financial metric over a 10+ year period!”
According to a multi-stream management approach, the triple bottom line includes balancing Financial, Social, and Environmental performance. We’ve already addressed the financial and social (workplace culture) aspects above, so what does taking the long view mean from an environmental perspective? How about leaving the world a better place; treading lightly so as not to leave a lasting negative impact for future generations?
It makes good business sense to ensure you’re behaving in a sustainable way that sets the foundation for operational longevity. In fact, it likely ties back to the purpose of why you exist. One of our core values is Stewardship; actively caring for the community and environment by doing the right thing. Fortunately, we are surrounded by many wonderful corporate stewards in our community and don’t need to look very far to see businesses that are modeling this well through volunteering, funding non-profits, sponsoring sporting events and the arts, ultimately building a stronger community together.
1Dominic Barton, James Manyika and Sarah Keohane Williamson. “Finally, Evidence That Managing for the Long Term Pays Off”. Harvard Business Review, 9 Feb. 2017, https://hbr.org/2017/02/finally-proof-that-managing-for-the-long-term-pays-off
2TrendWatching, Glass Box Brands https://trendwatching.com/quarterly/2017-09/glass-box-brands/
3Esme Rottschafer, Incite Magazine, 2020 Issue 1