Smart Leaders Play the Long Game

We live in the age of instant gratification. We want it now as consumers—hence the exponential growth of credit since the 1960s, whether in credit cards, conditional sales contracts, automotive loans or mortgages. And when it comes to business, the mindset of short-term financial results is foremost in the minds of CEOs, board chairmen (hardly any are women, incidentally) and shareholders. Consideration for the longer term, whether consumers or big-shot CEOs, is almost non-existent.

The sheep-like behaviour of consumers—coveting their neighbours’ or friends’ new acquisitions—is understandable to a degree. After all, we’re human beings who’ve been carefully and strategically groomed by corporations to desire more in our quest of perceived self-fulfillment and status. However, what’s somewhat bizarre and indeed irresponsible is when those people leading organizations engage in short-term thinking to attain some form of financial or ego-centric goal.

It doesn’t have to be the head of a company seeking financial results to please shareholders or credit rating agencies. It could be the leader of a not-for-profit organization who’s attempting to please her board of directors. Or it could be a deputy minister (equivalent to a secretary in the U.S. government) who is earning brownie points to downsize his department.

Your correspondent worked three decades for the Government of Canada, and during this time those in top leadership positions could earn bonus pay for cutting employees from the payroll. The problem was that as soon as a certain government (administration in U.S. terminology) achieved its downsizing cuts, the public service would then grow again. The losers from this game? Taxpayers and citizens.

Whether you’re the head of a private company (large or small) or a not-for-profit agency or a public sector department, your primary job is to look to the long-term: the horizon where nothing is certain, where obstacles and whitewater will challenge the organization along the way, and where you’ll need to be adaptable and to show resilience.

Someone who offers special insights into thinking strategically, and unfortunately who died too soon, is Stephen Covey (from a cycling accident in July 2012). Covey’s pithy messages from his numerous leadership books included one vitally important one: Begin with the end in mind (one of his 7 Habits of Highly Effective People).

Applying this lesson to a corporate setting means that those at the top must create a vision of the future that enrols all employees and that establishes a path with clear goals along the way. Where does your organization want to be in, say, five years? Or ten years?

Cost-cutting (people are the low-hanging fruit) is a tactical exercise that is sometimes necessary. However, it’s hardly a strategic approach to addressing competitive issues if you’re a for-profit company. If you’re part of a not-for-profit agency or government department, cost-cutting often serves to destroy morale and hasten the exit of talent.

The message here is to align short-term tactical decisions (the typical quarter-to-quarter business approach) with long-term strategy. Unfortunately, taking a long-term view is anathema to much of North American business. And hence the regular turbulence of sudden layoffs in companies as top executives strive to please shareholders and boards of directors.

Those who play the long game and make the effort to invest in building their organization’s resilience and adaptability to constant change are the strategic leaders of the 21st Century. Reactive 20th Century management approaches need to be deposited where they belong: in the dustbin of history.

Someone is sitting in the shade today because someone planted a tree a long time ago.
— Warren Buffett

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