Joe Biden: Business Leaders, you are too Focused on Short term
Vice President Joe Biden wrote an opinion piece that ran in the Wall Street Journal this week. His observation is that business leaders are stifling American prosperity due to focus on short-term results. His solution is more rules on CEO pay and stock repurchase programs. There is a point to be made that too much focus on the short-term impact of stock price can lead to long-term problems, but there are many reasons for leaders to focus on the short term.
Short-term focus done correctly has many benefits. Below are five (plus):
- Short-term focus gets organizations into action. Short-term periods create urgency where specific actions can be taken, now.
- Short-term focus gets organizations to test reality. By looking at the short-term, teams can see what works and what does not, quickly.
- Short term focus makes organizations prioritize. With short time frames, the non-essential falls by the wayside.
- Short term focus makes organizations focus on what is within immediate control. Long term factor inflation are ignored in favor of measures like client feedback.
- Short term focus helps organizations accelerate. Focusing on short-term wins and improvements, can provide fuel for longer term changes.
- Short-term focus can creates a sense of team. People know the immediate impact of their work.
Thank you Mr. Vice president on your business advice regarding short-term versus long-term focus. I look forward to future advice to business leaders on the topics of organizational effectiveness. The topics of accountability, efficient use of assets, and value creation would be of particular interest.