Why leaders need to shift their focus to long term.
I spent a decade talking about lasting and long term results while marketing an e-learning solution to the healthcare industry. The words fell flat.
The value of training and development takes resources and time to realize a return. There is nothing fast or easy about it. When markets are dependent on short term returns, it’s a tough sell.
I’ve written about it before but the topic surfaced again when Paul Tudor Jones, a long term Hedge Fund Manager, recently acknowledged the shortcomings of capitalism.
Acknowledging the existence of a problem is an important step. The solution will not be easy because it will take a fundamental change in how Corporate America operates.
The Sinking Ship
I’ve done a lot of turnaround work over the years. Turnaround simply means a company or project is underperforming and leaders need help addressing the issues.
One of the issues that I always found puzzling was why people cling to a sinking ship rather than embrace the needed changes.
Resistance is often chalked up to fear of change, potential harm or inability to imagine something better. All good answers but there might be something more to it.
I’ve been reading Good Economics for Bad Times lately and discovered another perspective to what I refer to as the sinking ship problem.
For many of us, the work we do shapes our identity and gives our life meaning. I’ve made the mistake of underestimating the importance of a title, role or even the nature of the work itself.
Comfort with the status quo might actually be more about pride in the work. The longer someone has done a job and the more successful they have been in that job, the harder it may be for them to change.
In other words, change that threatens someone’s pride, also threatens their identity. Reestablishing an identity or developing a new one is hard.
If jobs disappear within a community, most expect people to move to find work. Studies of immigrants tells us otherwise.
Think about the last time you moved. It was probably a corporate relocation or early in life when a move amounted to transporting a few suitcases across country.
What would happen if you’re displaced from the workforce now? Do you have the means, motivation and courage needed to relocate on your own? Probably not. That’s why people don’t move to find work.
Another issue is that the new jobs available to those who are displaced especially later in life, reportedly pay less and may not provide the same level of meaning.
It’s one of the biggest challenges that many will face in near future as white collar jobs are replaced or augmented by artificial intelligence. Bouncing back will be hard and may not happen at all without the right support.
Righting the Ship
More and more leaders are evidently seeing the challenges ahead if corporations continue to operate with a short term focus of maximizing shareholder value at the expense of other stakeholders.
Change will be hard in part because Americans have been misinformed. Venezuela is not the likely outcome if the country uses taxes, regulations and social programs rather than interest rates and monetary policy to manage the markets. The debate is more about fundamentals versus financial engineering and finding the right balance to better serve all stakeholders.
There are plenty of successful developed countries that are managing the social needs of citizens better than America. We need to look at those countries for ideas and to continue challenging our views of what’s possible.
If leaders are serious about righting the ship, we need to address our dependency on short term gains and make the investments needed to achieve lasting and long term results.