I’m sure you are familiar with the concept of Short-termism.
According to the Collins English Dictionary Short-termism (n) means:
The tendency to focus attention on short-term gains, often at the expense of long-term success or stability.
Corporate short-termism has been in the spotlight for more than three decades. To please investors, executives favour the short-term horizon for business results and inflate near-term quarterly earnings. The successful investor Esther Dyson once quipped, “In politics, the dominant time frame is a term of office; in fashion and culture it’s a season; for corporations, it’s a quarter; on the internet minutes; and on the financial markets it is mere milliseconds.”
Corporate short-termism affected the tenure of the Chief Marketing Officer (CMO) over time as well. At its lowest point in the mid-2000s, CMOs were lasting around 24 months on the job before being terminated. Brand building is a long-term investment which many executives choose to ignore, seeking short-term results instead.
In a report from Spencer Stuart, CMOs average had gone up to 44 months in 2018. This was partly attributed to the wider scope CMOs have to oversee, it still remains one of the shortest tenures in the C-Suite. It’s even more volatile in companies that have fewer resources but where marketing remains a core function. Senior partner Greg Welch at Spencer Stuart endorses the findings, “It may look cool and calm on the top but there are turbulent waters underneath, and CMOs continue to remain under siege, and it’s still a difficult job.”
In an October 2015 Harvard Business Review (HBR) article, Yes, Short-Termism Really is a Problem, Roger L. Martin believes there is no doubt, short-termism is bad for businesses. He points to one study of 400 Chief Financial Officers (CFOs) of large US-listed companies. 80% said they would sacrifice long-term economic value for the company to meet quarterly targets. Martins believes the number is closer to 100%, the rest won’t admit to it.
Short-termism is also a threat to global warming, according to a 2015 report in McKinsey. There is no better example of short-termism in action than in the world of politics. The lack of political will by governments to convincingly address global warming can be attributed to a politician’s short-term need for votes. Spending billions of Rands on climate change mitigation that will benefit future generations, is not as impactful as spending billions on tax cuts for current voters.
As humans, we have the unique ability to indulge in ‘theatre of the mind.’
We can conjure up all sorts of scenarios in our minds, of the past and into the future. “It is a tremendously powerful skill,” according to Thomas Suddendorf of the University of Queensland. “We can imagine situations like what we’re going to do tomorrow, next week, where we’re going to have a holiday, what career path to pursue, and we can imagine alternative versions of those. And we can evaluate each of them in terms of their likelihood and desirability.”
So, we can imagine the consequences of our actions, but lack the immediate will and motivation to act in our best interests.
Instant gratification and an always-on society have brought us to the point where consumption can’t wait.
The art of building cathedrals goes back for centuries to medieval times. Stone-masons and architects would draw up plans for cathedrals that would be built over generations. The concept has since been applied in Cathedral Thinking, creating a future beyond your own life.
If we are so bad at looking out for our future selves, how much worse will we be at considering future generations that don’t even exist yet?
Has it become the new normal?
Short-termism is robbing our children, our grandchildren and their children, of a healthy, happy future.
Nelson Henderson said it best:
The true meaning of life is to plant trees, under whose shade you do not expect to sit.
Have an awesome weekend. 😉
Originally published at https://www.leapfirst.co.za on July 24, 2020.