The biggest mistake most businesses make is they don’t maintain a long-term outlook. Instead, many boards, CEOs, and entrepreneurs are focused on the short term. Of course, when trying to keep your head above water, this might seem necessary. Day-to-day tasks take precedence. Long-term outlooks fall by the wayside as shareholders clamor for management to increase growth.
However, time and time again, it’s been proven that—despite pressure to the contrary—long-term success requires long-term planning. From individual stakeholders to company shareholders, long-term planning benefits everybody. Let’s take a closer look at why this is.
Why Your Company Needs a Long-Term Outlook
Sure, it’s all well and good to remain focused on short-term goals. Especially when shareholders are clamoring for quick results. However, research shows the key to delivering positive returns on shareholders’ investments is to keep an eye out for the long-term. Of course, this applies to other stakeholders as well.
In addition to management and shareholders, other stakeholders in your company are your employees and customers. If your employees aren’t happy—even if the company is growing—your organization will suffer in the long run. You won’t be able to retain the best talent. And you certainly won’t be able to attract the best talent. Then, your company could have a disability when it comes to executing future projects.
Also, if you’re driving a wedge between your business and your customers, you’ll lose brand loyalty. Brand loyalty ensures that your revenue remains strong down the line, not just today. You don’t want to raise prices to accommodate short-term growth. By doing this, your customers might choose a less expensive brand of equal or greater quality in the future.
The real problem with focusing solely on short-term growth is your company’s inability to prepare for the future. And if your company isn’t prepared for the future, it can’t succeed. This means any growth you may see in the short term will disappear over the long run. And, of course, this hurts everybody, shareholders included. But there are solutions.
Anticipate the Future with Strategic Planning
As with everything else in life, proper planning can help your business overcome a short-term focus. There are many ways to make sure your business (including both management and employees) remains focused long term. However, experts recommend five main strategies for long-term planning:
- Stay invested in big initiatives containing an element of risk. This will keep the company looking forward and working toward a stronger future.
- Maintain a portfolio of strategic initiatives. In particular, you’ll want these initiatives’ returns to exceed the cost of invested capital. This will benefit employees and shareholders over the long run.
- Always allocate talent to initiatives creating the most value for your business. This ensures that your long-term goals don’t come at the expense of overall ROI.
- As mentioned above, you always want to generate value for all your stakeholders. Not just shareholders.
- Do your best not to act solely to boost profits in the short term. Keep a long-term mindset. And remember, loyal customers and employees, are every business’s strongest asset.
If you follow these five primary strategies, you should be able to maintain a focus on your company’s long-term goals. And you won’t be sacrificing growth for short-term gains.
Of course, there are ways to ensure your strategies are working. One of these is with the help of management consulting from a firm like StellaPop.
We want to help you make sure your company is getting all it can with top managerial practices. That’s why we offer services to help drive success. These include recruiting for leadership and teams as well as process management. If you’re having trouble maintaining a long-term focus for your business, we’d be happy to assist.