Monday, May 14, 2012
Think about the short term but focus on the long term
I have always been annoyed by something in the world of business. It's not a new problem. In fact, I'm not even sure how many people even realize it is a problem. However, it is something that should be looked at more and something should be done about it.
There is just way too much focus on company quarterly earnings reports.
I suspect that a lot of this is being driven by the 24/7 media cycle we find ourselves in these days. The media talking heads that are on all of the tv networks, business websites or bloggers such as myself need stuff to write and talk about. It is easy to talk about companies quarterly earnings because it gives great talking points about where the business currently stands, and provides contrast against prior quarters.
Add all of this to 'meeting analysis' expectations' and it becomes easy to see how companies can shift focus to maintaining the good news every quarter - and maintaining a good stock price. When those expectations become too much, companies can turn to various shady practices to keep the good times rolling, but they will inevitably get caught.
That is why I believe companies should continually maintain focus on their long term plans, strategies and growth. Yes, short term thinking is obviously needed, but don't let it overtake focusing on the long term.
However, companies must maintain their focus on the long term. By doing so, short term plans will take care of themselves. Yes, there will be quarters of disappointing news, but it happens to all companies. Don't lose sleep over that and keep looking forward!