THE ERROR AT THE HEART OF CORPORATE LEADERSHIPAnd then everyone— the board, the investors, the lab technicians,
the salespeople— will watch you to see if you’re serious. It will take
a lot of fortitude and determination. It’s not impossible, but it’s
extremely diffi cult.
Originally published in May–June 2017. Reprint R1703B
Finally, Evidence That Managing
for the Long Term Pays Off
by Dominic Barton, James Manyika, and
Sarah Keohane Williamson
Companies deliver superior results when executives manage for
long- term value creation and resist pressure from analysts and
investors to focus excessively on meeting Wall Street’s quarterly
earnings expectations. This has long seemed intuitively true to us.
We’ve seen companies such as Unilever, AT&T, and Amazon succeed
by sticking resolutely to a long- term view. And yet we have not had
the comprehensive data needed to quantify the payoff from manag-
ing for the long term— until now.
New research, led by a team from McKinsey Global Institute in
cooperation with FCLT Global, found that companies that operate
with a true long- term mindset have consistently outperformed their
industry peers since 2001 across almost every fi nancial measure that
matters.
The differences were dramatic. Among the firms we identi-
fied as focused on the long term, average revenue and earnings
growth were 47% and 36% higher, respectively, by 2014, and market