The Business Book

190

YOU CAN’T GROW

LONG-TERM IF

YOU CAN’T EAT

SHORT-TERM

BALANCING LONG- VERSUS SHORT-TERMISM

A

successful business has to

balance two different time

horizons: short-term and

long-term. In the short term, a

company needs cash to pay its wages

and bills. But if it focuses too much on

the immedate present, it risks

missing opportunities. Conversely, if

a company’s sole focus is on new

prospects, it will soon become

unprofitable. As Jack Welch, CEO of

GE, said: “You can’t grow long-term

if you can’t eat short-term. Anybody

can manage short. Anybody can

manage long. Balancing those two

things is what management is.”

IN CONTEXT

FOCUS

Managing objectives

KEY DATES

1938 US author F. Scott

Fitzgerald writes that

“intelligence is the ability

to hold two opposed ideas in

the mind at the same time,

and still retain the ability

to function.”

1994 US business experts

James Collins and Jerry

Porras publish Built To

Last: Successful Habits of

Visionary Companies.

2009 In The Opposable Mind,

Canadian business professor

Roger Martin claims that

great business leaders are able

to use “integrative thinking” to

creatively resolve the tension

in opposing ideas and models.

If a company only

thinks short-term...

...about immediate issues

with customers, wages,

suppliers, and staff...

...about new products,

new markets, innovation,

and growth...

...it becomes outdated

and creates no new

opportunities for growth.

If a company only

thinks long-term...

...it runs out of capital

to fund investment.

Successful companies

have to balance short-term

and long-term thinking.