BOWER AND PAINE
consists only of publicly listed companies. How do the eff ects we
discovered diff er among private companies or among public compa-
nies with varying types of ownership structures? Are there metrics
that can help predict when a company is becoming too short- term—
and how do they diff er among industries? Most important, what are
the interventions that will prove most eff ective in shifting organiza-
tions onto a more productive long- term path?
On this last point, we and many others have identifi ed steps that
executives, boards, and institutional investors can take to achieve
a better balance between hitting targets in the short term and
operating with a persistent long- term vision and strategy. These
range from creating investment mandates that reward long- term
value creation, to techniques for “ de- biasing” corporate capital allo-
cation, to rethinking traditional approaches to investor relations and
board composition. We will return to HBR in coming months with
more data and insights into how companies can strengthen their
long- term muscles.
The key message from this research is not only that the rewards
from managing for the long term are enormous; it’s also that, despite
strong countervailing pressures, real change is possible. The proof
lies in a small but signifi cant subset of our long- term outperformers—
14%, to be precise— that didn’t start out in that category. Initially,
these companies scored on the short- term end of our index. But
over the course of the 15-year period we measured, leaders at the
companies in this cohort managed to shift their corporations’ behav-
ior suffi ciently to move into the long- term category. What were the
practical actions these companies took? Exploring that question will
be a major focus for our research in the coming year. For now, the
simple fact of their success is an inspiration.