Build the company of now rather than the company of the future

I keep seeing criticism of companies for thinking short term and failing to act long term. There is a whole industry of consultants, analysts and authors berating us all for failing to think long term and the evils of short-termism.

If they are simply talking about the lack of planning and failure to take advantage of opportunities for company growth, then I have some sympathy, but if all the focus of your energies on is the future then you won’t eat today.

For example, here is a fictionalised example of a conversation between a friend who is the owner of an innovative web based business and his Board.

Board Member 1: “So, how are the plans going for expansion?”

Board Member 2: “Yes, we know how important it is to grow as soon as possible.”

CEO: “I’m not even looking at it for at least two weeks.”

Board Member 1: (now apoplectic) “What do you mean by that? How can we not be looking at the expansion plans?”

Board Member 2: (also apoplectic) “This is ridiculous. We’ve spent a lot of time developing these plans for you. You have to execute them.”

CEO (who is also the Chair): “Have you quite finished. Yes… thank you. The simple reason is that right now we don’t have the money to pay salaries next week. Our clients are paying late. Our single largest client is using the service but has decided not to pay because they don’t think the full feature set is there. We also got served with a Breach of IP notice by a competitor even though we have been in existence for 3 years longer than them and were using the IP in question before they even started. The tax office has asked for a formal audit starting tomorrow because we paid our tax bill one day late….. Now I’m working 90 hour weeks, I am taking care of all this shit, all the risk capital so far has been mine, despite the fact that you guys were brought onto the Board and given shares because of your ability to raise funds…… Got it? ….. So, when I say I won’t be looking at it for 2 weeks it isn’t a sign of weakness or my incompetence, it is a sign that there aren’t enough hours in the day. It is also a sign that we might not even have a fucking company in a few weeks if I don’t focus on today’s problems…… Now, do you have anything constructive to say at all? …No, I thought not.”

The reality of business is that you have limited resources in terms of time, people and money. By definition most of your decisions are short term and based in the present moment. Many advisors come from the privileged position of never having to make decisions with those serious constraints.

The key is to take advantage of the opportunities that come your way. You need to monetise opportunities. Over time you will see the market change and you will see the product/service needs change. The very best companies may see the big picture trends in advance and plan for it.

The world is now highly competitive and globalised. The good old days of planning long term as it existed in the 50’s and 60’s have been absolutely shattered by the reality of modern business. Or as I put it in another opinion piece – think long term, act short term.

The future is competitive, full of short term opportunities and transactions. It is also going to be a lot of fun.