Success is a very subjective word. It has different meanings for different people.
In business however, it usually means sustainable growth and profitability. That is the holy grail of commerce.
But there is a problem. It seems that the sustainable actually isn’t all that sustainable!
Just look at the global economy right now, after so much previous apparent success.
At the very heart of being successful is the desire for it to last as long as possible.
The fuel of commercial success is funding.
We seek funds to start, whether by loans or equity, or by a mix of both. In the same way we seek more funds to grow, innovate, and exploit other markets.
Here’s where the problem starts.
If you are a public listed company the main shareholders are usually big investors, superannuation funds or managed funds of some sort.
If you are a private unlisted company, or a small enterprise, the main investors are usually banks.
The managers of these lenders or equity holders are personally rewarded on their own quarterly results.
They pressure the business entities that they lend to or bought equity in, to deliver quarterly results that enable those fund managers to maximise their personal rewards.
The result is that the market is forced to be short term in its measurement and the businesses are forced to be short term in their actions.
Let me ask you this simple question: Does a marathon champion sprint?
Add to that question this well researched and evidenced reality: Monetary incentives don’t deliver either performance or productivity if the activity requires intellect.
Is there any wonder that we face the challenges of lowered performance and productivity whilst at the same time keeping gross monetary incentives in place for the greedily arrogant and ignorant few?
Can you imagine the fate of a brave board or CEO who proclaims “We are deliberately slowing profit to consolidate, innovate and grow for the longer term”?
How dumb are we?
To be successful in business, to be sustainably growing and profiting, we need to think and act for the longer term.
Do you have the foresight and courage to act accordingly?
