Moving Beyond Crisis Mode: Successful Corporations Merge Short-Term Goals, Long-Term Strategy, Expert Says

In a corporate world that is obsessed with immediate results, there is still plenty of need for long-term, strategic thinking, said David Souder, a management professor and the academic director of UConn’s Executive MBA program.

In a lively presentation, which touched on everything from light bulbs to major league baseball, Souder told 40 business executives that a progressive company must always strive for a balance between short-term goals and long-term strategy. Souder outlined four steps to bringing long-term goals into focus.

His presentation Tuesday at the Graduate Business Learning Center in downtown Hartford was the first in a series of breakfast programs for executives. The next program, on March 25, will address “Demystifying Big Data.’’

In our everyday lives, Souder said, people effortlessly balance short- and long-term goals. Anyone who is saving for a child’s college education or mapping out an exercise plan to optimize good health, is investing in the long-term.

Businesses, particularly in times of crisis and rapid change, employ short-term thinking in order to survive. Too often, companies remain in perpetual crisis mode that keeps them from acting in ways that will help them prosper long-term, he said.

Souder is the lead author of a report titled “Long-Term Thinking in a Short-Term World,’’ which will be published by the Network for Business Sustainability this week. After researching some 6,000 articles, Souder found that corporate analysts agree we live in a world where the focus is on the short-term.

“Everyone acknowledged that there’s a problem, but I wanted to go beyond that and think about what managers can do to evoke more long-term thinking,’’ he said.

“The first step is to acknowledge that short-term gains are important too,’’ he said. “And companies that are succeeding now are more likely to make long-term investments. The crux of the problem is that we need to think about both.’’

Souder outlined a four-step process to bring about a committed, long-term strategy.

First, he said, set long-term priorities with all stakeholders in mind. Include everyone from investors to customers, suppliers to employees, and the community in the strategic plan. Souder went on to say there are three kinds of companies: vulnerable, competitive and thriving. The key is to invest in areas that will reduce a company’s vulnerability. Those are the long-term investments that are most crucial, he said.

The next step is to be honest about the reasons for the gaps in priorities, Souder said. Are there patterns of decisions that are getting the company in trouble? Are key decision makers giving in to many short-term issues? Is the company truly thriving—or just pretending it is?

Another key step toward long-term strategy is to develop cultural norms for the organization. Clear, consistent communication and training are essential, he said, as is learning from prior mistakes. When discussing this aspect of corporate growth, Souder said different corporations can take vastly different approaches to achieving the same result. For instance, in Major League Baseball, the New York Yankees’ management is known for its willingness to trade new talent for veteran players, and to spend generously to get the players they want. Meanwhile, the Tampa Bay Rays’ management is more inclined to trade star players for up-and-coming athletes, who have lower salaries, and is known for a more restrained spending limit.

“Both of these teams are thinking about the long-term in their own way,’’ he said.

That advice resonated with Susan Baroni-Schaeffer, the corporate development manager for the Channel 3 Kids Camp. “I’m looking forward to giving more thought to the long-term and what needs to get done,” she said. “I liked David’s view that there is no one ‘right answer’ that works for all organizations.”

Souder’s final recommendation is to choose to act based on long-term thinking. “Talk is cheap. Actions reveal your commitment,” Souder said. “Don’t wait to follow others. Take advantage of good deals.”

One example, he said, is home solar panels. When told that it would save them money, homeowners initially were skeptical. Now large companies are offering incentives and garnering most of the profits, he said. “There are a lot of examples where people said, ‘This sounds like a great idea. Why isn’t anyone doing it?'”

The presentation was well-received by those in attendance.

“I came here to discover how to be less tactical and more strategic,” said Sue Harris, a program and recruitment coordinator for the GraduateCT program of the Metro Hartford Alliance. “The program planted the seeds to help me reach long-term goals.”

Sandi Perillo, director of data administration at The Hartford, said she liked the approach of merging short- and long-term goals. She has new ideas for balancing immediate projects, while strategizing ways to incorporate big data into longer-term projects.

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