The High Road or the Low Road

Many Australian managers are very downbeat about the long term survival prospects of their businesses and are concerned about the impact of short term thinking on organisational health. This is the central conclusion of a wide ranging survey conducted by the Australian Institute of Management.

The Institute surveyed 1200 executives (including business owners, middle managers, CEO’s and board members) on issues related to organisational health and survival. The resulting report, entitled Corporate Endurance, finds that:
These findings underline the conflict between long term investment and short term protitability. And with increasing corporate reporting regulations and the strength of media (meaning news spreads fast), bad news about short term results spreads fast and hits hard.

‘Short Termism’ is a topic covered within “Managing for the Long Run” by Danny Miller and Isabelle Le-Bretton Miller. They introduce the ‘Four C’s’, the traits that they have observed in 40 companies that have led national markets for two decades or more.
For those who have read or followed Branson, you will know that his is one of a number of private companies that ditched their public shareholdings and took back ownership in favour of not having to explain long term business decisions to those who don’t get it.

A fuller discussion of AIM’s Corporate Endurance survey can be found here

Danny Miller and Isabelle Le-Bretton Miller book is Managing For The Long Run (Harvard Business School Press, 2005) is based on their experience with 40 companies (most of whom started out as family businesses) that achieved long term market leadership.

An executive summary of the Miller’s research project can be found here