Written by Abe Maingi, Senior Analyst, Kineticos
Balancing short-term priorities with long-term thinking is one of the most critical tradeoffs that executives make on a daily basis.
Jeff Bezos, Amazon’s CEO, is one of the biggest proponents of long-term thinking, even spending $42 million of his personal money on The Clock of the Long Now, a proposed mechanical clock designed to keep time for 10,000 years.
One of Bezos’s key messages has been the value of being long-term oriented. He noted in an interview with the Harvard Business Review, “If you’re long-term oriented, customer interests and shareholder interests are aligned. In the short-term, that’s not always correct.”
True to that comment, Amazon’s stock price has been historically bumpy, periodically missing their projections and disappointing Wall Street at times. They’ve also had notorious failures, most recently the Amazon Fire Phone.
However, according to Bloomberg, Amazon has passed WalMart as the most valuable retailer by market cap and now sits as the 4th most valuable public company.
Sam Hinkie, former General Manager of the NBA’s Philadelphia 76ers, gives us another example of this balancing act. He has historically talked about having the “longest view in the room” and his actions over the past few years certainly reflected that mindset. Hinkie took risks on highly talented players (Nerlens Noel, Dario Saric and Joel Embiid) knowing they would not be able to contribute to the organization immediately, but in hopes that their talent would persevere and they would become stars.
As expected, from 2013 to early 2016, with many of his key draft picks unable to play, the 76ers won mere 47 combined games. In this particular case, Hinkie’s focus on the long-term came at the expense of the short-term, which ultimately played a role in him stepping down from his job. Unfortunately for Hinkie, there is a much stronger focus on short-term success in the professional sports world than with the Bezos example. It’s especially unfortunate (for Hinkie, not the 76ers) because his questionable decisions are beginning to bear fruit and the organization is in a much better place now because of the risks he took. While he no longer has his job, I suppose he can now play the “I told you so” card.
One of the most critical tradeoffs an executive must face is short-term versus the long-term. As Jim Collins noted in his best selling book Built to Last, “the challenge is to build for the long term while doing well today.”
If you would like to receive emails containing insights on life sciences topics relevant to you, please subscribe
Abe Maingi, Senior Analyst, is responsible for the delivery of customized solutions to clients across the life science ecosystem. Mr. Maingi’s analytical mindset and problem solving skills help him execute on client engagements ranging from market research, strategy, and operational excellence.