Business is a great balance between short term need and long-term vision. Between resource allocation like time and money and the desire and need for immediate cash flow it’s easy to get drawn into short-term thinking and natural for us to struggle with maintaining a long term perspective. There are a number of significant problems that arise when we get too focused on short-term thinking and these make it incredibly important to keep a long term perspective for the health of ourselves and our businesses.
Let’s explore just a couple of the challenges with short-term thinking and the missed opportunities this can create when we fail to maintain a long-term perspective.
1. Resource Allocation
When we have a limited amount of time, money, and energy it can be extremely difficult to make the best decisions around our resources. Our long-term vision is often at risk due to short-term needs. When we focus too much on the short-term it means we may unintentionally veer away from our long-term objectives. Every small step without the long-term in mind can lead to drastically different results than we anticipate. What happens when we allocate resources purely with the short-term in mind? We end up with a long-term result that is not what we wanted and I’ve never met someone who enjoyed running a business they didn’t want to run!
2. Missed Opportunities
There are serious consequences to having a short-term focus in our decision making. One of the greatest impacts is lost opportunity for innovation and extreme growth. We can look at any number of businesses that failed to keep an eye on the long-term – Toys R’ Us and Blockbuster are just two great examples. In fact, one of the greatest challenges large companies have today is ensuring their continued success for generations…IE keeping their eye on the long term opportunities and innovation!
We need a long-term perspective to remain sustainable, resilient, and forward thinking. If all of our focus is on the short-term it will put us in a position of constant reaction instead of deliberate and intentional action. Maintaining a long-term perspective is essential for the health of our business and our professional careers.
How do you balance short-term and long-term decision making?
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