Business strategy: the risks of focusing only on short-term gains
Organisations need leaders who think strategically and with a long-term vision.
Think for a moment about a century-old company such as Ford. Do you think this automobile giant will stay in business for another hundred years? Will it be able to survive just by launching new car models? Surely not...
Today's mobility revolution goes beyond electrically powered engines; it will surely bring about changes in how we use vehicles in our daily lives. The self-driving car is on the verge of becoming a reality. In this context, what should a company like Ford do?
The ability to think long-term does not make it easy to implement the changes that the future requires. In today's world, a business strategy that involves building commitments – which traditionally strengthened an organisation's competitive advantage – can lead to strategic rigidities.
For companies unprepared to recognise this fact and react in a timely manner, the consequences can be fatal.
Think about companies such as Netflix and Kodak. Think about how the banking industry's value-creation model has changed. Think about your own business. Are you prepared to develop this sort of long-term vision?
Organisations need leaders with a long-term vision
3 tips for developing strategic thinking
Organisations need leaders who think strategically and with a long-term vision. This isn't easy, because strategic thinking requires knowledge of techniques and tools as well as the development of the right mindset.
Tools alone are insufficient, but certain practices can give executives an edge. Here are three tips on how to develop strategic thinking:
1. Time for reflection
Strategic thinking requires time for reflection. The daily demands of the job pose a difficult challenge to executives who want to think strategically in the long term.
To develop their strategic capacity, leaders – both alone and in groups – must set aside time outside their day-to-day activities to think about and discuss their organisations' long-term priorities.
2. Information is key
Leaders who want to think strategically must be informed about emerging trends and their future implications. It's like playing chess. Professional players always think and plan several moves in advance.
3. Long-term culture
Strategic thinking also requires a company culture that rewards and encourages people to think about the long term. This means helping employees stay up-to-date in their areas of expertise by providing learning opportunities and venues for discussion.
This article is based on knowledge insights published in Harvard Deusto.