Business as usual is not an option
Sarah McGill | Articles
I recently listened in on a seminar given by some senior folk at McKinsey on the topic of ‘Capitalism for the Long Term’. Having spent a bit of time at McKinsey myself, I can vouch for the fact that they are a bunch of smart folk (apparently I slipped in under the radar) but in this case I think they are late to the party. That said… a good deal of other business folk are even later.
My main takeaway from the discussion is that we – business leaders – are in danger of allowing ourselves to slip back into the comfort of “business as usual” after the financial crisis and we need to snap out of it. Confidence levels are on the increase, but that doesn’t mean we’re out of the woods. The fundamental issues that caused the crisis – crazy greed from business leaders and others, extending credit to those who cannot pay, an almost complete failure of governance, etc. – have not been addressed. We need to develop the discipline and patience to focus on long-term value creation, even if that means short-term results are less impressive. I was particularly interested to hear the stat that Asian leaders, on average, think in terms of 10-15 years while we in the West struggle to keep our thinking horizon 5 years out. Dominic Barton (MD of McKinsey… which means he is both scary smart and a pretty savvy operator) suggests that long-term thinking is the competitive advantage of many Asian businesses. Hmmmmm. Makes you think, doesn’t it. Population of China is 1.3B. Population of India is 1.2B. You do the math.
While I was in violent agreement with most of what I heard, I had a bit of deja vue. It took me back to sitting around the dinner table listening to my dad. He was a senior manager and for years drummed into me that the only ball worth keeping your eye on was long-term value creation. Don’t worry about the latest trend. Don’t worry if it isn’t the most exciting or sexy thing to focus on. Create value and do it legally. That’s it. Gee. I would have thought being successful in business would be more complicated than that, but apparently it’s not. But doing it… day after day… year after year… that’s when it gets tricky. How to keep ourselves focused?
By the way, the seminar expanded on the content of the article by the same name that was published in the HBR in March 2011, if you are interested in reading more detail.