The public perception of many businesses is that they prize quick profits over sustainability. Martin Binks, a Professor of Entrepreneurial Development at Nottingham University Business School, explains why more and more companies are accepting that they need to think for both the long and the short term if they are to fulfil their responsibilities to wider society.
Short-termism has earned a bad reputation in recent years, and in many ways this is richly deserved. The global economic crisis offers perhaps the ultimate illustration of what can happen when people don’t give enough thought to the potential consequences of their actions. To quote the well-worn adage: act in haste, repent at leisure.
In truth, short-termism doesn’t always stem from a narrow determination to generate the biggest profits possible. Sometimes it’s perfectly justifiable. Often it’s an essential response to the pressure of ever-shifting conditions, whether they take the form of the financial environment, policies or market circumstances.
Yet the same uncertainty that makes fleet-footedness imperative also demands a much broader sweep of understanding. When change is everywhere, as it is now, a long-term view is necessary to place short-term developments in a clearer perspective. Agility should go hand-in-hand with sustainability.
So how should businesses go about combining flexibility with farsightedness? One key element of the solution is dynamic judgment – the ability to think open-mindedly and loosely when confronting problems. Businesses that sincerely want to move beyond the limited horizons of yesteryear need to reject the lure of knee-jerk conclusions and quick fixes and learn to be creative.
Of course, there’s a widespread belief that such a mindset is found in just a lucky few. Words such as “genius” and “visionary” get bandied about. Yet the reality is that everyone has the capacity to be creative, because everyone has the capacity to have ideas.
That’s why one-dimensional thinking isn’t good enough. Businesses – and in particular their leaders – need to question orthodoxy and look past the supposedly tried and tested. The best way to have great ideas is to have lots of ideas and then work out which to pursue and which to abandon. Consider all the options, not just the two or three that have become routine. Dare to be ingenious.
The bottom line is that times have changed – and businesses need to change with them. Once it was possible to progress by repeatedly reverting to familiar decision-making methods that appeared forever reliable. Now blinkeredness is ill suited to the unpredictability of a business environment that increasingly leaves organisations at the mercy of poor choices.
It’s the ability and the willingness to adopt a genuinely imaginative approach to problem-solving that help us understand the lessons of the past, deal with the challenges of the present and prepare for the threats and opportunities of the future. Encouragingly, more and more businesses are recognising as much.