Visionary leaders recognize the importance of investing for the future. They balance short-term results with actions that ensure future success. These leaders realize that a myopic focus on the immediate future will only lead so far. A longer time horizon is needed to achieve more than just immediate gains. 

Thomas Jefferson (Louisiana Purchase), Walter Wriston (Citibank’s Consumer Bank strategy), Vince Lombardi (player development), Maggie Thatcher (privatization of British Petroleum) – to name just four leaders from different eras – all initiated major investments for the future. Imagine the world if these individuals and others like them had chosen to pursue more short-term oriented paths.

Today, however, the trend is to take a shorter and shorter time horizon in decision-making, particularly in more mature industries. At the same time, their impact can be broader than ever. The world is increasingly interconnected. Enormous amounts of data are readily accessible with just a few key strokes. Decisions, once made, are quickly communicated around the globe. These realities strongly suggest that leaders lengthen and broaden their view of the potential ramifications that may occur.

Sub-optimal results
A myopic focus on the here and now is leading to sometimes disastrous results. Investing in contingency planning would have mitigated, if not prevented, many recent business debacles (e.g, the global financial crisis and the BP oil spill).  Despite building its brand by being the quality alternative to US autos, Toyota allowed its quality to deteriorate to achieve short-term results.

Corporate executives are not the only ones guilty of this short-sighted approach. The same reality is present in the public sector. Even though Presidents in the 1960s and 1970s were calling for America to become more energy independent, America did not make the requisite investment. The military misplaced veterans’ remains at Arlington Cemetery, in part, because they did not automate record keeping.

Individuals make the same mistake closer to home. Several years ago, my building’s board voted to ignore the engineer’s recommendation to replace the roof. Two years later, the building spent over $125,000 to repair exterior damage caused by the leading roof (and, of course, replace the roof).

Winners and Losers
As you might expect, pursuing a short-term strategy produces winners and losers.  If you buy stocks for a quick trade, then you are happy to see corporate executives focused only on the results for the next one to two quarters.   

However, if you are a long-term investor, and buy stocks to hold and appreciate, then a short-term approach may come home to haunt you. If you own Toyotas or care about wildlife in the Gulf, you are feeling pain right now. The families of our fallen heroes buried and now missing at Arlington are disturbed. The owners in my building only benefited from the decision to put off the roof replacement if they sold before the exterior damage surfaced.

What is the bottom line? Too often, short-term gain is achieved at the expense of long-term pain. Is this situation what we want to achieve? I do not think so. Many of us exercise and eat right today to improve our chances for a healthy future. The same can be true in other aspects of our personal and professional lives.

What is needed?
Leaders need to recognize the need to invest in the future. They have to create a culture that rewards thinking broadly about opportunities and taking actions that plan for future eventualities. Leaders need to harness the talents of people from different disciplines and skill sets. 

Organizations need people who know how to ask “smart” questions and how to synthesize mounds of data quickly. Managers need to develop people who can assess situations and delineate how to capitalize on opportunities. They have to listen, evaluate divergent points of view, and form a coherent strategy based on this learning. 

Once leaders identify a strategic path, they need to invest the time and effort to “sell” their vision to others. Leaders must build their case and communicate it within and outside their direct line of influence. Richard Nixon and Jimmy Carter grasped the criticality of energy independence, although neither politician gained the support of the American public. 

Conclusion
Given recent events, leaders taking taking longer time horizons than just the next three to six months will find receptive audiences. Doing what you always did will NOT get you what you always got. All of us have to think differently to thrive over the long-term. A short-term horizon only gets you short-term gains. 

Charlotte Nad consults with leaders and senior managers on business and organizational effectiveness.