June 2018 | Reading List
When Sir George Buckley began his tenure as CEO of 3M, he inherited a mess. The company’s sluggish growth had been met with severe layoffs and even more severe cost-cutting. Not only did the short-term tactics fail to achieve their objective, but the workforce was demoralized and new product development and innovation — once the pride of 3M — was nearly nonexistent.
Buckley knew from previous experience that you can’t compete — much less grow — without cutting-edge R&D. But pressure from investors to focus on the short-term meant there was little budget for innovation. Wharton School management professor Michael Useem and three co-authors of the new book Go Long: Why Long-term Thinking is Your Best Short-term Strategy describe how Buckley developed a long-term vision for the company, freeing up capital and nurturing an innovative culture. Before Buckley’s mandatory retirement at 65, 3M sales hit an all-time high, one third of which came from new products.
Korn Ferry vice chair Dennis Carey, McKinsey partner Rodney Zemmel, Fortune contributor Brian Dumaine, and Useem contend that that CEOs like Buckley and four others profiled in Go Long are all too rare. Most are under enormous pressure to focus on next-quarter earnings from institutional and activist investors, and even their own boards and executive teams. The authors call for more chief executives to push back against or even ignore some of that pressure: “it is our belief that they must never sell out the next decade in favor of next week.”
Go Long is a concise guide for those inspired to fight back against “short-termism.” The CEOs and board directors featured share practical advice, and the authors provide an executive summary of each leader’s key insights and actions. They also identify four basic principles that any CEO who wants to adopt a long game can follow.
The authors provide their most compelling selling point for long-term strategy when they describe the real results of short-sighted thinking. Organizations that try to maximize next-quarter profits, they argue, engage in convoluted tax evasion strategies, pay workers below-market wages, and shirk environmental and worker safety obligations — things that are causing young people to lose faith in the broader economy. The examples highlighted in this book, they write, “need to be replicated throughout the system to save the benefits of capitalism while helping to prevent its abuses.” In other words, we need a long-term strategy not just for the bottom line but for Planet Earth.
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