Business strategies in newspapers, magazines, TV shows and books are dissected, analyzed, proselytized and change as often as the latest poll in a US Presidential campaign. Each one offers the next great solution to the dilemma facing a business, but never seems to be the answer after publication of the company’s next financial report. Pressure builds from outside forces solely reflecting on share price, and then change comes again.
My experience as an HR Director and petrochemical business leader has seen different business strategies tried, tweaked and then change again with a shift in senior management. However, with the benefit of hindsight, the successful business strategy taught to me in my early years stressed to look at the horizon, not the next signpost, as the way to conduct business. With the company I worked for, its success was measured by an increase in our asset base, greater community employment, stable dividends and an increase in employee engagement through company share ownership. If you built up your own team’s skill and talents, this too would result in increased share price, profit and business success over the long term.
This reflection was spurred by reading the article “Encouraging your people to take the long view” (September 2012: Toby Gibbs, Suzanne Heywood and Matthew Pettigrew) in the McKinsey Quarterly. It offers the thesis “when people don’t have real targets and incentives to focus on the long term, they don’t. Over time, performance declines because not enough people have the attention, or the capabilities, to sustain and renew it.” Examples were given of companies that have stepped back and instituted metrics to measure long term sustainable targets on their desired corporate culture. For instance, safety performance, employee development etc. It was also stated that compensation practices, in particular executive compensation practices, have had the opposite effect on looking at the long term view related to organization culture and have been used only as a “top-up” measure to their executive plan. The article offers three processes that companies should follow: 1. Root out unhealthy habits; 2. Prioritize the company’s values; and 3. Keep the metrics simple, but meaningful.
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