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My undergraduate and graduate students may find this an interesting topic for discussion and debate.

Reading this week’s Economist, I literally “stumbled upon”, not the Web app, an editorial on the resurgence of long term corporate strategy.  Translated succinctly, long term corporate strategy means simply that quarterly performance and shareholder dividends take a back seat to longer term corporate goals.  The Economist opinion piece sensibly admits that the singular focus on short term profits has led to cynical and perverse manipulation of income statements, via warped compensation plans based on share price and so on.  Global accounting practices like the “double Irish” and the “Dutch sandwich” can probably be partially attributed to this kind of thinking.  Wall Street is awash in “short-termism” as the Economist points out.  The deluge of early corporate dividends this month, in anticipation of the “fiscal cliff,”  are also probably related.

I carried on to read that management guru Peter Drucker was quoted as saying that “long-term results cannot be achieved by piling short-term results on short-term results.”   Roger Martin, the Dean of the Rotman School of Management in Toronto has called short-termism “a crummy principle that is undermining American capitalism.”  Whew!  That is pretty strong stuff.

But the “piece de resistance'” for me was learning more about Paul Polman, the CEO of Unilever.  I have my favorites in management, and they are exclusively bold leaders and mavericks:  Ted Turner (founder of CNN and America’s Cup sailor), Larry Ellison of Oracle, and Richard Branson, among others.  Gordon Moore is another bold leader, who was ahead of his time, as the visionary leader of Intel, driving the continual SLRP (strategic long-range planning) process that involved us all.  I have added Paul Polman to my list of management guru’s.  Polman is one of those corporate leaders who has risen above the battle to see the layout of the entire battlefield, and is ordering a charge toward long-term corporate thinking.  Polman is one of those people who is showing us the way out of our current mess.  I can attest from personal experience that managing long-term strategy and execution is way more fun than answering to the accounting department.

The more I think about this issue, the more compelling it seems to me.  John Chambers, CEO of Cisco Systems, when asked recently about “shareholder value,” declared his obligatory allegiance to it, but in the same breath cautioned about the rapid acceleration in the corporate life-cycle and the need for constant innovation and re-invention. Starbucks CEO, Howard Shultz, in describing his company’s long standing goal of corporate social responsibility, bridles a bit at his need to produce quarterly results at the expense of the goals.

I am also sensing a connection to our infatuation with and “celebratizing” entrepreneurship.  Some seem to feel that the right strategy is to foster the development of new Mark Zuckerberg‘s. Really?  Is that it?  Max Marmer, my outspoken favorite, CEO of Startup Genome, wrote on the Harvard Business Review blog about the “Danger of Celebratizing Entrepreneurship”   He and others technology luminaries have also spoken out on the lack of Big Ideas in entrepreneurship.  All of these threads seem tied together in a ball of short term greed, as Polman describes it.

The dilemma is that you cannot be all things to all people. It is my fervent hope that Paul Polman, Roger Martin, and Max Marmer will all help us find a middle ground that restores long term corporate vision and dramatically improves our performance in innovation by resurrecting the Big Ideas.

Post Author: David Mayes

Founder, Mayo615 Technology Partners Ltd., UBC adjunct faculty, Intel alumnus, technology assessment, international business, cleantech, fly fisherman, native Californian and citizen of France, who has been very fortunate to have traveled, lived and worked all over the globe. My wonderful wife, Isabelle has reintroduced me to my French Provençal heritage.

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