The everlasting business dilemma: long-term vs short-term orientation 

I’ll start by saying that this result surprised me big time! I could have bet that Romanians scored high on short-term orientation. I was assuming this is based on the learnings from my previous article stating that we are not that great at managing uncertainty, as a nation. We like things to be certain, while the future – and mostly the long-term future – is probably one of the most uncertain things in life.  

But life is also full of surprises and here is one: we score 52 on long term orientation scale, where 0 is total short term and 100 is total long-term. This score makes us quite balanced.  

A long-term oriented culture is characterized by values that are pragmatic and future oriented, like persistence, adaptability and the desire for rewards. Members of such cultures respect traditions and social obligations, willingly sacrificing current benefits for higher future gains. People representative of short-term oriented cultures are looking less towards the future, focusing more on the past and the present. They show very high interest into gaining immediate benefits with very limited desire to sacrifice any current benefit for a future (and, therefore, uncertain) gain.  

Behavior #1:  within short-term oriented companies, targets are very ambitious and people want to achieve as much as possible with minimum effort. The ability to plan is limited, but this is compensated by an opportunistic approach and a fast reaction to close the opportunities in the marketplace. Not being future oriented, there is a low interest in anticipating trends, and the management rather relies on past successes that tries to replicate.  

How to deal with this behavior: spotting opportunities and win them quickly to achieve ambitious targets is not wrong, on the contrary, it is something that most of us want to accomplish. What you may want to also consider in this situation is not to jeopardize long-term sustainability of your business because of too much opportunism. This may lead, in time, to the dilution of your brand reputation and to diminished value that you bring to the market.  

To be sustainable, a company needs to make a difference in the marketplace. On the long term.  You can start by asking yourself what is the difference you want to make, as a business? What is it that you want to achieve in x number of years? Clearly express this as your aspiration for the future. Even more, this should guide your team when making decisions, without compromising too much the opportunistic state of mind that made your company successful in the first place.  

Behavior #2: I believe that long-term orientation in Romanian commercial companies generally conclude into un-diligent business planning, as the environment is very fluid and you simply cannot plan thoroughly enough. On the other hand, I believe that long-term orientation is an escape from the short-term execution where you are forced to be active, engaged and decisive. Even if for some it is far easier to be hopeful and believe in the best future scenario, I’ve seen many teams that took this approach without any objective data to back them up this, only to be disappointed when proven wrong.  

Takeaway: don’t take for granted the long-term plans. Ask questions, try to understand the details, the assumptions that were used, by whom, who takes responsibility and for what. Only after understanding the details, you will be able to evaluate the feasibility of the plan. Leave room for future changes, but also try to focus the team on taking control of the execution, by showing people what are the elements that could be controlled. This is a discussion that is better ran in a coaching manner, as many of us try to avoid clear responsibilities because of fear of failure and need to be helped to deeply change our mindset.  

Behavior 3: company vision and mission are clearly stated. 3-5 years aspirations that are translated into numbers, people who know that they are not written in stone and can change as market changes, but they still play the role of good guidance for short-term execution. Stock options or success plans for key people. Short-term realistic, but ambitious business plans. Motivating rewards for the employees to achieve targets, which leads to having them constantly focused on exploiting the opportunities in the market.  

What to do in this situation? Don’t change anything! This is the right balance of short vs long term focus. Priceless!  

Reference: “The Psychology of the Romanian People”, by Prof Daniel David