Shorting the organization

There’s a conflict between the perceived timeframes in which managers work and the timeframes in which organizations work.

While senior executives and middle managers believe that organizations make decisions primarily for the short term, they say they personally work more for the long term.

In a survey of several hundred business executives worldwide by my company, NFI Research, only 5 percent of respondents said that organizations make management decisions on a long-term basis, while the majority of these same executives and managers see themselves as making management decisions on a medium-term basis.

If managers see themselves as managing for a longer time frame than the rest of their organization, they run the risk of not being able to meet others’ expectations, including those of top management and shareholders. Also, when managers focus on a different time frame from their organization, it can cause a disconnect, preventing the organization from running at optimum level.

And when managers perceive a difference in focus between themselves and their organizations, it can become a self-fulfilling prophecy, as managers become dissatisfied and impede progress.

Difference in Focus

Whether or not they recognize or acknowledge it, managers are increasingly being forced by daily and quarterly events in the business to focus on the short term. Top management is demanding more from managers and employees in less time. The managers and employees don’t necessarily feel good about it. For many managers, it is a source of frustration. No matter the viewpoint, there is widespread agreement that short is getting shorter, and long-term is really not that far off anymore.

Because they may be better positioned to see short-term moves as pieces of a larger puzzle, senior executives sometimes have an advantage over managers in seeing the context of long-term strategy. Executives tend to see the environmental forces driving the need to make short-term plans — the shareholders, the global environment and the capital markets. By contrast, lower-level managers and employees may see only what looks like an arbitrary directive from the top, and follow their own plans for succeeding in the business, based on their contact with customers or their personal desires.

Many managers and employees feel that they work all day just “putting out fires” and that they “don’t get any actual work done.” In fact, “putting out the fires” can be a major benefit to the organization. It may not move the individual manager forward in his or her mind, but it may move the organization as a whole forward. It’s easy to forget that even if it doesn’t feel productive personally, a doused fire that allows a subordinate to become productive again or helps colleagues tackle their work can benefit the organization as much as a task that helps the individual achieve his or her personal targets and goals.

Working for the Short Term

However, putting out fires is probably not in the job description. For companies to expect employees and managers to think and act in a shorter term, they must compensate them for doing so. Self-interest has to be aligned with corporate strategy, and compensation is one way to do that.

Businesspeople today are working harder than ever. Many have been tasked with extra duties after colleagues have been downsized, as “jobs” go away but “work” remains. Many of those who have assumed extra duties and tasks have done so either willingly or begrudgingly. Many are acting in what they believe is the best interest of the business, even though not noticed or not appropriately appreciated.

Top managers who do not acknowledge — and compensate — those individuals might find that they have a short-term employee who, when economic conditions improve, will migrate to an organization that appreciates what they do.