Tuesday, 19 April 2016

Long-Term Thinking Works

When a business starts, it’s all go-go to win business and generate sales to get the cash in.  Resources are scarce; everyone’s focused on the “now”; there’s little time for thinking beyond the end of the week…

Sound familiar?  If it does, then your business is like hundreds of thousands of others. 

According to The Economist (6th February 2016 Ed.), the Family Business Institute has calculated that only 30% of family businesses survive into the second generation, 12% into the third and 3% into the fourth.  This means that, for most family or small businesses, the chances of surviving beyond the founder’s lifespan are 7-3 against.

Why?  The answer may lie in:
  • Failing to concentrate sufficiently on long-term planning;
  • The “Founder’s Trap”.
Focusing on the first factor, small businesses by their vary nature concentrate mostly on the present (maybe out to the end of the year).  What falls on the table gets done, whilst the rest risks getting put off until it becomes “urgent” in its own turn.  People aren't focusing on the “important”, only the “urgent”.

Developing staff is one of the most vital things one can do to contribute towards business continuity.  The advantages are:
  • Owners have more time for strategic thinking;
  • Owners can concentrate on developing new business whilst staff manage the existing business;
  • Staff can keep things running if the owner(s) are away sick or on business;
  • Staff feel valued and are therefore likely to be more motivated and productive;
  • Staff turnover reduces;
  • Customer service generally improves;
  • The business grows stronger and more profitable.

This takes time, which will be in short supply in the start-up stage.  However, the discipline of doing it benefits the business in the long-run and makes it more “disaster-proof”.

What happens if people feel that the boss is focusing too much on the short-term?  Answer: they’ll search for somewhere that looks like it has a long-term future…


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to offer solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.


  

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posted by William Martin @ 08:27

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