short mid long

New York Times. 2015. From Wall Street to Washington and in the towers of academia, people are buzzing about what some say is the pernicious focus in corporate America on short-term profits.

To understand the debate, it helps to understand the various forces that contribute to the pressures on companies to focus on short-term financial results. Those pressures are not just a product of one bad actor. It turns out that nearly everyone in the investment world plays a role in creating the challenges companies face in setting their sights on the far horizon.

The Atlantic. 2016. There was a time, half a century ago, when what was good for many American corporations tended to also be good for America. Companies invested in their workers and new technologies, and as a result, they prospered and their employees did too.

Now, a growing group of business leaders is worried that companies are too concerned with short-term profits, focused only on making money for shareholders. As a result, they’re not investing in their workers, in research, or in technology—short-term costs that would reduce profits temporarily. And this, the business leaders say, may be creating long-term problems for the nation.

Forbes. 2019. It’s also a rebuke to the epidemic of short-term thinking we’re currently living in. Politicians plan in four-year election cycles. Fashions change with the micro-seasons (there used to be just four).

Corporations measure by quarters. News cycles turn over in days, and Twitter churns constantly. Short-term thinking has become our default; meanwhile, we can’t marshal the focus or resources to tackle some of the world’s most pressing problems — the kind that loom long term, from public debt to technological risk and climate change.

Harvard Business Review. 2015. Thirty years ago, no less a business guru than Peter Drucker weighed in, skewering short-termism in a Wall Street Journal editorial.

“Everyone who has worked with American management can testify that the need to satisfy the pension fund manager’s quest for higher earnings next quarter, together with the panicky fear of the raider, constantly pushes top managements toward decisions they know to be costly, if not suicidal, mistakes,” he wrote.

Aspen Institute. 2015. While the immediate value of reducing these costs is easily seen on the company balance sheet, the lost revenue of reduced worker performance goes uncounted. What’s worse, all of these practices create arms-length relationships between employers and workers, weakening trust and dampening enthusiasm for the work.

This in turn reduces the likelihood that businesses will invest in productivity-enhancing training of the workforce. Recent research bears this out, noting that an “easy hire, easy fire” policy leads to diminished worker productivity and innovation.

Forbes. 2021. Life and work can at times prove to be exceedingly difficult, as the past year plus has shown, and we can all be forgiven if, in our current circumstances, we look not towards the future but the next moment of relief.

All the platitudes about tough times making for tough people are well and good, but they’re easier to offer from the outside rather than during a trying period. Let’s face it, this period of uncertainty is seemingly ever-ending. In these circumstances, it’s easy to see how people can make decisions aimed at the short-term amelioration of their problems that might work against their long-term interests.

Vox. 2016. Hillary Clinton has made short-term thinking in corporate America — also known as “quarterly capitalism,” a reference to the pressure companies feel to meet quarterly earnings predictions — a central issue in her campaign.

That issue has been bubbling beneath the surface of policy discussion for years, but it’s gained fresh attention as influential investors such as Warren Buffett and Lawrence Fink (of BlackRock, the world’s biggest asset holder), and politicians like Vice President Joe Biden, have stepped up to warn of the perils to our economy of turning away from a long-term perspective.