One of the ancient contradictions of management is long term thinking vs short term thinking. Usually during the yearly strategy plan meetings, all managers magically become long term thinkers, at least on the PowerPoint slides. Then comes the quarterly reviews and the only thing they care about is short term results. Budgets are approved based on long term planning. Budgets are cut based on short term focus. How can we be seasonal short term executioner with the soul of a long term planner, both at the same time? Why do all of us admire Warren Buffet’s long term thinking but follow our boss’s short term directions?
More importantly, is there a way out?
In a world where change is the only constant, both embracing traditional long term thinking or completely abandoning it, are both outdated and dangerous. Check out Fast Moving Consumer Goods or Consumer Electronics, where industry standards change every quarter. Check out the competition between TV category and Telecommunications category, who traditionally should not be competitors. Holding a constant long term strategy might be a luxury that the marketers in these category will never have. That’s why the new buzz word in strategy is called “Transient” strategy.
At its core, “Transient” strategy assumes that no single strategy is a source of sustainable competitive advantage because the landscape, the rules and the players keep on changing so fast. Instead, companies need to be agile: shifting strategies as fast as possible, when necessary, and even adapting strategies that are in the process of implementation to the new environment the company finds itself in.
A curious case study in question is Research in Motion. Only 4 years ago they were the giants at smart phones with their ubiquitous Blackberry everywhere. Their long terms strategy was holding on to their competitive advantage on QWERTY based phones, fast e-mail service and unparalleled security. While they went on to make the safest, fastest, most sophisticated phones; the whole industry moved on to the sexy and bling bling Touch screen phones. Beauty became the new standard, eco system and apps the new buzz word. Fast forward 4 years and the long term source of competitive advantage became the source of long and slow death for RIM.
Friedrich Nietzsche probably had something similar in mind when he said “the snake which cannot cast its skin has to die. As well the minds which are prevented from changing their opinions; they cease to be mind.”