The idea that companies face enormous pressure to deliver short-term results at the expense of long-term health is widespread among executives. McKinsey’s Dominic Barton has made the case, as has BlackRock’s Larry Fink. Politicians like Hillary Clinton and Joe Biden have warned against short-termism, as have scholars at Brookings and the American Enterprise Institute. McKinsey has made its case empirically, finding evidence linking long-term management to superior financial performance. In 2015 Rotman’s Roger Martin reviewed the evidence on both sides here at HBR and explained why he believed short-termism is a problem.
Worries About Short-Termism Are 40 Years Old, but Are They Overblown?
U.S. firms were supposed to lose out to foreign competitors. That mostly hasn’t happened.
August 23, 2017
Summary.
The idea that companies face enormous pressure to deliver short-term results at the expense of long-term health is widespread among executives. But not everyone agrees. In a recent paper, University of Chicago Booth economist Steven Kaplan makes his own case against worries of short-termism. And what makes his argument novel is that it begins by looking to the past.