An introduction to balancing short-term business needs with long-term targets
No business can ignore the day-to-day challenges it faces. An urgent IT problem needs sorting, a key customer threatens to take their business elsewhere, problems occur with a supplier – the permutations are almost endless.
Businesses face a continuous balancing act between the urgent need to deal with the here and now and deliver short-term results, and focusing on strategy and working towards long-term goals. The two are often in conflict, leaving business owners and leaders with difficult decisions on what to prioritise and how to get the right balance.
The tendency for business leaders to prioritise day-to-day tasks has been characterised as spending too much time “in the business” rather than “on the business”. A survey by The Alternative Board found that although 73 per cent of business owners said they would prefer to spend more time working “on the business”, on average they spent 68 per cent of their time “in the business” tackling day-to-day tasks.
This guide explains what factors influence leaders’ ability to balance short and long-term needs, shares common mistakes managers make and suggests a number of quick wins you can start implementing straight away.
The next step will be to use our action plan to direct your change and improvement.
What factors influence how you balance short-term needs with long-term targets?
Quality of the workforce
A high quality and skilled workforce will help your company both respond effectively to short-term challenges and hit your long-term targets. Not investing in skills today could save you money in the short term, but could also stop you reaching your long-term goals.
Where companies don’t have enough staff this can mean that business leaders end up doing too many of the routine tasks that should be delegated, and not enough time on planning and implementing the company’s long-term strategy.
The more financially healthy a company is, the better it will be able to allocate the resources it needs to deal with short-term issues. At the same time, strong finances gives a company the confidence to invest for the long-term.
Attitude of owners and investors
Some company owners and investors focus on maximising short-term profits. However, this can come at the cost of long-term growth. For example, a company may decide to cut back on a planned investment in staff or technology due to a short-term dip in sales, but this reactive decision means the business will fail to achieve its long-term goals.
The maturity of the business
New businesses are often forced to focus on the short term because of limited financial resources and the need to establish their product or service. As a company matures, it becomes increasingly important to think about long-term targets, so you can mitigate risks and build a structure that can support continued growth.
“It depends on which stage your business is at in its lifecycle. For example, if you’re in the startup stages, it’s important to get both feet on the ground and avoid running before you can walk. This is where short-term, achievable goals should take precedence and long-term targets should, for now, take a backseat.”
Gary Ashworth, chairman of InterQuest Group
The cold hard facts
Common mistakes when balancing short-term needs with long-term targets
Leaders don’t spend enough time on strategy
Business owners and leaders spend too much time dealing with immediate and urgent tasks, and not enough time on ensuring that the company is on track to meet its long-term goals. To compound this, they don’t delegate routine tasks to others.
Too focused on quick wins
If you are too focused on quick wins or afraid to suffer temporary setbacks, these decisions are likely to come back to bite you in the future.
This is made worse by the tendency for people to be reactive and to respond to the most urgent task rather than the most important, and to those people that shout the loudest.
Your company hasn’t defined its long-term goals
It is virtually impossible to know whether what you are doing in the short term is jeopardising or contributing to the long-term success of the company if your company hasn’t defined its goals. And, even where they have, many companies fail to communicate this effectively to their staff.
Without such a plan a company is rudderless and can be blown from one thing to the next.
“A common business mistake is saying ‘yes’ to any customer that comes your way. It's hard to turn down business and cash in the bank, but when you know deep down that the partnership isn't going to work, it generally ends up creating complications down the line and ultimately being more hassle than it's worth. This kind of approach can also seriously harm your credibility.”
Bridie Gallagher, MD of Glass Digital
The cold hard facts
Quick wins for balancing short-term needs with long-term targets
Book simple check-ins and create accountability
Develop a simple routine for yourself to check-in on the company’s progress against long-term goals. Do a monthly check-in and define metrics to ensure there is accountability. Look for the key indicators and spend time asking what those metrics are telling you, so you can develop the insight you need.
Ensure there is accountability – get a trusted friend or adviser to hold your feet to the fire. This can be done simply, especially in a smaller business.
Make sure stakeholders’ long-term goals are aligned
Making sure that the goals of owners, investors and staff are aligned is vital if everyone is to pull together in the same direction. This means making sure team and individual goals are developed from your long-term targets, and your team is aware of what the overall objectives are and why they exist.
Getting team members to provide input on the company’s vision and targets can help galvanise staff. Knowing what their work is contributing towards gives a sense of purpose too, so make sure you’re communicating objectives effectively.
Monitor day-to-day activities
Regularly ask yourself whether what you’re doing day to day is in line with your plans and contributing to the company’s long-term targets. It can be helpful to assess what you’re spending your time on too.
Always hire with the future in mind
Hiring staff to help you fill a short-term gap is understandable, but it won’t necessarily help your company meet its long-term goals.
“Short-term needs feel more urgent, which in my experience can really prevent businesses from seeing the forest for the trees. To ensure you’re balancing immediate business needs with your long-term goals, book in time with your team every week to discuss how these fit into the broader business ambition. This will not only remind you and your team of the bigger picture, but it will also give you a chance to work out how to prioritise those short-term needs and if indeed they are worth your time and attention.”
Lee McCormack, CEO of MyGlobalHome
The cold hard facts
Now you’ve learnt about the underlying factors that affect how you balance short-term business needs with long-term targets, use our action plan to direct your improvement efforts.