A Guide for Executives

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Executive Report

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Is your firm stuck in a rut of hasty decision-making, short-term goal setting, and poor future planning?

Driving firm value requires the right mix of short- and long-term actions. Though both are necessary for firms to thrive, most unfortunately place greater emphasis on short-term goals without much consideration for the future.

This guide will help your organization find the right combination of actions and create value now and in the long term, for your company and society.

This report provides:

  • A three-step process for achieving the right balance of short- and long-term actions
  • Case studies showing how other companies balanced between the short and long term
  • Identification of common obstacles to long-term action and ways to overcome them

How Long are Short and Long Term?

Businesses usually define 'long term' as five years and beyond. But industries differ: a mining company or utility builds infrastructure that lasts for decades; for them, five years is short. Other industries have much faster product life cycles.

Why They Matter

Every firm needs short- and long-term actions. Short-term tactics help a firm deal quickly with crisis or rapid change. Because these actions are quick and often low cost, their effect tends to be incremental.

Through long-term actions, firms seek to achieve more significant, even transformational changes that will enable durable success. These investments take longer to pay off, and can be difficult to quantify in advance — but can act as game changers for a firm.

Qualities of Short- and Long-Term Actions (chart)

The Long and Short of It

Most firms emphasize the short term — why?

man running on gears icon Desire for sure returns: We manage what we can measure. Managers discount the value of projected costs and benefits on long-term projects because the future is uncertain.
people with growth arrow Investor pressure: Investors overwhelmingly focus on short-term returns.
financial incentives icon Organizational incentives: In part because of investor pressures, bonuses and job evaluations often push people toward short-term action. Stock options haven’t worked: they encourage future thinking only before their exercise dates.
people with chart icon Human nature: People, including managers, naturally focus on the shorter term. We value the satisfaction of quickly addressing a problem.

“Pressure for short-term results comes from annual performance measures, shareholder expectations, markets, and a company’s public commitments.”  

— Tim Faveri, Tim Hortons, Inc.

Who Should Read the Report?

This report is designed for:

  • Executives trying to advance a sustainability agenda to the C-suite, whose plans may require a larger upfront cost and a more forward-thinking investment, with potentially long-term payoff.
  • Change agents looking to get their organizations on-board with long-term planning when their organizational culture is used to taking short-term actions.
  • Managers who wish to make their organizations more energy efficient, sustainable, and affordable in the long run, but who may lack the tools to implement such a plan, or who may be facing investor pressures to cut costs and increase revenue.

This guide identifies the value of each type of action and draws on leading research from across disciplines to help you:

  • Analyze the needs of your company and its stakeholders.
  • Choose actions that meet those needs.
  • Execute those actions, by making the best business case and building support.

About the Research

This report is an extension of a larger systematic review authored by Dr. David Souder, Dr. Greg Reilly and Rebecca Ranucci, at the University of Connecticut (United States). They scanned 6,000 sources to draw on the best articles, reports and books by academics, industry, government and NGOs. This report addresses one of the top priorities identified by the NBS Canada Leadership Council in 2014.

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Additional Resources

Systematic Review Cover Page Download the full Systematic Review to understand the nuances of the topic and obtain deeper insights into long-term thinking.
Primer Cover Page Share the primer with colleagues to introduce others in your organization or your industry to the topic.
Graphics Icon Use the graphics contained in the report in your next presentation.