When CEOs are hired, they're expected to deliver results right away. The most common window is 90 days, with a recent Brandpie survey showing that 78% of CEOs felt they had enough time to prove their worth. While delivering short-term wins, they must also plan for the long-term success of their companies. These conflicting tasks make it hard for CEOs to reach their goals.
This trend stems from the uncertainty of the modern market after the financial crisis of 2008. Since then, CEOs have been under pressure to deliver more results at a higher caliber — with less time to do so. Additionally, shareholders don't want to wait long for returns on their investments. That's not to mention the increased competition for investments due to the plethora of startups and other disruptors.
While short-term victories are great, it's important not to let 'short-termism' take over the business. Focusing so much on the present prevents you from properly preparing for the future, which will cause your business to suffer in the long term. Most CEOs have embraced this stance, and our survey indicates that 78% of them are working to create value by improving long-term business sustainability.
The Role of Purpose
In our survey, more than 700 CEOs from Germany, France, the U.K., and the U.S. provided insight into the role that purpose plays in balancing short- and long-term goals. We found that the majority of CEOs have an overarching purpose for their business, but how they implement this vision changes from person to person.
While more organizations are starting to see the value in purpose, 43% still believe its role is limited to marketing and advertising. In reality, purpose can offer CEOs a blueprint for reaching short- and long-term goals throughout their organizations.
Short-term goals for CEOs are all about increasing the bottom line quickly, while long-term goals focus on sustainable growth. Stakeholders often perceive purpose only as a way to deliver long-term results, but CEOs who take enterprising steps to integrate purpose within their organizations will see increased revenue and business growth. That said, it can be difficult to balance appeasing stakeholders by driving revenue with planning for the future of an organization. Thankfully, it's possible to do both.
Finding Your Balance
If you're struggling under the pressure of balancing short-term success with long-term goals, you can find a solution through these three strategies:
1. Define your company's purpose.
To determine what's important for your organization in the short and long term, you should have a purpose that can serve as the foundation and guide for all business decisions. According to our survey, 97% of CEOs believe there is a place for purpose in their businesses, but only 27% think it is the most productive under their direction. In other words, CEOs are unsure of how to define and use purpose.
It's safe to say that all CEOs have an idea of what they hope to accomplish during their tenures, but they may not know how to articulate their specific purposes — to themselves or their stakeholders. Take the time to think through what you want to accomplish as CEO in the short and long term. Write it down so you can reference it later to track your progress and balance any conflicting goals.
2. Share ownership with your team.
The organization’s purpose should reflect the roots of the business as well as its aspirations. Most importantly, you should create it collaboratively with your team to ensure its fully embraced and embedded. It’s not enough for CEOs to simply share the purpose with the rest of the team, though. The entire leadership team must be fully vested in the direction of the organization.If you need convincing on the power of purpose, data from Harvard Business Review states that companies with high levels of purpose outcompete the market by 5% to 7% each year; they also grow faster and retain greater profitability. But the connection between purpose and profitability only occurs when others within an organization — particularly middle managers — take up the cause.
3. Use purpose to guide your organization.
Your purpose should be the North Star for your organization, pointing you in the direction you want to go. A purpose can change how you make decisions across myriad corporate functions, such as supply chain management, distribution, and innovation. It can even alter how you work with business partners — and who your business partners are.
Equally, purpose plays an important role in attracting and retaining talent: Research from Mercer shows that successful workers are three times more likely to work for companies that have a strong sense of purpose. As organizations pull employees from increasingly younger talent pools, having a concrete purpose will be even more important.
When you show that you can give your employees and customers the things they value, your business will grow. This might seem like yet another entry in a long list of impossible tasks, but offering stakeholders unique ways to create value for your business and consumers will show that you’re prioritizing both short- and long-term goals.
It may take some time to find your equilibrium. But once you do, you’ll be able to reach your goals and watch your business thrive.
Originally published on the CEO World website.
Photo by You X Ventures on Unsplash
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