VOICES: NICK BARTER
VOICES: NICK BARTER
The future generation can provide insight into how to guide the organization towards long-term value.
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As CEOs focus on short-term pressures, they risk undermining long-term resilience and loyalty, crucial for future generations' success. Future generations and the risk of not thinking long-term
Nick Barter
CEO & Founder Future Normal and Professor in Strategy & Sustainability Griffith Universtity
T he 2024 CEO survey highlighted that future generations are the least considered stakeholder, and employees and customers the most. Relative to the 2023 results, CEOs appear to be subsumed by shorter-term concerns. This result is not surprising, given the current noisiness of the world (presidential elections, climate change, AI, inflation, supply pressures, and more). This noisiness is now, and we live in the short-term, the day to day—reacting to the needs of the hour, the day, the month, or the quarter is always going to have high importance because it’s there in front of us right now, and it's demanding we act. Furthermore, the link between our current action and the short-term outcome is clear; it's direct. If we cut costs now and tighten up spending plans, it impacts the bottom-line now. Hence, our short-term acts can provide us with a sense of satisfaction, a sense of having dealt with the urgency, a sense of work well done because there is no delay on the results. We are still afloat. In contrast, the long-term lacks urgency, reinforced through short-term incentive plans and CEO tenures
that can average five years. If we cut investment now, the short-term result is immediate and guaranteed, whereas one can never really be sure about the long- term benefit of an investment. Importantly, that long- term benefit is likely outside of any one individual’s tenure in the company. Yet it is through the long-term that organizations build lasting value, as focusing on the long-term purpose of the organization and leaning into it builds customer and employee loyalty, loyalties that benefit multipliers, boosting top and bottom lines across years. However, these same loyalties that provide so much can be eroded by reactions to short-term pressures. Loyalty is hard won and easily lost. THINKING LONG-TERM TO BUILD RESILIENCE The benefit of a long-term perspective is that it reframes our role. It makes one consider how we are only temporary stewards and we only have our role for a time, before we are moved on and invariably replaced by those who are younger and have new ideas—the future generation. If one considers
a generation as 30 years, it is those who are 30 years younger; hence it’s an organization’s younger employees and younger customers. These are the individuals that can provide insight into how to guide the organization towards long-term value and tackle short-term pressures without erosion. This type of organization is more resilient because it is one whose customers and employees stay loyal through time. The ground-zero for a resilient business is one that has enduring cashflows that are facilitated by loyalty; attenuated through listening to those who come after. Hence, one should only focus on the short-term within the context of understanding the long-term, and the long-term can only be understood by considering future generations. They will age, as will you, and they will replace you, as you replaced others. To not listen to them is to inject risk into an organization and undermine its resilience by tipping it towards short-term reactions rather than short-term responses that are congruent with long- term values. Hence, a key question for any leader to consider: Is your business perpetuating a world the next generation want to live in?
Nick is Professor of Strategy and Sustainability at Griffith Business School in Brisbane. Completing his doctorate at the University of St Andrews, his career has spanned industry and academia. Strategy consulting with EY, to leading the Griffith MBA, to advising organisations on moving past myopic approaches.
nick-barter-a50775 futurenormal.net
42 Brandpie CEO Report 2024 A pivotal moment for purpose
Brandpie CEO Report 2024 A pivotal moment for purpose 43
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