That's Management!

Jack Welch has a great column in Business Week about the balance between managing for short and long term results. The question was "Since there is such a bias in the markets for short-term results, how can you prepare for the long term?"

The answer: "In a word, that's management!"

He uses examples from a couple of key areas to show that this balancing act between short and long term results is what good management is all about.

• managing people where training, stretch assignments and encouragement to take risks are all investments in the future
• allocating R&D funds between improvements to current products and new projects that may produce results in a couple of years
• and investment in marketing
  

Bottom line, you make dozens of decisions a day, but this question is grand daddy of them all, "As a manager, you'll spend your career answering it".  I'd just add "As a manager, or an entrepreur, you'll...

This column hits home for me -- we've averaged about 25% percent growth for many years, but as a company gets larger it becomes harder to sustain the same growth rate.  So, over time, the balance between short and long term results really becomes progressively more important.

And, it really is the challenge that creates the most anguish.  We've been planning some major new projects for over a year and have invested heavily in them with people, marketing and R&D.  These projects have the potential to push our growth rate up over 30% (where it really belongs) and keep it there for many years.  But right now we just have expenses and more suspense!

Which reminds me:

I like business because it is competitive, because it rewards deeds rather than words. I like business because it compels earnestness and does not permit me to neglect today's task while thinking about tomorrow. I like business because it undertakes to please, not reform; because it is honestly selfish, thereby avoiding hypocrisy and sentimentality. I like business because it promptly penalizes mistakes, shiftlessness and inefficiency, while rewarding well those who give it the best they have in them. Lastly, I like business because each day is a fresh adventure.

-R. H. Cabell