4 Strategy Warning Signs that Short-Term Pressure is Making You Lose the Marathon

Strategy Warning Signs
Are you neglecting worrisome strategy warning signs because you are moving too fast?

Balancing Short- and Long-Term Priorities
Too many leaders become slaves to short-term quarterly targets and neglect to simultaneously focus on the long-term winning strategies.  As one client put it:

“We go on 13-week death marches wearing blinders.  The last week of the quarter is about doing whatever it takes to close deals, ship inventory, and hit targets.”

Performance Pressure is Real
Yes, we understand the performance pressure on CEOs, the SVP of Sales and their teams to meet quarterly targets. Shareholders and Board members alike want to see that the short-term goals they put in place are achieved and are showing progress. They see anything else as a failure to meet ever-increasing expectations.

And so the pressure to perform continues to increase quarter-by-quarter. Even when the targets are reached, the celebration is short-lived. After all, the next quarter-end is only 13 weeks away.

Does it Make Sense to Behave Quarterly?
Many leaders seriously question whether this is a smart way to run a company strategically and culturally.

• Are too many companies and leaders too distracted by short-term pressures?
• Are well-conceived plans for the company’s long-term organizational health and strategic success being sacrificed at the altar of short-term gains?

The Consequences of Missing the Bigger Picture
We maintain that a strategy that lives only in 13-week intervals can miss the bigger picture. To succeed, organizations need to actually implement their full strategy over time, not just in tactical increments.  Based upon our organizational alignment research, we also know that strategic clarity accounts for 31% of the difference between high and low performing organizations.

The highest performing companies keep their eye on the long-term prize while wisely handling short-term pressures from their stakeholders.

Four Strategy Warning Signs
Here are four strategy warning signs that your leadership is too distracted with the short-term and may be missing the bigger picture:

1. Strategic Ambiguity
   The overall strategy cannot be clearly articulated by each and every employee in a way that makes sense to them and their role in making it happen.
2. Closing the Quarter
   Your Board pays more attention to short-term sales results and tactics than key strategies for success.
3. Too Many People
   You are increasing the size of your workforce faster than is warranted by your market position and growth rate.
4. Misaligned Incentives
   Your sales team is incentivized more by commissions on short-term sales than on building long-term and profitable client relationships.

How to Change the Conversation
Do any of those strategy warning signs sound familiar to you? If so, it’s time to change the conversation.

• Strategic Clarity
  See that your strategy is well understood by your entire workforce. It should be easily stated and subscribed to by the rank and file as well as by leadership. The right business strategy should guide decisions and activities throughout the organization so there is alignment on what is moving the company forward.

  Test your strategic clarity now.

• Solid Balance
  Focus both Board and Executive Team meetings on a few key strategies that will promote long-term health and success. Quarterly progress should be reported.

  However, short-term results should not be seen as the absolute measure of success but as a directional indicator of the overall strategy’s progress.

• Growth Rate
  Be careful not to let short-term success drive premature decisions to grow. Keep the big picture in mind so you don’t add too much overhead too quickly or underestimate future staffing needs.
• Rewards & Recognition
  Revamp your sales team compensation program so that it rewards the right behaviors — balance rewarding long-term relationship building and short-term wins to align with your longer-term strategy.

The Bottom Line
Short-term metrics have their place.  They can help monitor progress, provide feedback, and guide decisions.  But they should not conflict with long-term organizational health and strategy execution.  Remember even a triage approach (which is often required during rapid growth) works best when it is aligned with longer-term strategies and plans.

To learn more about the ingredients required to have healthy performance pressure, download New Research – How Much Should a Leader Push to Get Greater Results