THE LONG-TERM MIND-SET IN TIMES OF SHORT-TERM HYSTERIA - CHANGE THROUGH PROGRESS AS TRUE LONG-TERM VALUE CREATION
In February the Financial Times published an article intriguingly entitled ‘Top US financial groups hold secret summits on long-termism’. The odd thing is the secrecy of these summits. Covert summits may be part and parcel of Dan Brown novels and Cold War history books, but why are they being convened in these transparent times? These bankers are not conspiring to create a new world order, so why are they giving the appearance of doing exactly that?
Introduction: a secret society of long-term thinkers
None of the participants of the summit were willing to comment on the initiative. What we do know is that its goal was to promote long-term thinking in the business community. What would explain such secrecy around a call for long-term thinking? The answer would seem to be that we live in a society in which short-term thinking is so deeply ingrained that long-term thinkers have to form a secret society.
What do we actually know about this secret summit? The participants were the big beasts of the asset management world, including Warren Buffett (Berkshire Hathaway), Jamie Dimon (JPMorgan Chase), Abby Johnson (Fidelity), Larry Fink (BlackRock), Tim Armour (Capital Group), Mark Wiseman (Canada Pension Plan Investment Board) and Jeff Ubben (ValueAct).
The FT reported that their first meeting was held in August 2015, and their initiative is expected to come to fruition sometime in 2016. The asset managers are said to be working on ‘a statement of best practice on corporate governance’ which aims to convince business leaders around the world to follow a longer-term strategy.
A list of best practices would certainly be an inspiring starting point, but is not in itself sufficient to really explain the root cause of this fixation on short-termism. The business community needs a deeper understanding of contemporary sociocultural developments and how human behaviour has changed in the past few decades.
This paper has three parts. Part one examines current business culture, with its obsessive focus on the short term. Then part two delves into the underlying sociocultural and psychological forces at work. Finally, part three looks at how leaders can embrace a long-term strategic thinking.
Link to Part 1