20 years written on a paper with a blue pushpin, concept image for business vision or long term prospective. Number two thousand twenty five.

The Short Road to Ignominy

Every day we confront the consequences of actions taken in the past. It may be a slight inconvenience caused by a shopper who left their cart in a parking space, or the expense of burying parents who failed to plan.

We also deal with this issue in our enterprises. Outdated technology plagues our systems , onerous contracts bind us to terrible terms, and mediocre products become albatrosses we must sell to unsuspecting prospects.

Despite our own consternation at being saddled with someone else’s mess, we are often less than careful about what we leave behind. We don’t consider the chain of events that follow from decisions we make right now. In other words, we’re shortsighted.

Although sometimes, it isn’t lack of conscientiousness but pure self-interest that informs us.


When Adam Neumann founded WeWork in 2010 he probably didn’t plan to build a house of cards. But he had a knack for fundraising. The deluge of incoming investments fueled ever grander promises, and Neumann seemed to have no concern about their plausibility.

A few months ago, WeWork restructured its debt, and delayed its date of solvency. The New York Stock Exchange is threatening them with delisting as their stock drops below $1 –again!  It’s an ignominious afterward to the eyebrow-raising growth trajectory.

Between 2012 and 2019 they raised over $1b from a variety of investors—and used it to expand to hundreds of locations and acquire tens of other companies. The investments were huge: $450m, $512m, etc.

In 2019, Amazon and several others invested an additional $517m while Neumann confidentially filed IPO paperwork. In that same time frame, he also liquidated $700m of his own stock. 

Then, Softbank invested $2b. They would ultimately invest much more. But when the dust settled, there was no great exit.

Softbank wrote down $9b of its investment in the company—90% of its total investment. Thousands of people lost their jobs. But Neumann himself seems to have received as much as $2.1 billion.

Looking at WeWork demonstrates one thing that some might doubt. It is entirely possible to build for a valuation without building for actual value.

Legacy Short-Termers

This short-term perspective is not the sole province of start-ups. It’s ubiquitous. The now infamous Deepwater Horizon tragedy exposed the same problems at BP. Their relentless focus on quarterly stock prices led to short-term decision making. Those decisions were not simple strategic errors. They involved deliberately neglecting the long-term for short-term gains.

Undoubtedly, the BP leaders believed that they had the odds on their side. They took significant risks, but those risks affected other people in what seemed a distant future. Their short-term interests prevailed and motivated them to request (and receive) special dispensation from environmental reporting; to perform suboptimal repairs on broken equipment; and to under-test cement foundations.

They did all that and more with full understanding of its implications. The stock price took precedence over the sustainability of either the company, the oceans they occupied or their own employees who were working on those untested cement foundations.

Those choices saved time and money and raised profits and share prices. And all it required was ignoring the increased odds of environmental and human disaster. Why? Because that potential disaster was way off in someone else’s future.

Until it wasn’t.

Startups Swim in Short-Term Waters

VCs work on relatively short timelines. That creates the context for startup strategy. If the investors are preoccupied with the next round, founders will think similarly. And that is the thumping beat in the background: Hit the revenue target by the next board meeting.Build toward a high enough valuation for the next round of funding!

Despite that, most founders work mightily to build real value—not just valuations. And therein lies the paradox.

Most start-up planning horizons are fixed by THE EXIT. That nebulous moment when the initial team and investors get a payday based on the value of their equity. It will be a line of demarcation. On the other side of that line you, the founder, will have left the building.

And, to a large extent, this isn’t a problem if the exit is predicated on value. But for investors, valuations are the same as value. Yet, we know that is not an a priori truth.

Most founders I know want to build something substantial for both the short and long term. But their investors promote the view that valuations represent actual value. But we know that for customers, employees, and other stakeholders –they often diverge.

With all that pressure for hitting the next target, it’s tough to drag your eyes up to the longer view: The world after the exit.

You must keep two different horizons in mind. But they must not conflict.

Ensuring that the short term does not impede the long-term adds a constraint to the strategy. You can’t focus on one set of goals without considering the other. [click to tweet this thought]

As we plan, we project the future through various lenses about the present. SWOT or PESTLE analyses help us see technological, geopolitical or taxation trends and their implications for our goals.

But short strategic horizons obscure questions of longer-term threats and the challenges that will emerge from today’s choices.

Every challenge, problem, or error will be left to a person or team of people to solve. It will not be an abstraction. So, if our strategy has a long shadow of broken pieces, our successors will have to put them back together. If we remain within the organization we will be faced with those consequences –and the accusatory question of what we were thinking!

Of course, strategic errors can also have consequences. But the likes of BP and WeWork aren’t “errors”. Instead, they epitomize a style of strategy that is the organizational equivalent of eating fast food for your entire adulthood and then expecting somebody else to endure diabetes, incapacitation, and heart failure for you.

It Matters. So No Surprise, It’s Hard!

Committing to long-term strategy isn’t pain-free. It forces difficult choices in the short term. For example, paying down technical and organizational debt is the kind of thing that you do when you’re focused on long-term sustainable growth.

But in the short term, it can eat into your runway, slow your roadmap, and use resources that you’d rather spend on splashy product launches.

But letting debt accrue has worse consequences—in the future. It can mean livid customers, crashing servers, security breaches, and much worse. The same is true of organizational debt. Neglecting knowledge management and relying on contractors rather than employees are attractive time and cash-savers. But they have long shadows. If you know that it is you who will deal with the future of those choices, you might see the consequences differently. You might see them as ticking bombs with long and deadly fuses.  

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