In a recent op-ed for the Globe and Mail, Johnston Centre Director David Beatty argues that a sustained strategic focus on the long-term will be critical to ensuring that companies emerge from the COVID-19 tragedy with a distinct competitive advantage. Perhaps, the single most important question directors should ask themselves now is: ‘How long is our real strategic time horizon?’
Beatty points out that companies tend to vary quite significantly on where they fall on the ‘strategic time spectrum’ with some widely-held public companies, for example, operating within a limited, ‘Wall-street response’, three-month timeframe. At the other end of the spectrum, companies such as Geotab, an Ontario-based fleet management service company, take a much more long-term view through prioritizing the welfare of their management team, recruiting exceptional talent, and supporting partners within the wider ecosystem in which the company operates.
Beatty argues that sustaining the competitive advantage of a company over the long haul requires adherence to a fundamental ethical proposition – ‘Do unto others as you would be done by.’ Companies that have weathered tragedies such as the 9/11 attacks have done so by making decisions on the basis of the principle that ‘people come first’.
So what can companies do to ensure that they stay laser-focused on the long-term? Beatty suggests some strategies that can help:
1. Conduct a one-day meeting to define what a ‘long-term’ horizon means in practice
2. Have the right people in place – the board should have directors with relevant experience in different industries, the C-suite should have operational excellence and finally all dogmatic ‘i-bankers’ who spout the virtues of shareholder primacy to the exclusion of all else should be summarily dismissed
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