BK, MN, BB, and I were talking about mergers and how companies are managed afterward. The doomed AOL/Time-Warner combo (and split earlier this year) came up.
This got very quickly into the question of how much forward thinking a CEO should do.
I won’t carry you through the discussion. I’ll leave you with our conclusion: A good CEO looks ahead, but he gives priority to shorter-term goals.
There are two reasons for that:
1. As the bottom-line guy, the CEO’s primary job is to make sure the current year is profitable. That means he must give priority to those projects that will bring in profitable dollars soon, not later.
2. Long-term vision is based on long-term prognosticating, which is never reliable. (Over 70 percent of John Naisbitt’s “Megatrends” predictions were wrong. The Wall Street Journal’s technology predictions between 1958 and 1989 were 80 percent wrong.)
In takeover or turnaround situations, you must have three perspectives:
What the business could be in seven years.
How it will perform two or three years ahead.
What profits it will bring by year’s end.
Look at all three, but make your first priority the shorter-term objectives. If you fail at that, you may not have a chance to work on longer-term solutions. Make the best plans you can and then, every three months or so, stand back for a longer view — but not too long.
———————————————- Highly Recommended —————————————————-
Become an “Ethical Copycat” – There is no need to reinvent the wheel when it comes to advertising copy. As Charlie Byrne explains in the Internet Money Club program, there is a quick — and totally legal — way to “steal” your competitors’ most profitable marketing messages. Read more…
—————————————————————————————————————————
Similar Articles:
- Setting Priorities – In 1970, sociologist Dr. Edward Banfield of Harvard University wrote a book entitled The Unheavenly …
- Is Housing Rebounding? – The April Housing Starts report showed a surprising 8.2 percent increase. This is somewhat encouragi…
- How to Make Measurable Progress Toward Your Most-Neglected Goals – To Master Plan your new life, you must begin with long-term goals that correspond to your core value…
- The 80/20 Rule and Investing – You are probably familiar with the Pareto Principle, also known as the 80/20 Rule. It states that 80…
- Are You Goal Setting… or Still Dreaming? – We all have dreams. We all carry movies in our minds about how life could be for us in a better worl…
- Take Advantage of Stocks That Lost Because of “Guilt by Association” – So far, 2009 is starting off much like 2008 ended: not good for the market. But I remain bullish abo…
- The Rats of Wall Street – Investing in an economic recession: The worst thing you can do in a recession? No, it’s not doing no…