The Value of Long-term Thinking in Business
In business, it may seem like a good idea to earn as much money as possible in a short time. Many people think this way because the future is never completely guaranteed. However, people who have run businesses for many years explain that long-term thinking can bring important benefits. These benefits include steady growth, trust and a good reputation, and fewer risks and mistakes. Long-term thinking also helps business leaders make wiser decisions and stay calm during change.
Steady Growth
A business that only wants quick money may do things too fast and not carefully. For example, it may use poor materials or rush production in order to save costs. Soon, customers may hear that the company’s products are not very good, and they will stop buying them. This kind of growth is not stable.
Long-term thinking is different. It means building good systems inside the company and making products the company can truly be proud of. It also means building strong relationships with workers, suppliers, and customers, and treating them fairly. The company may not see large profits at the beginning, but the growth it receives is more stable and can last for many years. As Ashkenas and Moore (2022) write, “visions don’t become reality in straight lines…that’s where experimentation comes in.” In other words, long-term success usually requires patience, learning, and small changes over time.
Building Trust and a Good Reputation
Businesses are part of the community. Just like people, others soon learn whether a company is kind, fair, or selfish. Customers choose to keep buying from a company, or to go somewhere else. When a business keeps its promises, communicates honestly, and treats customers with respect, people want to support it for a long time.
In 2016, the Japanese ice-cream maker Akagi Nyugyo raised the price of its Garigari-kun ice pop from 60 to 70 yen after 25 years. Instead of quietly changing the price, its leaders appeared in a television advertisement, bowed deeply, and apologized for the small price increase. Many customers felt that the company truly cared about them. Even though the price became a little higher, trust became stronger. This shows that long-term thinking is not only about money but also about relationships.
Reducing Risks and Mistakes
Short-term decisions can bring quick money, but they may harm a company later. If the company’s reputation is damaged, earlier profits do not help very much. Long-term thinking means looking ahead, planning for problems, and preparing for change before it happens. Many Japanese companies do this by saving money for difficult times, such as natural disasters or economic crises. Because of this habit, they are able to survive and continue their businesses when conditions are hard.
Ideas for Long-term Leadership
Konosuke Matsushita, founder of the company now known as Panasonic, taught that companies should plan 50, 100, or even 200 years ahead. He believed that companies must always try to improve themselves and look for long-term success, not just quick profit. He also said that businesses should help society, not only make money. Finally, he taught that honesty, discipline, and responsibility, practiced over many years, help companies survive for generations. Japan even has companies that have continued for more than 1,000 years, which shows the power of long-term thinking.
Written by Everett Ofori