The short-term perspective views the world as a finite game, contained, and with limited players and clear rules. According to Simon Sinek, recent years have seen a pronounced shift toward short-term thinking. He characterizes it as a rental mindset: there's less of a sense of ownership, and businesses are built to be sold rather than to be sustainable. It's a rental mindset: businesses are built to be sold, not sustained.
Short-termism may be at least partially attributed to changing attitudes towards the role of businesses in society from being for the good of the society toward the Friedman doctrine, which suggests that a business's first commitment is to its shareholders.
A lack of consideration for the long-term effects of pursuing short-term metrics can be dangerous; it can lead to prioritizing the wrong things. For instance, as Sunil Gupta points out, digital transformation often means accepting a short-term hit in the service of a longer-term play.
Erika Hall argues that designers have an ethical responsibility to consider the second-order implications of their work on the customer as well as on the business.
Real change requires delayed gratification. Many things that are the most valuable in the long term require that we endure short-term pain. This is generally true for individuals as well as organizations: we have difficulty making decisions that we know will deliver greater value in the long term if the short term cost is greater than another option.
- Fixating on metric data biases us to the short term
- Efficiency is over-valued
- Loss aversion creates tension between the need to innovate and the need to protect the status quo in large organizations
Gupta, Sunil. Driving Digital Strategy: A Guide to Reimagining Your Business. Boston, Massachusetts: Harvard Business Review Press, 2018.