In the long run . . .

Dave Kinnear 1-On Leadership

I remember several company leaders making the statement that “In the long run, there is no long run.” This was said in the context of getting everyone to feel a sense of urgency around making the numbers for the month or quarter. I have always been uncomfortable with this approach. It seems to me that such an attitude leads to making poor decisions with respect to serving our customers and stakeholders. [And I know and love the long runs!]

In a NY Times article, Professor William George explained how many of the leaders in the financial industry made decisions enhancing short-term fee income while not adequately evaluating the price risks. Those leaders “disappeared from the scene.” The consequences for poor leadership are often swift and personal. The universe has a way of holding us accountable.

Not all leadership failures are immediate and personal though. In a previous life, I watched as colleagues played the “make the numbers no matter what” game. They would pull in shipments from next month to this just to make or beat the numbers. More often than not, they did this without customer approval and wound up alienating customers. They also just piled more work into next month as they had to push harder to close orders to fill in the backlog they shipped early. This, of course, put them in the mindset that it was “all about them and their needs” rather than focusing on serving the customer. And that, in turn, is always a disaster which will come home to roost sooner rather than later. (See earlier post.)

So the questions are; How do you measure and reward your employees – short term focus on you and your company or long term and focused on the customer? Here’s some sales leadership heresy: Pay your salespeople with a substantial salary/benefit base, and then give them the same bonus incentives in which the whole company shares (revenue targets, gross margin targets, inventory targets, etc.). The logic behind this approach is simple and compelling. Nothing happens without a sale. No significant sale will happen without trust. Trust will not be forthcoming unless my customer/client knows I have their best interest at heart. I cannot have the customer’s best interest at heart if my income is tightly coupled to getting them to buy regardless of their wants/needs/long-term interests. Think about it. How do YOU like being sold?