AI Snips
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The Short-Termism Dilemma
- Short-term focus is a major intractable problem in business today, driven by average CEO tenures around five years.
- The need for instant gratification by shareholders and boards often overrides long-term value creation.
Beware Long-Term Consequences
- Be aware of hidden long-term impacts when making decisions to avoid destroying future value.
- Balance short-term pressures with the objective to sustain high return on invested capital over time.
Flawed Strategy Focus
- Strategies often start with financial projections, encouraging focus on short-term payback rather than long-term value.
- True value creation is maximizing return on invested capital for as long as possible, beyond just hitting annual KPIs.