Short-term strategies can harm companies in the long run.
Short-term focus impedes long-term investments in well-being.
Long-Term Stock Exchange promotes ethical, long-term thinking in businesses.
Deep dives
The Influence of Short vs. Long-Term Thinking in Companies
Companies focused on short-term gains unintentionally create harm in the long run, losing out to those optimizing for immediate gains. Examples like social media show how prioritizing long-term benefits can put companies at a disadvantage against short-term strategies, driving harmful practices.
Challenges of Short-Termism in Corporate Culture
Short-term thinking in organizations, driven by quarterly returns and immediate targets, impedes long-term investments in employee well-being and societal impact. Identifying and addressing anti-social issues stemming from short-term behavior is crucial for creating sustainable, ethical business practices.
The Long-Term Stock Exchange's Vision and Purpose
The Long-Term Stock Exchange offers a platform for listed companies to prioritize long-term success by considering diverse stakeholders, measuring success over years, and aligning compensation with performance. By embracing a philosophy of long-term thinking, companies commit to ethical practices and sustainable strategies.
Redefining Incentives for Long-Term Value Creation
Proposals to shift incentives towards long-term benefits include altering app store policies to reward sustainable practices, ensuring metrics consider societal impact over immediate gains. Encouraging organizations to align values with long-term strategies can lead to lasting positive change and ethical decision-making.
Transformative Potential of Behavioral Incentives
Changing the rules of competition to reward long-term thinking can enhance overall value creation. Initiatives like the Long-Term Stock Exchange and altering business behaviors to focus on societal well-being, employee satisfaction, and sustained growth can reshape industries towards more ethical, sustainable practices.
At Center for Humane Technology, we often talk about multipolar traps — which arise when individuals have an incentive to act in ways that are beneficial to them in the short term, but detrimental to the group in the long term. Think of social media companies that compete for our attention, so that when TikTok introduces an even-more addictive feature, Facebook and Twitter have to mimic it in order to keep up, sending us all on a race to the bottom of our brainstems.
Intervening at the level of multipolar traps has extraordinary leverage. One such intervention is the Long Term Stock Exchange — a U.S. national securities exchange serving companies and investors who share a long-term vision. Instead of asking public companies to pollute less or be less addictive while holding them accountable to short-term shareholder value, the Long-Term Stock Exchange creates a new playing field, which incentivizes the creation of long-term stakeholder value.
This week on Your Undivided Attention, we’re airing an episode of a podcast called ZigZag — a fellow member of the TED Audio Collective. In an exploration of how technology companies might transcend multipolar traps, we're sharing with you ZigZag’s conversation with Long Term Stock Exchange founder Eric Ries.
CORRECTION: In the episode, we say that TikTok has outcompeted Facebook, Instagram, and YouTube. In fact, TikTok has outcompeted Facebook, but not yet YouTube or Instagram — TikTok has 1 billion monthly users, while YouTube has 2.6 billion and Instagram has 2 billion. However, we can say that TikTok is on a path toward outcompeting YouTube and Instagram.
