Balancing Short-Term and Long-Term

The McKinsey Quarterly has a good article (free reg. required) about building a healthy corporation by balancing short-term and long-term.

Tools intended to encourage a more balanced approach and to promote "systems thinking" have been available to managers for some time. But our experience suggests that these tools are either being applied too mechanically (and therefore ineffectively) or being squeezed out by the focus on survival and by perceived pressure from investors. And that's to say nothing of the increased near-term demands created by new regulations on financial reporting, particularly in the United States.

Good short-term results are important, of course; only by delivering them will management build confidence in its ability to realize longer-term strategies. But companies must also act today to ensure that they can convert their growth prospects, capabilities, relationships, and assets into future cash flows.

"applied mechanically" That's a big problem. We no longer live in a static, mechanical world, yet some business minds want to keep doing the simplistic analysis they have always done.