Short term or long term success

For commercial organisations in public ownership 'business success' is almost invariably taken to mean 'making the numbers' or giving a good financial return to investors. Analysts comment on business performance each quarter, and company executives are often under great pressure to meet market expectations.

Companies meeting financial expectations are hailed as 'successful' pretty much regardless of how they got the results. The consequences of complying with this short term thinking are "loss of sight of longer-term value creation for all stakeholders leading to the unintended consequences of destroying long-term value, decreasing market efficiency, reducing investment returns, and impeding efforts to strengthen corporate governance". (See Breaking the Short-Term Cycle)

Long term business success is not achieved by an unremitting focus on short term profitability. Organisations that work for success in several dimensions are more likely to achieve longer term profitability and be more adaptive and resilient to changes in their operating contexts.

Designing organisations to be 'successful' means knowing what success is for that particular organisation.

There are several methods of aiming for business success in several dimensions: the Balanced Scorecard, the Malcolm Baldrige National Quality Award, and the European Foundation for Quality Management Excellence Award – are three examples of business results models that do this. Adam Werbach in his new book Strategy for Sustainability offers another way of defining business success. Which offers all sorts of possibilities for new organization designs.

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