Devoted to Managers and those that seek to improve their management skills

This post we’ll talk about the second of Deming’s list of Seven Deadly Diseases the Emphasis on short-term profits.

This may seem a hard thing for western businesses to accept, and yet it is crucial to long-term success that this concept of looking at things over the long haul is embraced.

I like how Warren Buffett states it when he reveals why he doesn’t allow the shares of the company to split. He says that he has no interest in investors that think along the lines of looking at the next quarterly profits. He wants people that are in the company for the long haul.

It has been proven that building your company that way has the greatest opportunity for success.

Sam Walton said the same about his Wal-Mart store. He never began with the purpose of building something big and fast. It was never part of his mindset. Rather he wanted to build something that was the best – and he did.

The way he did it was by focusing in on what Deming mentions as the number one deadly sin of not being constant in focusing in on the purpose of the company. Doing that, combined with a long-term outlook, is an unbeatable combination.

The pressure to perform, in the short-term leads to some of the fiascos we’ve seen happen recently; those who cook the books to make things appear to be profitable and to meet some arbitrary numbers and expectations.

Kathleen Gallagher looks here at how Canon is looking beyond the next quarters profits to a long-term strategy.

It’s not that there shouldn’t be goals; it’s just that those goals need to be more than for the purpose of existing to meet a number that you want to reach within 90 days.

In other words, it creates the atmosphere and pressure to look for shortcuts. As a result the pressure is put upon the consistency of the purpose of the company that is vital to its long-term success.

Look for those whose outlook is one that is more concerned with profits over a long period of time, rather than trying to get a quick windfall. They are the ones that you will reach success with.