Does Short Term Matter?

So I have this hypothesis that I would like to demonstrate (maybe even validate) with a quick experiment. Take a look at the following pairs of opposite words.

• order and chaos
• stability and risk
• capital and debt
• long term and short term

If I’m right, the first word of each pair is likely to have made a more positive impression on you than the second word. Generally, they just sound like the better situation or option.

I think the reason it sounds that way is because of universal values that we have been raised and educated to believe in throughout our lives. In common financial wisdom, we are taught to plan long term and to eliminate debt. We have governments and authority structures that exist to maintain order. We seek to work with companies where we can find stability. And all rightly so. In the context of our personal lives, this kind of predictability is often beneficial.

In a dynamic business environment though, these pairs of words are actually just a few more tensions you need to navigate in the interest of making the right decisions.

Navigating tension

I’ve covered a bit about navigating tension in a previous article on the tension between “necessary” and “possible”. These are just a few more to think about. While they may seem to be opposites, it’s important to note that they’re not a black-and-white choice to make, rather a scale to balance.

Here’s an obvious one for those in business. The decision between taking on capital or taking on debt, while seeming like a no-brainer, is actually not an easy one for businesses. Of course, taking on debt out of desperation can never be a good thing – but debt can be very helpful when expanding your business. That’s why it’s also called leverage.

Likewise, chaos and risk sound scary. But in the context of a growing company, both might be unavoidable or even desired. It’s a matter of phrasing, I suppose. Both words are practically synonymous to being dynamic. We want our company to eventually be in a state of stability and order, but until we get to that point, chaos and risk are necessary to keep things moving.

Short Term Does Matter

The most important point I wanted to make in this post, though, is that short term matters a lot. We’re conditioned to think long term and to exercise patience instead of seeking instant gratification. But in the business world, particularly in startups, the short term (the tactical) is often just as important, if not more, as the long term strategy.

Here’s the thing – long term sustainability is definitely great, but when there’s no success yet to be seen even just a year from now, why invest in something that would benefit us three years away?

Following the example above on debt and capital, here’s a likely relatable case in the software industry. Similar to any debt we take on in order to expand a business, technical debt can become a huge pain come payoff time. We, software engineers, hate dealing with that and we’d love to make sure we never have to. In reality though, when we need to deliver immediate value (in other words, instant gratification, and not in any bad way) for our users, taking on some technical debt can become necessary. “Do things that don’t scale”, as the book Blitzscaling puts it.

What it means for managers

Simply put – in addition to your strategy, having clear tactical goals is very important. Help your team understand both the long term prospects and the short term needs. Be transparent and align everyone on what needs to be achieved now so we may all have a better view of “years from now“. And give people some slack to put off any work that might not be necessary for now, even if it means technical debt or the possibility of throwing away work. Remember, any software that’s released to users is never a complete waste, even if you replace the entire thing in a future iteration.

On the other hand, it’s also important not to fall in love too much with the small wins. Every short term result, success and failure both, is essentially a learning opportunity and a key step in determining the future. If your team handles these the right way, small wins should ultimately translate to success years down the road… and that matters, too.

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Some of these concepts are explained in more detail in a book I’ve been reading by Reid Hoffman and Chris Yeh called Blitzscaling, which outlines a few counterintuitive rules for companies to grow fast. If you’re in or starting a business that’s about to grow, this book might be for you. Even if you’re not though, there are a lot of interesting stories in this book you might enjoy.