How to balance the long term and short term interests of the enterprise

Mr. Run said: "Only by knowing how to balance the delicate relationship between the two can you grow into an artist." "That's true.

A good manager or filer should be a management artist who knows how to balance short-term interests and long-term interests, and he will neither chase short-term interests to the detriment of long-term interests, nor ignore short-term interests for the sake of long-term interests and let the organization die suddenly.

In reality, especially in some organizations with a tenure system, it is relatively rare for people to ignore short-term interests for the sake of long-term interests, but it is common for short-term interests to be harmed for long-term interests. They tend to be under the pressure of performance, growth, political performance, etc., and choose to fish for the best of their ability. In the short term, the harvest is very good, the performance is great, and in the long term, there will be no fish to catch in the future.

Sacrificing the long term for short-term gain is tantamount to quenching your thirst.

Summary. For example, the CEO's decision to reduce any overhead costs (personnel training, product development, market development, equipment renewal, etc.) will immediately lead to an increase in short-term profits.

The method of forcing the reduction of indirect costs will inevitably lead to a decrease in the quality of the business, which will have an impact on the long-term development of the enterprise. Increasing the investment in indirect costs, such as the development of new markets and the training of employees, will immediately reduce the current profit, but it is a good thing for the long-term development of the company.

Hello, we are happy to answer your question about why companies should balance short-term and long-term benefits.

Because only by taking into account both short-term and long-term interests can the development of the enterprise not only ensure the current development of the enterprise, but also have a good impact on the long-term development of the enterprise.

For example, a CEO's decision to reduce any overhead costs (personnel training, product development, market development, equipment renewal, etc.) will immediately lead to an increase in short-term profits. The forced reduction of indirect costs will inevitably lead to a decline in the quality of business and have an impact on the long-term development of the enterprise.

Increasing the investment in indirect costs, such as the development of new markets and the training of employees, will immediately reduce the current profit, but it is a good thing for the long-term development of the company.

Therefore, companies need to find a balance between short-term and long-term benefits.

A business that only thinks about today will certainly not have tomorrow. On the contrary, today's excellent companies are actually determined by yesterday - yesterday spent more energy and money than most enterprises on projects that cannot immediately improve short-term profits, such as technology development, personnel training, market cultivation and organizational optimization. Balancing the long-term and short-term interests of an enterprise should follow the following principles:

1. When the life of the enterprise is not endangered, the long-term interests of the enterprise are put before the short-term interests. This is an important principle, on which all other principles are built.

2. When there is a conflict between the interests of the enterprise and the interests of customers, put the interests of customers before the interests of the enterprise.

3. When there is a conflict between the interests of employees, shareholders and enterprises, the principle of sorting should be the enterprise, employees and shareholders.

4. It is necessary to weaken the impact of periodic financial appraisal on continuous business.

5. Performance evaluation.

Quantitative indicators are at best general, and non-quantitative indicators should be at least as important as quantitative indicators.

6. The principle of personnel policy must be based on internal training, supplemented by external recruitment.

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