Time Horizon

Intro

The more you drill down to smaller increments with measuring your success, the worse off you can be when it comes to evaluating the business, and getting down to more of a smaller timeframe. Time horizon is great. You’re really breaking up behaviors and activities in a short amount of time, which helps a great deal. But when you measure all your success based on that same period of time, you’re missing the point.

The Story

You’re missing the actual upside from those actions, behaviors and decisions because they often don’t run in parallel for a lot of businesses. Your decisions and your actions take place before your actual results come through for the things you do.

With many businesses, actions and decisions are not influencing what your financial results are for this quarter, which is a fundamental oversight that I have seen even with some of the biggest companies in the world. When company leaders evaluate the current quarter based on the current decisions—that’s not the way the world works for many companies.

What you did last quarter, the last six months, last year, last couple years, and in big strategic businesses, maybe even the last 2 to 5 years—that’s what’s influencing your results, not what you’re doing today. Today’s activity is influencing tomorrow’s results, meaning, and future state with whatever that looks like for your business.

If you can, avoid the trap of trying to make it seem as if today’s activity is really bringing today’s results. If you work in a shorter term business where you are much more in real time, than it’s important to look at it realistically for what you do and when is that really impacting your business.

While working for a Fortune 1000 company, all of our decisions were made quarter to quarter, so if we had a good month or we had a good quarter, we were allowed to hire as necessary, and if we had a rough quarter or rough month, we were not allowed to hire, or even had to let people go or trim our team down.

What does that do for your business?

It forces you into short term decisions for short term gains, and games. We’re trying to save today’s quarter as if the impacts of what you’re deciding really impact the results. It’s already done and you’re trimming your staff to reflect past decisions or action. So with my example, it was very cyclical, so for the period of time we knew we’re going be slower yet. We still made decisions as if we didn’t know, and we were surprised by results by a very defined industry. We still acted as if we were surprised.

If you want to make real traction in a business, if you want to have a strategic program with strategic partnerships and and focus on real outcomes, you’ve got to lengthen your time horizon to reflect that because with a length and time horizon just about anything is possible.

When you shrink it into what can you do this week or this month or this quarter?
…You’re limiting your mindset and it’s becoming restricted on every decision, action, or result, as nothing’s really possible the more you shrink it down into smaller buckets, so yes, you want to manage to the smaller buckets and manage to the level you need to.

That is different from aligning realistic expectations and outcomes based on time horizon. They are not equal, as what you are managing today is influencing what you’re going to get at a future date so that is important, but not for today’s results.

In this example, it was in that post-2020 odd rough period of time for many companies—we were in stabilization mode. We needed support in order to get through and get to a more profitable spot, we needed manpower in order to make that work so we went through a large exercise over multiple weeks, even having customers influence our leaders and getting to the point where we could lose the business if we didn’t act, yet we still had apprehension on acting. So we were willing to give up a $13 million year program, essentially to get $0 if we let it slip away.

That’s not the active decision people were making, but that’s essentially what we’re talking about if we didn’t want to hire based on how we were set up a that time and the contract. Finally, we were able to influence that we do need to hire a relatively large number of people and we went through a significant exercise to hire 60 people.

This isn’t a big deal for a business where its job is the higher people, but it’s it still is quite a distraction, effort and requires a lot of care for a number of reasons when it comes to hiring great talent, and onboarding for success. We even hired a PM to help us build out training modules to refine onboarding— we were building out the team for the future. Unfortunately, it was all for not, as the whole premise of hiring was based on a model that didn’t hold.

All leaders were on the same page as far as moving forward. All leaders were not on the same page on what Q1 looked like, as all this activity happened in Q4. Our team exploded to 160+ team members from 100 or so, and then we wanted to talk about margins in Q1 even though we knew we were going into a slower period. So we spent this entire time hiring this team, adding to the leadership team, building out a robust program, a program that could really focus on securing the business, and building a business to retain, scale, and win to duplicate our success.

So even though everything was approved, the model was reviewed, after hiring 60 people, and with a few openings in process, the brakes were slammed. We had to start dismantling the bulk of our business because the results didn’t match up with expectations. It was sickening.

We essentially hired about 60 people for no reason—service and building for the future weren’t on the docket. The mission all along, was revenue, nothing else.

https://www.eidigital.com

Closing

The gap in short term decisions and a long term vision are a risk to your business.

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Supporting Content - For More to the Story

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About the Author, Graham Peelle