I recently got a newsletter from my friend Lisa Nirell with Energize Growth. She works primarily with middle market CMOs. The newsletter shared the following:
“An obsession with short term results continues to haunt CMOs and undermine their ability to prove value. With an 82% spike in IPOs this year (compared to 2019), this systemic problem persists. (source: stockanalysis.com)”
When your bonus is tied to short term growth or you want to sell shares at a high price you focus on this month not next year. When you own the business, you want to do well now and make sure the future is rosy, because that’s your equity. And other than avoiding taxes by making December purchases of vehicles and equipment not really needed most owners think long term. When you think long term, you do things like the following, which are especially important during the current virus crisis and recession:
- Find and retain the best people possible even if they get paid more than others. A client recently said the business’ financial performance was down because he’s kept everybody working during Covid. He doesn’t want to lose any good people (for when his business is fully recovered).
- Invest in marketing even when business is slow (like during Covid). We’ve done more than ever during Covid and it will pay off (and is already).
- Take care of your customers, especially your best ones. Even if they aren’t buying as much as normal, having their own issues, etc. Be there for them.
- Implement growth strategies when others are hunkering down. This could mean buying a competitor or complementary firm, hiring great people even if not needed right now, or accelerating your growth plan.
It just makes sense when you are the one you answer to.
“Through others we become ourselves.” (Psychologist) Lev Vygotsky