The Real Impact of Short-Term Thinking

When asked to describe their company, a number of mortgage executives respond that they’re “like a family.” While this sounds good and was perhaps true in the past, the “family” model is virtually non-existent in today’s workplace environments.

Consider that the “family” employment model was supported by an era of stability. During this time, companies grew larger to leverage economics of scale and process improvement. The employer and employee relationship was centered on lifetime employment for loyal service. In a stable world, a commitment to a company by an employee and an employee’s loyalty was mutually beneficial. In a stable world, a company was willing to invest in an employee’s development because the individual would stay with an employer.

As the business world shifted its focus to short-term financial targets, the employer/employee relationship changed dramatically. Amid a marketplace filled with unpredictable changes, a “family” relationship with an employee has been sacrificed for temporary fixes and 30-day horizons. Need to cut costs? Lay off employees. Need new competencies? Don’t train your sales people — hire different ones.

In his book “The Alliance: Managing Talent in the Networked Age,” LinkedIn founder Reid Hoffman discusses how the employer and employee relationship is broken and that managers need to stop thinking of employees as family or as free agents. Hoffman argues that “we can’t keep going the way we’ve been going. A business without employee loyalty is a business without long-term thinking. A business without long-term thinking is a business that is unable to invest in the future. A business that isn’t investing in tomorrow’s opportunities and technologies — that’s a company already in the process of dying.”

Hoffman suggests a different model which I will discuss next week.

What does your business model look like at your sales organization? Are you talking “family” and acting completely different by not developing and committing to your employees?