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Should chief executives focus on the next 100 years? | Should chief executives focus on the next 100 years? |
(6 days later) | |
What is a long time to wait for a reward? A few days or weeks, or can you wait for months or even years for something you want? | What is a long time to wait for a reward? A few days or weeks, or can you wait for months or even years for something you want? |
For a child wanting to eat a yummy treat, a few minutes could seem a lifetime. | For a child wanting to eat a yummy treat, a few minutes could seem a lifetime. |
Walter Mischel, of Stanford University, explored this in the 1960s with a series of experiments giving children marshmallows. | Walter Mischel, of Stanford University, explored this in the 1960s with a series of experiments giving children marshmallows. |
His studies showed that children who were willing to forgo eating a marshmallow offered to them immediately in exchange for more marshmallows in a few minutes ended up becoming more successful in life. | His studies showed that children who were willing to forgo eating a marshmallow offered to them immediately in exchange for more marshmallows in a few minutes ended up becoming more successful in life. |
That's the challenge facing the men and women running some of the biggest companies in the world. Should they focus on quick results, or on making really big riches for their shareholders several years, or even decades, down the line? | That's the challenge facing the men and women running some of the biggest companies in the world. Should they focus on quick results, or on making really big riches for their shareholders several years, or even decades, down the line? |
For Steve Tappin, who coaches chief executives via his company Xinfu, this question came into focus on a summer's night last year on a rooftop in London, surrounded by 50 Chinese executives he was entertaining for pre-Olympics drinks. | For Steve Tappin, who coaches chief executives via his company Xinfu, this question came into focus on a summer's night last year on a rooftop in London, surrounded by 50 Chinese executives he was entertaining for pre-Olympics drinks. |
During a presentation given by the Virgin Group about all the branches of the company - from airlines to records to banking - he saw that they were most impressed by Virgin Galactic, Sir Richard Branson's company that aims to take tourists into space. | During a presentation given by the Virgin Group about all the branches of the company - from airlines to records to banking - he saw that they were most impressed by Virgin Galactic, Sir Richard Branson's company that aims to take tourists into space. |
"The Chinese CEOs absolutely loved it," Mr Tappin says. | "The Chinese CEOs absolutely loved it," Mr Tappin says. |
They saw Virgin Galactic as being truly pioneering, and it showed the scope and ambition possible from a brand. | They saw Virgin Galactic as being truly pioneering, and it showed the scope and ambition possible from a brand. |
Mr Tappin says that many Chinese companies share this huge ambition, and focus on the long term. | Mr Tappin says that many Chinese companies share this huge ambition, and focus on the long term. |
"They've a big vision in the distance," says Mr Tappin. | "They've a big vision in the distance," says Mr Tappin. |
Long timescales | Long timescales |
Mr Tappin says many Chinese chief executives aim to leave a legacy, and focus on where they want their company to be in 30, or even 100 years' time. | Mr Tappin says many Chinese chief executives aim to leave a legacy, and focus on where they want their company to be in 30, or even 100 years' time. |
The leader of car maker Geely, Shufu Li, once told Tappin: "My dream is to see Geely vehicles driven all over the world. I want to see all cars go out from China rather than be imported into it." | The leader of car maker Geely, Shufu Li, once told Tappin: "My dream is to see Geely vehicles driven all over the world. I want to see all cars go out from China rather than be imported into it." |
The chief executive of e-commerce company Alibaba looks towards a 100-year timescale. | The chief executive of e-commerce company Alibaba looks towards a 100-year timescale. |
"Set your sights high," Alibaba founder Jack Ma says. "The higher the better." | "Set your sights high," Alibaba founder Jack Ma says. "The higher the better." |
And Mr Tappin says these aren't just empty hopes - 30 years ago technology company Lenovo made clear its ambitions to become one of the biggest computer makers in the world. | And Mr Tappin says these aren't just empty hopes - 30 years ago technology company Lenovo made clear its ambitions to become one of the biggest computer makers in the world. |
Lenovo is now the world's second biggest PC maker. | |
Too fast for long term | Too fast for long term |
However chief executive of energy supplier Aggreko, Rupert Soames, thinks the world is changing so fast that it doesn't make sense to think long term. | However chief executive of energy supplier Aggreko, Rupert Soames, thinks the world is changing so fast that it doesn't make sense to think long term. |
"You know the idea that somebody knows what the world is going to be like in 100 years' time is bonkers," he says | "You know the idea that somebody knows what the world is going to be like in 100 years' time is bonkers," he says |
"I think that you've got to take the world as it is now." | "I think that you've got to take the world as it is now." |
Mr Soames believes the world is changing with such speed that five or 10 years ago we wouldn't have predicted how it is today. | Mr Soames believes the world is changing with such speed that five or 10 years ago we wouldn't have predicted how it is today. |
But Mr Tappin disagrees that fast changes and big vision are mutually exclusive. | But Mr Tappin disagrees that fast changes and big vision are mutually exclusive. |
He thinks long-term thinking is more dynamic, and that this is needed to react to a fast-changing world. | He thinks long-term thinking is more dynamic, and that this is needed to react to a fast-changing world. |
"Chinese CEOs are really chaotic," he says, explaining that the lack of quarterly deadlines and the focus on the long term means companies are less rigid in their day-to-day operations and therefore more able to react on their toes. | "Chinese CEOs are really chaotic," he says, explaining that the lack of quarterly deadlines and the focus on the long term means companies are less rigid in their day-to-day operations and therefore more able to react on their toes. |
"They've a vision and a game plan of where they want to go," he says. | "They've a vision and a game plan of where they want to go," he says. |
Long term is dynamic | Long term is dynamic |
Mr Tappin sees companies in the West as more focused on the next few years and on delivering for quarterly reports. | Mr Tappin sees companies in the West as more focused on the next few years and on delivering for quarterly reports. |
He warns this can make them miss the bigger picture of longer-occurring trends and highlights the many Western chief executives who were caught off guard by the 2008 financial crisis. | He warns this can make them miss the bigger picture of longer-occurring trends and highlights the many Western chief executives who were caught off guard by the 2008 financial crisis. |
The focus on delivering for the next quarter also means that business practices are very rigid, making Western chief executives less dynamic, according to Mr Tappin, they don't deal well with crises, and don't jump on big opportunities in time either. | The focus on delivering for the next quarter also means that business practices are very rigid, making Western chief executives less dynamic, according to Mr Tappin, they don't deal well with crises, and don't jump on big opportunities in time either. |
Visionary shareholders | Visionary shareholders |
Renren chief executive Joe Chen agrees that the wider infrastructure plays a role on whether businesses focus on the present or look to creating a legacy. | Renren chief executive Joe Chen agrees that the wider infrastructure plays a role on whether businesses focus on the present or look to creating a legacy. |
As the head of one of China's biggest social networking sites, he says China's rapid and continuing growth and its abundance of human capital make it feasible to think long term. | As the head of one of China's biggest social networking sites, he says China's rapid and continuing growth and its abundance of human capital make it feasible to think long term. |
At Renren they are looking at where the company will be in 30 years' time. | At Renren they are looking at where the company will be in 30 years' time. |
To be able to follow long-term vision, Mr Chen says that the chief executives and shareholders both need to share a vision. | To be able to follow long-term vision, Mr Chen says that the chief executives and shareholders both need to share a vision. |
"You need to have shareholders who really buy into a long-term vision," Mr Chen says. | "You need to have shareholders who really buy into a long-term vision," Mr Chen says. |
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