Monday 1 March, 2010

Killed by short-term thinking

Marketing’s pet peeve is that finance's short-term thinking is ruining companies. Creating value takes time. Quarterly targets are penny wise and pound foolish.

Perhaps. 

But can we have some examples? Which are those great companies that finance managers have ruined?

It’s sometimes pointed out that while Japanese car companies are headed by engineers, American CEOs are typically ex-CFOs, and the results are for all to see.

But were American car companies making great cars when the Japanese took over? Did they have fantastic plans? Were they seriously pursuing exports?

I’m not for a moment supporting finance’s short-sightedness. However, I do suspect for finance men to drive a company to self-destruction its engineers (and their equivalent in service companies) and marketing guys have to abdicate their responsibility first.  

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