We’ve all heard the phrase “you miss the forest for the trees,” which, of course, means that you’re not seeing the big picture. When people use that phrase, they are normally referring to the fact that you are getting too granular or tactical instead of focusing on the overarching scheme. However, I think it also applies to when people think only of the present with no consideration of the future (hence my new phrase, “don’t miss the future for the present”).
We’ve all been guilty of this at one time or another. How many times have you not studied as much as you should the night before a test because you had other things you wanted to do that were more fun? In truth, enjoying yourself seemed more important to you at the time than preparing for a test. However, in the long-run, the benefit gained from doing well on a test probably far outweighed the benefit of having a good time.
Unfortunately, there are more than a few businesses who suffer this same myopia, particularly when things go bad. We have seen far too many businesses who become very defensive and think only of how to get past the current difficulties. But what happens when the recessionary period ends? These companies will not be equipped to rapidly respond to better times and will inevitably fall behind companies that are. That’s why it is important to plan for and react to both the present and the future.
One of my favorite examples of this dilemma is from The Godfather. The different Mafia families “go to the mattresses” when they are at war. The “soldiers” literally sleep on numerous mattresses strewn across the floor of various apartments they had around the city, ready to quickly act on the boss’s orders or react to other families actions. You may remember this part of the movie, which is when all of the families went to war after The Godfather refused to assist the drug dealer. Vito Corleone was put out of commission and his hotheaded son, Santino, went “to the mattresses” with his entire family. Tom, the more level-headed consigliere, tried to get Santino to end the war because “no more money was coming in.” Santino refused to listen. He was only concerned with the present and avenging his father Vito’s attempted assasination. Luckily, Vito survived and returned to bring the peace. Vito focused on securing the future rather than satisying the present, which is why he was The Godfather.
When Kevin and I read press releases and annual/quarterly reports and listen to conference calls, one of the primary things we are trying to do is assess the competence of management. Part of that assessment includes determining if management is short-term or long-term focused. We always want management that is long-term focused and that, therefore, does not miss the future for the present.