Short-termism: Shift Our Perspective to Change Our Outcomes

A few weeks ago, at the Net Impact Conference, the concept of “short-termism” made its way in to more than a handful of panel discussions and key note presentations. Which has caused my own contemplation of this term as of late; its root cause, the factors that perpetuate it, potential antidotes for it.

It’s not hard to understand how this perspective permeates our day-to-day lives. The instant gratification our society has grown accustomed to is the embodiment of individual short-termism. Cause, effect. Want, get. Do, see results. On demand. Delivery everything. Instant downloads… Technology has afforded us tremendous benefits over the last decade, but I’m not sure this is one of them.

Beyond the ways in which short-termism affects us as singular agents, there is a significant impact it has on the way businesses are being run. According to a working paper published by HBS and written by Francois Brochet, Maria Loumioti, and George Serafeim (March, 2012): “In recent decades, commentators have argued that many corporations exhibit short-termism, a tendency to take actions that maximize short-term earnings and stock prices rather than the long-term value of the corporation." When the outlook of the investment and financial communities is focused on the idea of almost immediate returns, there is an implication for the very way companies structure themselves. If incentives exist for executives based on quarterly – or even bi-yearly – performance, what kind of message does that send? My interpretation would be something along the lines of “fix things now, however un-sustainable your solution, so that our year-end earnings allow us all to get our bonuses”. Now honestly, how much change can be expected to transpire in time windows that span 3 to 6 months? A quarter is twelve weeks! But if your bonus or promotion is based on your performance during Q2, it’s no wonder people shorten their focus and pour all their energy into the band-aids that will offer quick – almost certainly unsustainable – fixes. It’s not even really their fault.

This problem is clearly deep and systemic, and arguably hindering the way our economy moves forward. I won’t pretend to have anything akin to a comprehensive answer (full disclosure: my understanding of financial institutions and the investment sector is admittedly quite poor). However, I do see an opportunity for the startup and social entrepreneur sector to provide at least a partial solution (and this is an industry I am much more familiar with).

I believe our current crop of social innovators is uniquely poised to challenge these binding parameters of short-termism. From the onset, they have an opportunity to create business plans and models that take into account 10 and 15 year-long roadmaps. I’m not suggesting that there shouldn’t be benchmarks, and that incremental results along the way shouldn’t be expected. But I am proffering that it might be ok for some to say “my idea/product/service will achieve its ultimate goal [insert “maximum return”, depending on your perspective] within 12 years of launch”. Especially in the sustainability space, systemic changes aren’t made quickly (at least not if they’re made well). And that’s ok. It should be acceptable to take a bit longer to get it right. I’m not opposed to quick iterations, especially in the startup space, but I do think that the expectations for enduring change should be mapped out on a longer timeline. The structure, the evaluation, and the eventual success of this kind of company would look very different than how many “5ish years to IPO” startups do now. It would require the VC community to consider the longevity of their investments, while encouraging new companies to consider their long-term strategy. Again, I’m not saying that shifts and changes in direction can’t occur, but if we focus on a benefit that is a longer way out, we might, by design, start creating more sustainable models from the get go.  

Perhaps the steps towards this are small (almost surely). And maybe they even start on the individual level. I would actually challenge myself (and any others, if interested) to try taking the long view of some of our usually cavalier decisions. So in the spirit of baby steps: I vow to not be upset if I can’t lose those 5 pounds in one week (instead, give myself a month and a half, and then really keep it off). I vow not take a handful of small, weekend getaways for the next two years so that I can afford a big adventure in three. I vow to invest in my career development so that I can land in a role that I’m best suited for, even if that’s 5 years off. I don’t pretend that any of this sounds easy (or even desirable) but there is something rewarding in the thought of putting in the time to yield a substantial benefit down the road.

Because here’s the bottom line: If we keep operating within systems that demand quick returns and fast outputs, it’s going to be a long time until we see real, lasting change.

Next Gen Entrepreneurs...And a Note on "Empowerment"

I was recently given the unique and interesting opportunity to be a “professional judge” (I chuckled at the title for quite some time) at a “speed pitching” event hosted by DoSomething.org.

The gist: Young entrepreneurs with ideas for nonprofit organizations participate in a bootcamp-style program that teaches them the abc’s of planning and launching their dream projects.

My role: Sit on the outer ring of a massive circle (literally, think speed-dating setup) in order to listen, critique and rate these 2 minute pitches from the group of talented, albeit very nervous, kids.

The outcome: Of the 12 ideas I was pitched, I’d say 2 were actually good (which actually isn’t that bad). And I’d say that all 12 used some derivative of the word “empower” at some moment in their 120 seconds of speaking (which is kind of annoying). Within the nonprofit space – and I feel entitled to say this since I used to work in it – “empower” might be the most overused word there is. Which is a shame, since it has a lot of potential as a word. But alas, it’s been diluted to a practical stand-in verb, used to convey the very act of just “doing” in many cases. So, as opposed to illustrating what their organization was poised to accomplish, I began mentally docking points every time someone said “to empower youth” or “in order to advance empowerment of the under-served”. To me, they were now using a common place fluff word, and I was unimpressed that they hadn’t found more originality. Of course your organization is intending to “empower” an “un-empowered” group (these are nonprofits, after all, and I’d argue this is part of a general criteria). So spend more time and energy on what you’re empowering them to do. And why? What are the outcomes, and how are you approaching this challenge that is different than the others who are currently tackling it?

I don’t mean to be too harsh on these kids. The fact is, most of them have great ideas (*most*). The pitch is a work-in-progress, and DoSomething is committed to helping them refine it. Based on what I heard, I have a handful of across-the-board suggestions. I feel these pieces of advice are applicable to any of us starting a new endeavor (myself included) so I’ve put a little checklist into writing:

• Be concise. Two minutes is actually a LONG time to get your idea across. And I promise, simple = better.
• Make it personal. There is a nonprofit tackling just about every cause under the sun these days, so what makes your idea differentiated is the story behind it (because I promise someone has already thought about building an after school program in every inner city district or starting a support system for families with a child suffering from cystic fibrosis). If you don’t have a deep and compelling connection to the mission yourself, you might be better off partnering with an organization already addressing the cause.
• Be passionate. This really builds off the above, but without the personal commitment and drive to your cause, you might as well go the collaboration route (which, for the record, I am a huge proponent of).
• Be charismatic. If you have the above two, you’ve probably got this one down. It’s only 2 minutes, so bring all the energy and charm you can muster (genuinely)!
• Explain the why. There has to be a sound reason for your endeavor. Whether it’s a personal experience or staggering statistics, you need to be able to explain why you’re doing this.
• What’s the outcome. If you succeed, what have you delivered? What has changed and how is the world a better place? You need to be able to articulate what your success story looks like and why it’s meaningful (give me something tangible I can help achieve).
• Have an ask. Don’t come to the end of your time and leave the person sitting across from you thinking “ok, that was all nice and good, but I don’t have a clue why they’re telling this all to me”. There is always something to get out of the person, so you should (a) know enough about them to be clear on what that is and (b) make it extremely apparent how they specifically can help you.
• Find a new buzzword. Extra points to all who replace “empower” with another verb.

So, to all these young, energized social entrepreneurs, go get it. Keep up the work on your pitch and the further you come in articulating your idea, the more refined the organization may become in and of itself. It’s a funny little thing, this power of communication. So pay attention to it and let it help you shape your ideas. Listen to yourself talking about the organization, and listen to how people react. Be open to changing bits and pieces – I promise it won’t ever be “perfect”. And remember – if you can’t explain it simply, it’s probably too complicated.

Peer Pressured in to Voting?? Awesome.

 iPhone: Check. Facebook app: Check. Mobile upload of your Election Day experience: Check (if you’re cool). On November 6, social media worked its magic into essentially guilt-trip anyone who wasn’t already head to the poll to get a move on.

In today’s hyper-connected, always-wanting-to-share culture, there are many moments in which we see feel measured by our social media lives. “Even though that party wasn’t so fun, the pictures make it look like a blast, so my ex will see these and think I’m totally living it up.” “Why does that girl I barely knew in high school always end of traveling around the world – according to her check-ins? My life is so boring compared to hers!” A lot of annoying, superficiality that probably deserves another rant (but I’d be lying if I said I didn’t fall victim to it sometimes, too). But what I witnessed on Election Day was how this same social-self-comparisons phenomenon can be used to drive people into meaningful action.

I myself am not much of a sharer/poster/checker-inner (comparatively). But I felt quite compelled to update my Facebook status on Tuesday morning with a photo of the insanely long line weaving through the PS 261 school cafeteria. I was exercising my right to vote – despite how awful florescent lights and no coffee can be at 7:30 am – and it felt good. Shockingly good. And much more so than other feelings of pride or accomplishment, I wanted to make sure people knew I was out there doing it (I’m not politically apathetic!). So as I was slowly crawling through the line, boredom inspired Facebook trolling, which lead to a crowd-sourced slideshow of other poll site lines. And since I was in my own, I wanted to contribute (I wasn’t going to be the asshole that just said I voted – I was going to offer documented proof!).

I can imagine that for anyone that didn’t get themselves to the poll – and did get themselves on Facebook – felt a little left out of the look. And I like to imagine that maybe, just maybe, the onslaught of Election Day sharing convinced one or two non-believers to get out there (if for nothing else than to have their own “my poll line was so long but I stuck it out because I care!” story at the next get together). So even if it was just for show, I’m a believer that the outcome is really what matters. The ways in which we get people to take a desired action are sometimes inconsequential (think about tricking kids in to eating broccoli until they realize they actually like it – totally fair game). So for all those who measure their coolness in posts, uploads, likes and comments, I hope you had a field-day on Election Day. You’re cool!