Weekly Blog by Philip King, CEO of the ICM - ' The long and the short of it'

I've been to some interesting meetings this week but one, in particular, reminded me of the importance of looking at both the short and the long term.

Businesses often make decisions that seem right at the time but can then look back two, five, or even 30 years later and realise how flawed their thinking must have been.  I was reading a book recently that reminded me that, in 1982, IBM didn't buy Microsoft because - at $100 million – it was too expensive, and there are countless other examples of businesses failing to take, or turning down, an opportunity that would have been transforming.  I've been listening to Steve Jobs' autobiography in the car over the last few weeks; Nolan Bushnell's decision not to invest $50,000 in return for 33% of a company that recently hit a valuation of $600 billion must stand out as the biggest of all big missed opportunities (although he's done pretty well out of speaking in public about that missed opportunity)!

It's all too easy to make decisions for the short-term that fail to cater for the long term needs of the business and we often see very senior people lose their jobs (football and FTSE100 companies are primary examples) because short term results are not good enough.  The problem with this is that short-term expediency ends up driving the organisation and that often isn't best for the business, its people, or the economy.  CIMA published a fascinating report recently called Rebooting Business: Valuing the Human Dimension.  The report draws on the experience and views of a number of senior business leaders and to quote from the summary:

"If they get the human dimension right, companies will be able to focus their resources on the right things and create value for the long term.  One of the greatest challenges to realising the potential of the human dimension is the level of focus on quarterly reporting and short-term results. The value that people add will not appear in the quarterly reports and may not be apparent in the short run, but it must be given its due if we expect to make the right decisions.  Adopting strategies that will sustain success for a business is not a 'nice to have'………….."

One of the ICM's key priorities is to work with organisations and individuals to raise the value of the human dimension in business by developing the careers of credit professionals and by raising the performance of the teams they work in and run.  It's great to hear serious business leaders recognising that people are as important as numbers, and need to be a priority for sustainable business.