The Power of Long-Term Thinking in Business

What is long-term thinking within business

Human thought is often innately short-term, which in business isn’t always a bad thing – effective short-term thinking in business can be vital to dealing with change and last-minute decision making. But, it often means we overlook the power of long-term thinking; a strategic approach that prioritises decisions aimed to create value for an extended period of time, where benefits are felt incrementally. Long-term thinking considers the future growth of the business.

What are the aspects of long-term thinking in business?

While long-term thinking in business is comprised of a lot of elements, which are all unique to your individual business, some common aspects include:

• Looking at the vision of where the company wants to be: The basis of long-term thinking is a clear vision of the future, and where you see the business. This involves setting long-term goals which are there to guide decisions, investments and much more. This gives a business clear direction and helps improve decision-making in the long run.

• A focus on sustainable growth: Short-term profits can look desirable, but for a business to really be successful, there needs to be a plan for sustainable, incremental growth. This involves looking at and focusing on areas where immediate returns might not happen, but long-term success is built. This might include investing in research, employee development and organisational structures.

• A focus on risk management: Long-term thinking also involves proactively thinking about risk, and how to manage that risk. Risk in business is inevitable, so having a plan for various scenarios in place for the long-term is crucial to mitigating these risks and changes, making your company far more adaptable and giving ample opportunity for success.

• Thinking about innovation and creativity: With long-term thinking, there should be a greater focus on ‘staying relevant’ which means investing in creativity and innovation, developing new processes, new products and adopting new technologies.

• A focused commitment to social responsibility and sustainability: Businesses should all be thinking about the long-term effects their decisions are having on society and the environment, and that involves considering their impact in long-term planning.

Why concentrate on long-term thinking for growth?

The benefits of long-term thinking in business

1. Allowing for enhanced decision making with more deliberate commitments and reduced risk

Long-term thinking will encourage you as a business to make decisions based on future impact, rather than short-term outcomes. It will also allow you to identify any potential risks that could arise, giving you ample time to prepare for these uncertainties within your future planning.

2. Giving a clear direction for growth

By setting out goals and objectives within a long-term strategy, it gives your business a clear direction for growth, providing alignment across the company, creating a space for better planning and execution and setting the organisation up for collaborative success.

3. Giving businesses a competitive advantage

With a long-term approach, businesses are more free to invest in innovation and creativity, which can lead to unique development, differentiating them from other competitors. But a long-term approach is also vital for keeping up with technological advancements and allowing businesses to continue competing in an ever-developing environment.

4. Providing a foundation for future success with more consistent performance

By focusing on sustainable, incremental growth over short-term wins and quick profits, your business can achieve more consistent performance over time.

5. Improving returns over time

As a result of these more consistent performance wins that long-term thinking in business can provide, you’ll likely see higher returns over time too. While immediate financial gains might not arise, long-term profit maximisation will see your business be far more profitable in the long-run. This stable and reliable growth can also attract longer-term investors.

6. Attracting and retaining high potential talent

Investing in long-term goals often includes investing in your employees – because your workforce is what makes up your business, and ultimately is what makes it successful –which means more chances for growth, development and advancement. This can increase employee retention as well as improve the overall workplace culture, creating a real selling point for attracting other high potential talent to the business.

7. Increasing business adaptability

With a long-term strategy in place which takes into consideration risk management, it means your business is more resilient to unforeseen challenges and changes that might arise, as well as a better ability to recover. It creates an adaptability which can seriously heighten success.

8. Increasing business sustainability

With long-term thinking and the ability to focus on social responsibility and implementing sustainable practices, aligning with your environmental and societal goals as a business is far easier, which can help build your reputation as a responsible organisation.

If you’re thinking about investing more in your long-term thinking as a business, coaching is a powerful tool to help embed these practices. From developing visionary leaders and encouraging strategic thinking to helping to build growth mindsets within the company and building resilience to change, it can help entrench key principles that make the basis of a long-term business strategy.