Go Long: Why Long-Term Thinking Is Your Best Short-Term Strategy

by Dennis Carey, Brian Dumaine, Michael Useem, Rodney Zemmel

Overview

800-CEO-READ BESTSELLER
 
Featured in Fortune, Harvard Business Review, and Entrepreneur, Go Long is “mandatory reading for the CEOs and boards of all public companies,” according to David M. Rubenstein, co-founder and co-executive chairman of The Carlyle Group.
 
The lifespans of companies are growing shorter each day. Why do some companies thrive and grow, while others fail?
 
Inspired by the CEO Academy®, the annual off-the-record gathering of chief executives organized by the authors, Go Long reveals how some of the world’s most prominent business leaders resisted short-term pressures to successfully manage their organizations for the long term, and in turn, aim to create more jobs, more satisfied customers, and more shareholder wealth.
 
In Go Long, authors Dennis Carey, Brian Dumaine, Michael Useem, and Rodney Zemmel take you behind-the-scenes to witness the business decisions that are enabling leading organizations to outsmart and outlast the competition.
Why did CEO Larry Merlo allow CVS to take a $2 billion hit—on purpose?

• How did former CEO Alan Mulally maneuver Ford’s $48 billion turnaround?
• How did director Maggie Wilderotter and her fellow board members engage top management to embark on an unusual exercise to help Hewlett Packard Enterprise build a long-term strategy?
• Why did former CEO Paul Polman turn back to Unilever’s original mission of leading with a purpose to fuel profits?
• How did former Verizon CEO Ivan Seidenberg convince his investors and board to allow him to make a $150 billion bet?
• How did former CEO George Buckley find a way to address investor calls for 3M to spend less on research and development while still finding a way to innovate?

These leaders argue that a short-term mindset might satisfy investors for this quarter or next, but there’s a heavy price to be paid. Instead, they argue, long-term thinking is your best short-term strategy.

Product Details

ISBN-13:	9781613630884
Publisher:	University of Pennsylvania Press, Inc.
Publication date:	05/08/2018
Pages:	140
Product dimensions:	5.20(w) x 8.20(h) x 0.50(d)

About the Author

Dennis Carey, a vice chairman of the global executive search firm Korn Ferry, has recruited some of the most successful Fortune 500 CEOs in American business. He is the founder of the CEO Academy, an annual gathering of the nation’s top business leaders, and is coauthor of five books including most recently Boards That Lead (with Ram Charan and Michael Useem) and Talent Wins: The New Playbook for Putting People First (with Ram Charan and Dominic Barton).
 
Brian Dumaine is the founder and editor in chief of the New York media company High Water Press and a contributor to Fortune magazine, where for three decades he has held various writing and editing positions, including global editor and assistant managing editor. An award-winning journalist, he has produced investigative pieces as well as articles on leadership, investing, technology, and the environment. He is the author of The Plot to Save the Planet: How Visionary Entrepreneurs and Corporate Titans Are Creating Real Solutions to Global Warming, and is the editor of the book The Greatest Business Decisions of All Time, with a foreword by Jim Collins.
 
Michael Useem is the William and Jacalyn Egan Professor of Management and Faculty Director of the Center for Leadership and Change Management and McNulty Leadership Program at The Wharton School of the University of Pennsylvania. His university teaching includes MBA and executive MBA courses on management and leadership, and his earlier books include The Leader’s Checklist, The Strategic Leader’s Roadmap (with Harbir Singh), Mastering Catastrophic Risk (with Howard Kunreuther), Fortune Makers: The Leaders Creating China’s Great Global Companies (with Harbir Singh, Neng Liang, and Peter Cappelli), and Boards That Lead (with Ram Charan and Dennis Carey).
 
Rodney Zemmel, senior partner at McKinsey and managing partner for New York, Boston, and Stamford, serves clients on growth strategy, performance improvement, and value creation through mergers and acquisitions. He has experience across a range of global industries, with a concentration in healthcare products and services. Beyond healthcare, he leads McKinsey’s support for a number of private-equity clients as well as companies in consumer-facing industries.

Table of Contents

Foreword vii

Introduction xiii

Part 1 The Secrets of Leaders Who Go Long

Chapter 1 Ford's $48 Billion Turnaround 3

Chapter 2 CVS Takes a $2 Billion Hit-on Purpose 15

Chapter 3 Lead with a Purpose and the Profits Will Follow 27

Chapter 4 Verizon's Multibillion Dollar Bet 39

Chapter 5 R&D Is the Last Place to Cut 49

Chapter 6 Boards That Think Long 61

Part 2 Why Long-Term Thinking Is Your Best Short-Term Strategy

Chapter 7 Going Long Works 73

Chapter 8 Helping CEOs to Think Long 79

Chapter 9 Mastering Tomorrow 89

Notes 99

Acknowledgments 105

Index 107

About the Authors 115

About Wharton Digital Press 117

About The Wharton School 118

Editorial Reviews

"For anyone who is concerned about the importance of forcing longer-term objectives into a public company short-term mindset and who wants to learn more about some of the heroes of this effort, this book is a godsend. Indeed, it should be mandatory reading for the CEOs and boards of all public companies.” —David M. Rubenstein, Co-Founder & Co-Executive Chairman, The Carlyle Group


“Go Long is a must-read. If you’re looking to build or lead a company that grows consistently not just from quarter to quarter, but year to year … this book is for you.” —Indra Nooyi, Chairman and CEO, PepsiCo, Inc.


“Through deep insights and original reporting, Go Long helps to bring leaders and investors the principles they need to keep long-term thinking at the heart of their strategies.” —Klaus Schwab, Founder and Executive Chairman, World Economic Forum, and author, The Fourth Industrial Revolution and Shaping the Fourth Industrial Revolution


“Go Long combines insightful analysis with inspiring stories to show CEOs, boards, and investors how purpose-driven strategies can create important economic and societal benefits.” —Rosabeth Moss Kanter, Harvard Business School Professor and Chair and Director, Harvard Advanced Leadership Initiative


“Through deep insights and original reporting, Go Long helps to bring leaders and investors the principles they need to keep long-term thinking at the heart of their strategies.” —Robert Bradway, Chairman and CEO, Amgen


“Go Long reminds us that while short-term priorities come and go, a leader can’t achieve that objective without a North star of a committed long-term strategy and vision.” —James McNerney, former Chairman and CEO, The Boeing Co.


“Go Long provides critical advice to corporate leaders dealing with today’s most pressing issue of business strategy—long term versus short term management. Must reading for directors, CEOs and all executives.” —Martin Lipton, a founding partner, Wachtell, Lipton, Rosen & Katz


“Go Long sharply delineates the tradeoffs that executives face in setting priorities. Decisions that build long-term value are the essence of great leadership.” —Donald J. Gogel, Chairman and CEO, Clayton, Dubilier & Rice

From the Publisher

"Go Long sharply delineates the tradeoffs that executives face in setting priorities. Decisions that build long-term value are the essence of great leadership."

Donald J. Gogel

"Go Long provides critical advice to corporate leaders dealing with today's most pressing issue of business strategy—long term versus short term management. Must reading for directors, CEOs and all executives."

Martin Lipton

"In Amgen's business of biotechnology, investments in significant innovations can begin up to a decade before we begin to see substantial returns. Through deep insights and original reporting, Go Long helps to bring leaders and investors the principles they need to keep long-term thinking at the heart of their strategies."

Robert Bradway

"The toughest test of leadership is leaving an enterprise stronger in every sense when your tenure is done. Go Long reminds us that while short-term priorities come and go, a leader can't achieve that objective without a North star of a committed long-term strategy and vision."

James McNerney

"CEOs face enormous pressure for short-term performance with little emphasis on the long-term consequences of short-termism—until the consequences arrive . . . . A long-term focus is not an excuse for short-term underperformance but is a reason for thoughtful debate of corporate strategy, capital structure, and capital allocation. Viewing these issues only through a short-term lens leads to under-investment in the future. This book will help CEOs rebalance their focus on achieving both short-term and long-term performance."

Ron Williams

"One of my fundamental beliefs as CEO is that prioritizing the short-term at the expense of the long-term is simply not sustainable and perpetuates the kinds of boom-splat cycles that aren't good for any business or stakeholder. That's why Go Long is a must-read. If you're looking to build or lead a company that grows consistently not just from quarter to quarter, but year to year, that balances short-term and long-term priorities, that focuses on both the level and duration of returns, this book is for you."

Indra Nooyi

2018-07-30

A manual advocates a return to a more classic mode of thinking about business.

In this book, the authors direct concerted criticism at the drastic increase in short-term thinking in the business and management world in the last two decades. They cite the boom in things like investment hedge funds that stress short-term gains and hence short-term thinking, pointing out that this phenomenon goes hand in hand with larger changes in corporate culture. The tenure of most executives is shorter now, they explain, noting the obvious result: "CEOs tend to focus on shorter-term objectives." Carey (Talent Wins, 2018, etc.), Dumaine (The Plot to Save the Planet, 2008), Useem (The Leader's Checklist, 2011, etc.), and debut author Zemmel have aimed their arguments at executives, directors, and investors, laying out the values of long-term thinking and highlighting both its risks and rewards. "One of the toughest challenges any CEO faces is staying focused on a long-term strategy while having to deal with short-term distractions," they write. They provide several prominent examples of major corporate executives who risked short-term consequences for long-term gain: the decision of Ivan Seidenberg, when he served as Verizon's CEO, to redouble his investment in the growth of his companies in the face of investors calling for selling off assets; the willingness of CVS Health CEO Larry Merlo to incur a short-term $2 billion loss in getting his chain out of the business of selling cigarettes; and the readiness of 3M CEO Sir George Buckley to restructure his company's finances to increase its investment in its own future. The authors deftly use these and other cases to emphasize that long-term thinking and long-game investing and strategizing are not only more responsible, but also more profitable if they are done with daring and determination. The narrative tactic of grounding all this in real-world examples from business headliners pays off, and each chapter in the book's first section ends with a useful "executive summary" outlining the key lessons to be learned from the individual cases. Considering the enormous harm that short-term investing has done not only to companies, but to countries as well, this book should be required reading in boardrooms everywhere.

A concise, powerful call for responsible, long-term business practices.

Kirkus Reviews

"Intensifying demands for near-term corporate performance can force immediate gains but also lasting damage on company prospects and stakeholder fortunes. With inside accounts of how some of the world's leading business executives manage for the future, Go Long provides a tangible roadmap for long-term leadership. To improve the state of this world, here is a primer for doing so."

Klaus Schwab

"For anyone who is concerned about the importance of forcing longer-term objectives into a public company short-term mindset and who wants to learn more about some of the heroes of this effort, this book is a godsend. Indeed, it should be mandatory reading for the CEOs and boards of all public companies."

From the Foreword by David M. Rubenstein

"Go Long combines insightful analysis with inspiring stories to show CEOs, boards, and investors how purpose-driven strategies can create important economic and societal benefits."

Rosabeth Moss Kanter