Lead For The Long Term

When you head an organization, one of the responsibilities you have is to lead for the long term. It’s super hard to do when you are in the early stages of a startup since it seems like every day there are small fires to put out. You live in fear that if you don’t put out the small fires, they will become large. Once you start to scale, the leader of the company needs to have enough trust in their team to put out the fire. The culture of the organization that was forged when it started up can have a big effect on this.

Leaders need to think long term and transmit that vision to the market if they are public, or to investors if they are private. They need to tell a story about how their long term vision fits with the short term execution and will bring shareholders money. Having shareholders ring the cash register over and over again is a sign of a sustainable company.

I am looking at a couple of recent events. The CEO of Overstock stepping down was a bit bizarre. If you haven’t seen the video, you should watch it.  I don’t follow individual stocks but apparently, Overstock was down 36% prior to the resignation. Here is a three year chart courtesy of Ycharts.

OSTK data by YCharts

You might argue that he was leading for the long term with their foray into crypto, but that might have just been a diversion to cover up something else. If there is an SEC investigation, we will see so only time will tell. I don’t really have any gut feel on it except when you see someone acting kind of strangely in a video you wonder. I can recall people acting like that on the trading floor and they were either on cocaine or something else, or they were about to lose their shirt.

Then I look at Trump’s tweet yesterday raising tariffs 30% on China and telling American companies to look elsewhere.  That looks like managing for the short term without any long term vision. I get that China is not a magnanimous player in world trade.  I get that they are a communist nation at their core.  But, I don’t think that the tariff thing is part of a long term three dimensional chess strategy and all it is doing is hurting Americans.  Maybe it’s time to rethink the strategy, tie it into a long term one that is sustainable and figure out a different way to get the Chinese to play nice in the sandbox on trade and intellectual property.