Corporations today are under relentless pressure to boost profits and stock value every single quarter. How can they escape this dreaded hamster wheel?
It’s called “corporate short-termism”: the demand by investors that a company show profits now, even at the expense of a more remunerative future. Executives find it almost impossible to make investments that won’t realize a return any time soon, yet are ultimately necessary to the survival of the company. So how to adopt the long view, while keeping investors happy? Gregory Milano has a solution. He is founder and CEO of Fortuna Advisors, LLC, and author of the book Curing Corporate Short-Termism: Future Growth vs. Current Earnings. On this episode, he proposes an approach that redefines value and aligns managerial behavior in the interest of long-term success. It’s possible to strike a balance between the need to drive current earnings and invest in the future, he says, as long as you “think like an owner.” Hosted by Bob Bowman, Editor-in-Chief of SupplyChainBrain.
Show notes:
Milano’s book, Curing Corporate Short-Termism.
