Today, Vince Cable, the business secretary, will address the annual conference of the CBI, the UK business lobby group. In a speech that has been widely leaked ahead of the time, he will talk about the dangers of “corporate short-termism”.
In our real-time, information-swamped environment it raises an interesting point – not about the need to bring Cable’s “chancers and spivs” to heel, but about perspective.
Andrea Jung, chief executive of Avon, is Canadian-born, but was brought up in the US by Chinese parents. She is rare among Fortune 500 chief executives (where average tenure is 3.4 years) to have occupied the corner office for 11 years. “In the US business environment, it’s all about the next 90 days,” she says. “The Asian view is that you run the gauntlet for the long term and that’s how you effect change.”
Cheung Yan, chair and founder of Nine Dragons Paper in China, shares Jung’s “Asian” view. She may have built what by 2011 will be the world’s biggest paper recycling business, but her focus has not been on size but on longevity. She told me her ambition is “to build a company of 100 years”.
Güler Sabanci is the third generation of her family to steer one of Turkey’s largest conglomerates, spanning energy, cement, tyres and retailing. “Being a family firm helps us have a long-term strategy to implement huge investments in energy,” Sabanci says about her company’s commitment to greenfield projects that are helping to develop Turkey’s hydropower. She is committed to her company’s $1bn philanthropy activities, including Sabanci University. “We cannot claim to be successful if we are only doing business to satisfy our shareholders,” she says.
DuPont is a company founded in 1802 on the banks of Delaware’s Brandywine River by Eleuthère Irenée du Pont, a French royalist sympathiser who was fleeing the Revolution. He was friends with Thomas Jefferson, and the French chemist’s powder mill supplied roughly half of the gunpowder used by the Union side in the US Civil War. Eighty years later, DuPont’s innovations with polymers would revolutionise the cost of parachutes in the second world war. When Neil Armstrong took his “giant leap for mankind”, he was wearing a space suit partly made from DuPont-patented Teflon. The company now produces bullet-proof glass used in conflict zones across the world. I asked Ellen Kullman, chief executive, how it felt to have this weight of history on her shoulders. “Humbling”, she replied simply.
This is the big advantage of long-termism: whether through culture, heritage or history, it introduces a healthy dose of humility into the boardroom.