The Business Profit Time Horizon

There are countless perspectives in the business world. The one we are most familiar with and where we spontaneously go when looking for solutions to business problems, is of course our own. But that represents only a small part of the overall picture. Being able to project yourself into someone else’s shoes expands your thinking and helps fill in the puzzle of reality. It is a very useful skill, but extremely hard to do on a regular basis. Honing this art will be extremely helpful as you look to successfully navigate a large company and get things done / change things.

There’s a side benefit as well. You will enrich your own development and round out something that is a requirement to advance to the next level.

One of the tricks I use to help me transport into another’s mind is to try to identify their business profit time horizon. In other words, is their perspective being filtered through a short term, mid term or long term lens? Generally the higher you go in an organization the shorter the profit time horizon becomes (yes profit, because it’s a business). On the surface it seems counterintuitive because leaders at the most senior level are suppose to be visionaries. True enough, but they know if they don’t meet short-term profit goals it won’t matter, because there won’t be long term anyway.

Firms have reporting levels for numerous reasons. One of them is to ensure that bright, focused minds can thrive. Another is to ensure no one person, perhaps working in a vacuum, initiates work. Perspectives are drawn into the discussion and the end result is most often far superior to the original thought (wisdom of the crowd). Senior managers want to know four things. When am I getting it? How much does it cost? What’s it worth? How can you scale it?

Time Horizon Rule of Thumb

  • If you’re a CEO you are trying to close the week
  • CMO’s are looking to close the month
  • The VP’s want to deliver a positive outcome for the quarter
  • This leaves it to the Directors to look at an entire year or beyond

Keeping this construct in mind when I’m working on an idea is helps me anticipate other perspectives. It also reminds me why people make the comments they make when I describe my ideas. What are your ways you break out of your walled garden?