Why “slow and steady” wins the (business) race

I don’t normally post articles at weekends, but I had to draw your attention right away to Joe Nocera’s article in today’s New York Times Business section. The piece is entitled Put Buyers First? What a Concept.

The article is about customer service at Amazon.com and Wall Street’s reaction to it. Two brief extracts will show you why I feel it is so important. The first is this:

Legg Mason’s legendary fund manager, Bill Miller, who has made a small fortune for his investors by betting big on Amazon, told me that “Wall Street is almost fanatically focused on margin expansion and contraction.”

But I couldn’t help wondering if maybe there wasn’t something else at play here, something Wall Street never seems to take very seriously. Maybe, just maybe, taking care of customers is something worth doing when you are trying to create a lasting company. Maybe, in fact, it’s the best way to build a real business — even if it comes at the expense of short-term results.

Here’s the second extract:

What Wall Street wanted from Amazon is what it always wants: short-term results. That is precisely what Dell tried to give investors when it scrimped on customer service and what eBay did when it heaped new costs on its most dedicated sellers. Eventually, these short-sighted decisions caught up with both companies.

Please read the article and think about it. It has implications far beyond buying and selling. In just about every aspect of our lives — especially in the workplace — we are constantly faced with choosing between short-term gratification and long-term benefits that require patience to mature.

When you choose to create relationships that people value and trust, it may take a while for the returns to show up, but once they do, they nearly always grow strongly over the years. It’s a long-term bet on something that will last.

When you resort to “grab-and go” management, and manipulation for short-term benefits to yourself, the returns may also take a while to show themselves. And when they do — as they surely will one day — they tend to be swift, unexpected, and brutal. It’s a short-term bet on something that will likely evaporate as quickly as it arose and leave you wishing you’d never done it.

As in all of life, you get to choose. Make sure you choose wisely.

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