The Art of Balancing Short and Long Term Goals with Limited Resources

Let's face it, there are never enough resources or hours to do all that we want to do.

Often we find ourselves saying "if only we had (insert extra skills, cash, help) here - we could achieve (insert something amazing here)".

Most of us claim to be time-poor and resource constrained. Ask anyone how their day was predict the answer - "Good. Busy." So it is true in our organisations.

There will always be trade-offs associated with goal achievement. Prioritising immediate results or short-term wins over long-term goals consistently (and vice versa). For one, teams are likely to have more work to do, work longer hours in pursuit of growth (and be unhappier for it).

Avoid becoming victim to "short-termism" with an intentional approach to mastering the art of balancing both. Whether we are just starting out, with a small team that can fit around two Ikea desks or in that intermediate stage where hosting the daily team huddle requires a dial-in, not a room. Even large organisations must make decisions about where and how to focus their people.

Productivity takes a dive

We are working longer hours and more of us are working. Yet growth in output is not keeping pace.

In 2024, productivity levels again took a nose-dive in Australia compared with 2023 and compared to the Covid productivity bubble. In Australia, productivity is now reaching levels not seen since 2018 with plenty of reason (we won't go into here but the Australian Productivity Commission is all over it!)

We all know long-term growth doesn't just come from hiring more people or asking our current teams to simply work more hours. The recent over-hiring frenzy in the tech sector is a classic case in point.

In fact, the very definition of Scaling vs. Growth, includes the notion of economies of scale. Each additional hour of work or dollar invested returns an incremental unit of output, dollar of revenue and profit. Scaling (done well) means returns are increasingly positive and teams are less stressed and happier.

Scaling is a constant exercise in balancing.. The challenge is in managing the tensions that come with it. Just when you think you've got one aspect of scaling sorted, another area needs your attention. Making decisions and managing trade-offs resulting from scaling tensions (see our research on this topic!)

Overly focussing on one over another - such as short-term wins versus long-term strategy and goals - and the whole flywheel is out of whack! Don't be surprised when growth and productivity takes a nose dive.

Short-term Goals

Short-term goals generally refer to financial and other goals the organisation has within the next year, quarter or less.

Financial goals include growth targets on P&L or Balance sheet items like revenue, gross margin, inventory days, cashflow or operating profit.

To achieve growth in short-term financial goals (outputs), we generally focus on leading indicators or "influencing activities" (inputs) that we know have a high impact on our goals. For example, influencing activities affecting sales revenue on a daily or weekly basis might be:

• number of inbound referrals or new account registrations
• number of sales meetings or proposals
• number of products promoted in our weekly email
• increase in marketing spend on existing customers versus new customer channels

The goals you choose, changes your teams' focus and activity.

For example, if we were more focussed on growing profit ($), not just customers (#), we might refine our leading indicators or influencing activities to help our teams be more effective:

• number of "core customer" inbound referrals or new account registrations (e.g. Amazon Prime customers vs. just any type of customer)
• number of meetings with "core customers" or proposals with pricing at > 35% margin
• number of hero product bundles promoted in our emails/socials
• improve marketing return on customers in a specific cohort from 3X to 5X based on measuring customer lifetime value (gross profit basis)

They may also include other goals less likely to impact the financial goals this year, but should impact long-terms goals, e.g.

• launching a new product line or partner,
• hiring a new specialist or leader or
• buying new software to improve make your process work faster, better or cheaper.

Generally, we focus short terms goals into two horizons; 1-year goals and quarterly goals, and use leading indicators or KPIs to track out measurable progress on a daily and weekly basis.

Long-term goals

Long-terms goals refer to goals associated with the attainment of your strategy.

Spoiler alert - by strategy we don't mean simply productivity improvements or operational effectiveness (according to Michael Porter - see original article "What is Strategy") but position and differentiation over the long-term.

There are several layers to developing a truly differential Strategy and it includes your organisation's;

• Core purpose / mission
• Strategic positioning and brand promises delivered to customers
• Differentiating activities

A good way to think about long-term goals versus long-term strategy is to focus on what must be true about your organisation over the longer term to deliver your strategy.

This includes, but goes beyond Financial metrics mentioned above. It also includes areas critical to longer-term growth such as innovation, data and documentation and strengths or capabilities.

Assuming your longer-term strategy is ambitious (!) and your plan is to scale, this will usually involve a mix of driving the current product offer and business (what the organisations knows how to make and deliver today) and potentially investing in innovation (product or process) and new initiatives aimed at driving future growth.

If we don't know where we are going, there is a high chance we won't end up there. It is imperative we have as clearly stated strategy and long-term goals as our short-term goals.

To be clearly stated, Long-term goals should consider:

• a clearly stated, measurable destination some years out from today. The next big mountain you are climbing, BHAG (thanks for that Jim Collins).
• Long-term Financial Goals (P&L, Balance Sheet) with a clear focus on both profitable growth and positive cashflow.
• Other Goals critical to stakeholders such as customers, employees, community and shareholders. Including structural improvements in operational effectiveness (e.g. productivity measures like $ or output per $ on headcount), leading indicators of how customers experience our value (e.g ratings) or how we attract and develop talent (e.g. % highly-rated talent).
• Key Capabilities or strengths that must become a source of competency or competitive advantages to deliver the strategy in the future over the long-term. e.g. product dev or sourcing capabilities to build / buy unique product, or finance and operational capabilities to manage unit costs, secure cashflow to invest in growth or deliver output faster, better, cheaper.
• Key Initiatives or things you must go do to deliver future growth e.g. enter a new market, invest in a new production facility, secure new suppliers...

Balancing the Tension between Short and Long Term Goals

How resources are allocated between short-term and. long-term goals forces trade-offs. Often time, founders and leaders are faced with the decisions of what to "sacrifice" as they are still operating relatively lean and don't have the luxury of fully resourcing every plausible action. Sometimes short-term growth is sacrificed to secure a stronger long-term position in future. And vice versa.

For example, decisions regarding:

• development effort to increase capacity to scale and bring on future customers (which tends to result in more long-term growth outcomes) versus fixing issues or delivering better reporting to today's customers (more short-term outcomes)
• hiring the next high-value specialist or leader (Chief commercial office or Chief Operating Office?) as we often do not have the cash/effort/bandwidth to hire everyone all at once.
• focussing on sales excellence and key account customer expansion versus more product-led growth such as investing in brand building, product experience and stimulating inbound enquiries from customers more broadly.

“I would have sacrificed growth in the business for a year completely … in order to get it done in a year and get it fully done.” [Founder, Middleware ecommerce platform]

Once both short and long term goal posts are clear, prioritising those activities or investments that are likely to have the highest impact on both becomes much more apparent.

How to balance and manage the tension

Clearly state both short and long-term goals during Strategic Planning.

Being just as clear about what must be true about the business over the long-term to achieve your strategy as you are in the short-term. Review and align this with your team every quarter.

Be intentional about balancing?short-term and long-term investments.

Investing in long-term capabilities and growth-driving projects >1 year while at the same time, drawing a clear line between long-term and short-term goals. Review both short and long terms goals, priorities, financials including cashflow every quarter. This helps align the team and prioritise working on activities that have the highest impact on both.

Invest progressively?in building the long-term capabilities by making iterative investments in projects and people pegged to long-terms capability building goals. ?So that when we choose to invest, we are building capabilities that may fill today's gaps and deliver tomorrow's strengths and competitive advantages.

Organise "squads" to deliver on priorities linked to long-term goals. Proactively prioritise projects that help your organisation take steps each quarter towards longer-term goals. Consider peeling away small, often cross functional teams or "squads" to separate the project from the distractions of the short-term core business.

Timebox long-term initiatives spanning multiple periods into short-term "rocks". For those longer projects which take steps towards your BHAG and longer-term goals (big rocks!), time-box goals and activity within quarterly time periods to give it focus. This will also help with galvanising the team, gaining commitment and elevating energy to get it done. Consider giving each quarterly sprint a theme and plan a celebration to avoid project fatigue.

Review, refine or stop. To make way for new activity we need to also make choices about how we free up the organisation's time to make room for something new. Making decisions regarding what MUST happen versus what is NICE to happen. Equally what are we NOT going to do.

For example, what can we stop doing or automate that may have been high-impact once, but are less important today relative to other activities? This also goes for customers and other stakeholders we serve. Are we overly investing limited time, capital and resources with customers or partners that are loss-making or non-core in terms of delivering the longer-term outcomes, strategy and scale? It's hard to shift to make - saying yes to everyone - yet a necessary one to free up resources to scale.

Final words...

• Balancing tensions during scaling often involves trade-offs.
• Making decisions about how to allocate limited organisation resources between short and long terms goals is easier with a clearly stated strategy, financial and other goals and quarterly planning process that draws a clear line through both.
• Making good decisions within scale up leadership teams means frequently revisiting and re-balancing. Revisit short versus long-term goals and resource allocations quarterly.

Feel free to reach out or book a call if you'd like to discuss a planning session or team strategy day with both long-term and short-term outcomes. [email protected]

Smooth scaling :)

Claire