Leaders driven by short-term targets are the bane of long-term success.

I came across this study over the weekend: Supervisors Driven By Bottom Line Fail To Get Top Performance From Employees, Baylor Study Says

It basically backs what we've been trying to drive for ages at Switch: The curse of monthly and quarterly targets is that managers end up being driven by those goals, and those goals alone.

These managers are rewarded based on targets, but they have no incentive to look beyond that period. They might be good at reaching these numbers, but at the end of the day this catches up. Especially since these people are not going to be there to reap the rewards of long-term vision.

It catches up because they reach those targets at the expense of caring about other outcomes, like employee well-being, environment or ethics.

This ends up hurting their organisation's bottom lines by losing the respect of their employees, who counter by withholding performance.

The damage is also probably much larger than what this study finds. Employees who aren't engaged are more likely to leave, and less likely to bring their best game to the table.

Look at Steve Ballmer's Microsoft and compare it to Satya Nadella's version of Microsoft. Ballmer kept hitting sales targets. On paper he was successful, sales increased year on year in his tenure. But Microsoft in his time missed on the biggest opportunities available to them because they were focused on month-to-month results.

Month-to-month would have suffered a bit if they invested in Search early enough, if they took Mobile seriously or if they considered Social to be worth putting effort behind. He started his tenure with 95% of computers in the world running Microsoft, but left his tenure with 1% of the phone market.

I know this is a simplistic view, but Satya Nadella changed all that because he knows that Microsoft needs a vision.

Microsoft's Mission Statement: Our mission is to empower every person and organization on the planet to achieve more.

While it’s likely that Microsoft will never regain the market dominance it had in the '90s, Nadella saved the company from becoming irrelevant.

Invest in your brand and its purpose. Make sure it's well-articulated and well-communicated internally. Invest in your employees' happiness. Make sure that everyone is on the same page and that they care about the long-term vision, not the short-term goals.

Share short-term goals, but make them collaborative, not competitive. Everyone should understand that financial goals are needed for the business to thrive, but you should never push them at the expense of long-term goals.