Every business faces the opposing forces of the pull for more growth against the pull for more profitability; the demand to show profit today against the need to invest in the company’s future; and the call for optimizing the whole against the tendency of individual parts to maximize their own performance. The three performance tensions — growth versus profitability, short term versus long term, and whole versus parts — provide fundamental energy that can be harnessed to deliver superior, sustainable results. The ability of the board, CEO, and executive team to navigate these tensions largely determines their company’s ability to both create wealth and serve society.
If the CEO, the top team, and the board aren’t spending the majority of their time on issues that address at least one of these three tensions, they are wasting their time on matters that are relatively unimportant.
Authors: Ken Favaro, Saj-nicole Joni
Source: strategy+business
Subjects: Corporate Governance, Management
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