Short - term thinking
I read with interest that the top three Oil & Gas support companies are most worried about the decline in drilling in… the United States.
Shale gas exploration and development has rejuvenated the US economy and given them the security of supply which they have desired for many years. Now they are finding that whilst local sources can be cheaper to develop than in farther flung locations, they can become exhausted quite quickly and they are having to compete with lower cost product from OPEC.
The Chief Executive of one of the top three Oil & Gas support companies said that he can only give forecasts “quarter by quarter” now – he has no vision beyond that point. Even the viability of shale gas is being tested by the low oil price internationally, but are we seeing true supply and demand pricing or the flooding of markets with a limited resource? The production and sale of gas guzzlers in the US has taken a big hike; global warming is perhaps not faring so well… Odd world, isn’t it?
We have all come to learn more of the way the City has operated in recent times. The constant drive for significant growth and beating competitors led to a culture of massive risk-taking and the development of derivative products which, frankly, virtually nobody could explain. We have all suffered from this, some very severely. Five years on things don’t feel very different. I am amazed by the marketing of my own bank, which seems quite excited by the fact it will now extend the same offers to current customers as to new ones (while the other banks remain greedy and separatist…). Perhaps I should feel grateful? Sadly, I don’t as I remember the decades when they weren’t so “enlightened”.
Many Chief Executives are driven to a large extent by the share price of their organisation, day by day, and have lost sight of the larger picture, of the medium- and long-term, and of the importance of loyal customers who “believe” in them. Every January we hear of the successes and failures of our large stores – “sales are up/down by 2% on the comparable period last year – this is good/bad”. Are they still good stores providing good products and good customer service? Does this really matter or is it just good content for the press?
I’m asking myself “what is of real value to us as a society and nation?”. What are your thoughts about short-termism? Can our financial, economic and/or political systems do anything to inject some sense into a world where short-term gain has not served us well?
I look forward to your thoughts.