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CEOs’ Strategic Balancing Act

High-performing CEOs do not shy away from tension between long-term and short-term goals.

(originally published by Booz & Company)

Title:
Embracing Commitment and Performance: CEOs and Practices Used to Manage Paradox

Authors:
Tobias Fredberg, Michael Beer, Russell A. Eisenstat, Nathaniel Foote, and Flemming Norrgren

Publisher:
Harvard Business School, Working Paper No. 08-052

Date Published:
January 2008

CEOs face two conflicting mandates: to achieve their organization’s short-term performance goals and to adhere to its long-term strategic plan. The authors of this paper interviewed the CEOs of 26 organizations, all of whom achieved sustained excellence on such metrics as annual growth rate and industry reputation, to determine how they earned organization-wide support for their strategic initiatives. Unexpectedly, these CEOs challenged the conventional wisdom that commitments to strategy come at the expense of short-run performance. The authors identify general strategies and specific actions that their interview subjects have employed to manage this paradox.

Bottom Line:
High-performing CEOs do not shy away from tension between long-term and short-term goals. Rather, they help the organization have it both ways.