Do you have long-term goals for your business? Do you want your company to have a successful future?
In Delivering Happiness, former Zappos CEO Tony Hsieh argues that prioritizing long-term goals over short-term goals will better benefit your company. He cites the reason that his store is successful because he focused on the long-term goals for his business.
Learn more about why planning a business’s long-term goals is crucial for a successful future.
Focus On Long-Term Goals For Business
An important lesson Hsieh learned as he began his career in business was to prioritize long-term goals. For business owners who are new to the game, Hsieh explains that focusing on keeping their company in business in the short term neglects their long-term goals. This is a mistake: Short-term goals, like making a certain number of sales this week, may keep your company in business, but long-term goals, like expanding into three countries, provide overall direction and a path to lasting success. If you only rely on short-term goals, your company will eventually stagnate and fail.
For example, Zappos originated as a drop-ship company: People ordered through Zappos’s website, Zappos sent that order to the shoe manufacturer, and then the manufacturer shipped the package to the customer’s house. This method was less expensive for Zappos because it didn’t need to maintain warehouses or inventory. If Hsieh had only focused on his short-term goals of keeping the company in business and maximizing profits, he would’ve kept the drop-ship model.
However, Hsieh knew that if Zappos was going to succeed long-term in business and become a key player in the apparel market, it needed to expand to have its own warehouses and inventory. Thus, Zappos stopped drop-shipping, accepting the extra expense and effort needed to create its new, self-sustaining system. Zappos sacrificed its short-term goals for its long-term ones, and doing so made it more successful than the drop-ship model ever could have been.
Should You Always Prioritize Long-Term Goals?
Hsieh says you must prioritize long-term goals for business over short-term ones. In Measure What Matters, John Doerr agrees that long-term goals are important. However, Doerr adds that whether to focus on short- or long-term goals depends on your situation—defaulting to long-term goals may not work for all companies. For example, if you’re trying to cement your company’s position in the market or survive a difficult financial period, focus on short-term goals to keep your company in business. However, if your position in the market is secure and you want to expand, or if you have more financial freedom, focus on long-term goals.
Hsieh’s example of how Zappos focused on long-term goals mostly follows Doerr’s recommendations. Zappos was already established when it decided to stop drop-shipping, and the majority of its profits came from sources other than drop-shipping. In other words, its position was secure and it could expand without much risk. Thus, Zappos met Doerr’s requirements for focusing on long-term goals for its business to succeed in the future. If Hsieh had attempted to stop drop-shipping before Zappos was secure financially and established in its market, the company might have failed.
Pre-plan for the Short Term to Focus on the Long Term
The best way to focus on long-term goals in business is to pre-plan a strong short-term strategy. If you already have a concrete, repeatable plan for your short-term decisions, you can spend more time and energy focusing on the long-term situation, rather than having to continually make short-term decisions.
In addition, having a plan stops you from panicking if you have short-term bad luck. Rather than repeatedly changing your strategy to overcome that bad luck, overreacting, and later regretting it, you can maintain your strategy and trust that it will eventually lead to long-term success. Or, if you suspect your short-term strategy will no longer have the best possible results, you can devote your time to adjusting your long-term plan while your pre-planned strategy continues in the background.
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Like what you just read? Read the rest of the world's best book summary and analysis of Tony Hsieh's "Delivering Happiness" at Shortform .
Here's what you'll find in our full Delivering Happiness summary :
- Former Zappos CEO Tony Hsieh's guide to workplace happiness
- The three principles that turned Zappos into a billion-dollar company in a decade
- An exploration of the psychology behind happiness and why it leads to success