Why thinking several steps ahead is underrated – but necessary. For good decision making. For board performance. For CEOs, CFOs, CTOs, COOs, and all managers.
The most important job of any executive is to make good decisions. Being able to think several steps ahead is inherent to making good decisions.
Knowing why you are doing what you are doing is important, sure. But understanding the potential consequences of your decisions, good and bad, is essential.
So much has been written about the consequences of short-termism in business. It is inflicted on listed companies in particular, where management needs to pay attention to share prices thus decisions often end up focusing too much on short-term results. This kind of short-termism, by the way, is not limited to listed companies – it can also be present in businesses that operate as partnerships and the partners are mostly focusing on their next payday. Or any business really.
But good, sustainable businesses need good decision-making that understands what the short and long-term consequences of those decisions are. It is possible to see several steps ahead. And it is a huge advantage some leaders have.
I often say that strategy is about what you decide NOT to do. So you decide what you won’t do - so you can focus on all the things you will do. Taking things off the agenda will inevitably disappoint some people, including strategic partners. Telling them no without alienating them is a skill. This skill is less important when you are a big business dealing with a smaller supplier who a middle manager championed.
It will become a minefield though if you, say, fire the founder of a company. Or if you fire the CEO who holds the most critical connections to staff, investors and strategic partners.
Take what happened at OpenAI last November. The board fired and rehired the Founder-CEO in a matter of days, with plenty of high drama in between. As the two founders returned – the board members who resided over this mess were gone, save one.
A key player in the saga was Microsoft, which has pinned a lot of its AI hope on OpenAI and was even ready to house the ousted CEO and anyone else who wanted to follow him in a brand new AI business unit. While it seemed like after the drama things went back to how they were, and more recently a review conducted by an external law firm completely cleared the CEO and they have finally appointed three accomplished and credible women on the board – things did not really go back to how they were.
Clearly, Microsoft would not want to find itself in such a precarious position again. And who can blame them?
The disastrously planned and executed coup seems to have changed the thinking of a key partner and investor, and this put the company that the board was supposed to act for in a precarious position. While the support for the product, CEO and team remained, they needed to put themselves in a stronger position of control and options. So while they continue their support for and tie up with OpenAI, they have made another big move this week.
It seems like Satya Nadella got to like the idea of an independent, internal AI business within Microsoft, and of getting it without actually acquiring a business. So, he hired another AI heavy hitter, Mustafa Suleyman, to be the CEO