Remember the tale of the tortoise and the hare? The story of today’s economy seems reminiscent. And since the story of the tortoise and the hare offers a moral, it’s worth looking at our economic tragedy through that lens to ensure our leaders learn from our losses rather than finance a sequel with the same failed theme.
What am I talking about? Well as a kid growing up on the border, my father used to tell me the story of the tortoise and the hare in Spanish. The timeless tale translates across languages and cultures, just like our current economic saga. I have often applied the moral of the story in my own life, focusing on long-term goals and working methodically towards them at great short-term sacrifice. As an entrepreneur and small-business owner, I have found that playing the role of the tortoise is the only way to sustain success, accomplish goals, and grow value. And one of the key problems I see underlying our financial tumult in America and across other developed nations is that our cultures seem to have forgotten the failure of the hare.
The hare was fast and focused on its ability to exceed expectations and the results of others over the short term. Moving in quick bursts, the hare could post big gains and then rest on his laurels, not concerning himself about the big picture or the long haul. Today, this is the mindset of publicly-traded Corporate America and the US Congress. As we all know, elected officials begin worrying about the next election the moment they get in office. Usually, their constituents will evaluate them on the pork they deliver in the next year or two rather than on the long-term issues and challenges they may be working to solve up in Washington. Likewise, working with publicly traded corporations over the years, I have seen an increasing trend towards management working towards monthly, quarterly and annual goals without much regard for long-term sustainability. Often the long-term benefits to their company, customers, shareholders and brands are sacrificed to hit certain short-term targets. Why? Well CEOs and executives typically enjoy large bonuses tied to meeting goals set forth on a quarterly or annual basis. Managers and executives see their evaluations, pay increases and promotions tied to meeting such goals. Since most people don’t stay with a company more than a handful of years, they prioritize meeting these short-term objectives over the longevity of the company, much less lofty goals tied to reversing climate change and achieving energy independence. Finally, corporations are obsessed with short-term measurement of Return on Investment, but often there are things you can’t measure in the short-term but rather only over long periods of time, and the returns come not only in immediate increases in sales or profits but rather in building brand value, enduring customer loyalty, and financial – as well as environmental – viability.
The financial and automotive industries are both examples of hares in the race towards success. They have focused on short-term accomplishments, moved fast to realize fleeting gains, and stumbled in the long run. They were overconfident and inconsistent. The systems their leaders and management work in created moral hazards that encouraged this behavior. And now they – and we – are paying the price for this shared myopia.
Before we commit to more bailouts, we need to ensure that if we help these companies we also encourage them – no force them – to be more like tortoises and less like hares. It’s the only way to ensure that we as a country stay on course towards victory in terms of financial stability, manufacturing competitiveness, energy independence and environmentally-friendly fuels and vehicles. These are goals achieved not overnight, but over time, just as the centuries-long race for global leadership is one designed not for the hare, but for the tortoise. In today’s atmosphere of “faster is better,” sound-bite politics, instant messaging and multitasking, being the hare may come more naturally and seem more sexy. But when we think of the choices we face, we should harken back to our bedtime story days and draw on lessons learned then and now. Which one should we be as a nation? The tortoise wins every time.