Is it even correct for large-company management to focus “over the horizon?”
What role do common performance metrics play in guiding company focus and activity?
A debate that rages in the academic literature is also a constant topic of conversation in the HBS classroom: Should managers, and companies, be investing for the long-term growth of the firm, conceiving of successive generations of new organic or inorganic growth, or should they rather exploit the current core business to its fullest and let investors diversify their bets? Does it depend? And if so, on what?
Further, what clues can you discern from reported performance metrics concerning the quality of a company’s growth planning efforts? Are there any indicators you can spot that reassure you about a company’s long-term prospects? Any that should raise concern?