“Stop creating marketing plans, just focus on the next 6 months,” ordered a first-time CEO from a PE-backed $90 million services firm. The CMO who shared this story offered a “What can you do?” and, with a crushed soul, returned to work. I cringed. Rant to follow.

Short-Termism Is an Epidemic

This was not an isolated incident. Every week, I speak with CMOs whose organizations focus solely on the current quarter. Most are PE-backed. A few are public. Even fewer could call themselves “Built to Last.” Where’s Jim Collins when we need him? Instead, these companies are being “Built to Sell,” but buyers beware - these short-termers are also short-timers. They don’t have staying or pricing power (more on that shortly).

Short-Termism Inhibits Growth

Forrester reports that enterprise sales cycles extended in 2024 to an average of 18 months. That means that today’s top-of-the-funnel opportunities won’t close until 2027. Not this quarter, not next quarter. 2027! Victory will be determined by the clarity of the brand story over 100 different interactions with the prospect. Each of these touchpoints takes time to think through and optimize.

Take analyst relations, for example. You won’t find yourself in the top quadrant after 3 months of effort. It could take a year or two, but when you get there, it's an invaluable source of credibility. Trade shows are another case where long-term planning is required. You can only optimize event investments with a pre-, during, and post-event plan. This plan also needs to reflect the multiple sources of value (i.e., Closing late-stage deals, strengthening current customer relations and partnerships, introducing your brand to new prospects, etc.).

Short-Termism Limits Pricing Power

I haven’t talked about pricing power in this editorial series, but thanks to my conversations with Chris Burggraeve, I’ve had an epiphany. Pricing power is the ultimate litmus test of brand strength. The stronger the brand, the more it can charge, and the better its margins. Importantly, CFOs understand pricing power. To them, unlike the amorphous notion of brand, pricing power is real. It’s money in the bank. And guess what, pricing power isn’t built in 3 or 6-month sprints.

Pricing power is gained over a long time period by consistently delivering on the brand promise. Warren Buffett famously said: "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." You could easily substitute pricing power for reputation in Buffet’s quote.

Short-termism should only apply to the tenure of the CEOs who preach it.

Written by Drew Neisser