Why It Pays To Be Long-Term Greedy

In the 1970’s, one of the big names on Wall Street stood apart: Goldman Sachs. Gus Levy, the firm’s managing partner, was asked what made the culture so special. “At Goldman Sachs,” Levy responded, “we’re greedy, but we’re long-term greedy.”

What he meant was that the firm sought always to advance its own self-interests; their enviable culture wasn’t a function of altruistic do-goodism. But the time horizon for calculating ROI wasn’t days, weeks, or even quarters—it was years, and maybe decades.

More recently, when BlackRock’s Larry Fink said CEOs should scrap quarterly EPS guidance and take a long-term strategic view, he could have pointed out that one prominent CEO had already done just that. Unilever CEO Paul Polman made this choice his first day on the job back in 2009.

Amazon’s Jeff Bezos is another CEO who has demonstrated a willingness to “plant seeds that take seven years to bear fruit.” As he’s explained, “If we needed to see meaningful financial results in two to three years, some of the
most meaningful things we’ve done we would never have even started. Things like Kindle, things like Amazon Web Services, Amazon Prime. The list of such things is long at Amazon.”

Every leader can go “long-term greedy.” For instance, what do you do when you encounter a Moment of Truth—a situation where you know what you’re supposed to do—but due to productivity or other pressures you’re tempted to do something else? As Gus Levy suggested, he avoided taking shortcuts not just because “it’s the right thing to do” but because it’s good business, viewed from a long-term perspective. The payoff associated with “doing the right thing” takes the form of reputational and brand equity, valuable relationships, smoother, more predictable operations, and competitive advantage in the recruitment and retention of top talent. (Of course, for this payoff to occur, long-term greedy leaders must also hold their people accountable to high standards.)

But going long-term greedy isn’t just about your ethics. For example, it has implications for how you select and develop people. Do you actively hire people smarter than you? There’s a short-term cost to your ego: You give up the opportunity to be the smartest person in the room. The long-term payoff is a stronger, higher-performing team. Do you delegate as much important work as possible? It’s costly in the short run. You give up time you don’t have to equip others to do something they won’t do exactly the way you’d do it yourself. Painful. But the long-term payoff is that your people know how to perform…so you can focus on your highest and best use.

And what about when those performers have opportunities to move onto bigger and better assignments elsewhere. The short-term greedy leader stands in the way. She or he doesn’t want to have to recruit and develop a new person to fill the role. Long-term greedy leaders recognize that supporting the people they’ve helped develop to move on fosters a reputation that attracts new “A” players. What else do long-term greedy leaders do? They’re not impulsive. They believe that “speed wins” but it also kills. They assess risks. They invest time to listen to stakeholders, reflect on what they’ve heard, and make informed decisions. The payoff is less rework, and higher-quality decision-making.

Long-term greedy leaders are also committed to learning from mistakes. They lead their teams in “after action reviews” to capture “lessons learned” at the completion of every major milestone or initiative. These take time and are sometimes unpleasant: After all, who among us relishes a collective meditation on what went wrong? But the payoff is a learning, continuously improving team that actively converts its mistakes into hard-won intellectual capital.

The bottom line? Successful leaders calculate the ROI on their decisions and actions based on a time horizon that extends beyond the end-of-quarter.