The conflict between annual targets and long-term survival

A managing director or executive board must focus on achieving annual targets in order to satisfy shareholders and secure management bonuses.

As a result, the focus often shifts almost entirely to short-term goals. The entire organization aligns itself to meet these targets, while the question of long-term success is frequently pushed into the background. This reflects what is known as a “finite game”: the objectives are clearly defined, and the outcome determines whether one has won or lost.

What is often overlooked is that entrepreneurship is, in reality, an “infinite game.” There are no final winners or losers. There are only companies that are still in the game and those that have dropped out. A company exits the game when it becomes insolvent or slips into a “second league” due to significant loss of market share.

In this context, the German language is particularly fitting. The head of a company is called a “Geschäftsführer” — literally, someone who leads the business. This person is responsible for guiding the business, ideally into the future. Unfortunately, many focus only on short-term incentives and think: “In five to ten years, I won’t be here anyway.”

This is why business development is so critical. It supports management and all departments not only in achieving short-term targets but also in acting strategically to ensure the company remains in the game over the long term.

For owner-managed family businesses, the concept of the “infinite game” is especially important. The focus is not on the next quarter, but on the next generation.