I was stretched out in a hammock by the sea in a small fishing village on Grand Cayman in early April when news of the stock market’s sudden dip reached me.
My wife, Laura, and I sipped iced tea and watched the palm trees sway rhythmically that week as day traders and other investors in the U.S. panicked, sending the NYSE and NASDAQ into a nasty tailspin.
While sellers frantically chased the falling knife that was their dwindling profits, the two of us didn’t even work up a sweat. Sure, like most young professionals, we have a bit of money invested in technology-sector stocks, but unlike quick-hit investors, we are in the market for the long haul. We weren’t worried about daily fluctuations (even those of whiplash proportions) in our portfolio value.
And isn’t that one of most basic rules of business — to make investments and position your company for long-term success?
If you’re in a venture for the short term, you’re asking for problems. Hoping to strike it big, then cash out quickly, is not realistic for most business owners. That’s not to say you should eschew projects specifically slated for shorter timelines, but as a general rule of thumb, research and development and/or large capital investments are designed to prepare a company for long-term successes.
One of the keys to making these long-term business investments is due diligence. Without it, the chance of success dwindles. And, even the most diligent research and development project is useless if the product or service won’t be accepted by those for whom it is designed.
Remember New Coke? It’s hard to believe Coca-Cola Co. actually did any testing with consumers before bringing the product to market. The company spent millions to develop that “new and improved” product, only to have it fall phenomenally flat.
There is no hard and fast strategy to ensure long-term investments pay off. Technology changes quickly, the marketplace evolves. But you can raise your odds tremendously if you plan ahead. Consider Amazon.com’s strategy, which has been to build brand name awareness first and worry about achieving a return on investment later. Analysts are split on whether it’s a good idea, but Wall Street continues to love the company.
Other Net-related businesses haven’t been so lucky, as the recent shakeout and delay in IPOs has exposed cracks in the gilded lining of technology-oriented stocks. In the long run, only the companies with strong ideas and an ability to execute them will survive.
Part of investing for the long run is investing in people. While you’ve put your faith in technology and your company’s product, it’s the people that you have in place in your organization who execute your vision to make your business successful.
So what’s the state of “people” in Northeast Ohio businesses? SBN partnered with the Employers Resource Council to find out. The ERC conducted a white paper survey of companies and asked them about their people. You’ll find the results featured in this month’s cover story (page 75) and scattered throughout the magazine.
Take a look and let us know what you think.
Dustin Klein ([email protected]) is editor of SBN.