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Invest for the Future - Looking Beyond the Quarterly Results

Quarterly results are the bane of my existence.  Or they would be, if I ran Breakthrough like any other company.  

Instead, I am accountable to no one other than my partner and my wife, and I instead take every opportunity to maximize our business for the long run, meaning a future that is 3-5 years out.  I am extremely fortunate in that my wife and my business partner have extremely modest wealth goals and a great deal of trust that this approach is best for the company, and ultimately for them as well.

But Breakthrough is not most companies.  Most companies are driven by a need to pursue annual financial performance, and many are forced to publish and justify quarterly performance.  For many of our nonprofit clients, they may be taken to task for their performance every 2 months or whatever period their board of directors meet.

Making an investment that is 14 years out is not easy for companies.  When the state and eventually federal governments decided to invest in improving U.S. education, they were looking out over ten years into the future.  By developing and adopting Common Core State Standards for education, they were looking at 5 years of development, another 5-10 years of implementation, and finally a higher performing educational ecosystem, all bound with common standards across math, ELA, and science that allowed professional development, curriculum, assessments, and a wide variety of other resources to be deployed and aligned to this common taxonomy of educational standards.

Gone were the state-specific textbooks.  Gone was the need to design build and test a different assessment for each state.  All of these economies of scale, coupled with higher-performing standards settings, would allow us (in theory) to improve our educational system.  But it wouldn’t happen overnight.  And it might take the term of 2 or 3 U.S. presidents to make it happen.

I can't imagine the pitch I would have to make to a board, or a company owner, or investors if I told them their returns were a mere 14 years away.  It just wouldn’t happen.  Capitalism needs players who participate in the market for the long term, all the while acting aggressively in the short term.  It’s a great mix!

So don’t get too down on your government. After all, they are fulfilling an important role in our economy.  By making investments in standards, open source platforms, and the like, they are paving the way for a smarter, more efficient future.

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