The most common scenario we see among high-tech companies is mistakenly defined by marketing practices inherited from traditional sectors. There are distinctions that should be obvious to managers in this niche, but apparently, they are not. Businesses focused on selling traditional physical products adopt aggressive short-term sales goals for a reason: the product they sell is finished, well-defined, and has no possibilities for modification or customization. The mere fact that a high-tech product does not have visible and well-defined physical boundaries should be a clear indicator that the commercial model should not be the same or at the very least, should not use the same goal-setting mechanisms.
Most high-tech companies that rely on a traditional commercial model of setting short-term goals make fundamental mistakes that ultimately lead to similar outcomes: Unfeasibility and a lack of long-term sustainability. Let’s analyze this further.
The emphasis on short-term goals can lead to rushed and risky decisions. A tech company that sells a product without clearly defining its scope opens the door for the commercial team and executives to make promises that are difficult to fulfill or to sign contracts with clients whose needs do not match the solution, just to close a deal and bring in revenue.
Monthly and annual goals that are not tied to a long-term strategy will undoubtedly harm the company in the future. Often, executives prioritize short-term results aiming for large bonuses. Companies that are not strongly product-oriented and lack a clear definition of their target market niche tend to develop any functionality requested by a client. Even if such features are paid for, there will be a significant long-term cost. It’s easy to derail a product by adding specific features.
Ask any Product Manager what their biggest day-to-day challenge is, and I guarantee the unanimous answer will be: avoiding the inclusion of unnecessary features. This happens because Product Managers do not have short-term financial goals tied to their bonuses, their objectives are focused on long-term product growth and reach, never the short term.
"By managing the organization as if it were a black box, some divisions of HP optimized the present at the expense of future competitiveness. The company rewarded those who achieved short-term goals and thus harmed itself. It would have been better to consider the white box. The white box goes beyond the numbers; it evaluates how the organization produces them, penalizes managers who sacrifice the future for the present, and rewards those who invest in the future — even if it's not easy to measure that investment.". The Hard Thing About Hard Things, p. 140
The impact of short-term goals on the quality and innovation of products and services is crystal clear. Whenever a product team must spend time implementing client-specific features simply because they are paying for it, they fail to implement features that would benefit a larger set of clients. Customizations lead to distraction, maintenance complexity, countless technical debts, and a distorted product that ends up not serving any market niche completely.
Highly customized or customizable products become the "ducks" of tech: they walk, swim, and fly, but do none of these well. The inevitable result is the dissatisfaction of all users. Additionally, excessive customization leads to serious quality issues, as changes in one part of the software can cause unforeseen problems in multiple routines.
There is no middle ground, short-term thinking significantly affects the company's internal culture and employee motivation. When people realize that executives are more concerned with short-term gains, they tend to follow the same mindset without regard for long-term consequences. Cultures like these have a common trait: people do not give their best simply because they see no future in the product and are always one step away from switching companies. Why do you think the turnover rate in the IT sector is so high? Surely, someone who sees a future in a company would choose not to leave for an uncertain new journey.
Have you heard the phrase "Goals kill love"? It fits perfectly here, not referring to the goals themselves, but to the way they are set and pursued, which causes all the problems. Goals are essential for business growth, as long as they are created with long-term vision and business sustainability in mind, regardless of whether the person setting or fulfilling them will still be with the company in the future.
The excessive focus on immediate profits compromises long-term financial health in several ways. I'm not referring here to short-term survival, when a company is in a critical state, it must create a project to bring cash in as quickly as possible. Such moments will always exist. The problem arises when this becomes a process rather than a project. A project has a beginning, middle, and end. A process is continuous and without defined boundaries.
If the company has to do whatever it takes to bring money in and executives see no light at the end of the tunnel, it's because the company has already arrived at that unsustainable future, a path paved by the establishment of short-term goals. Escaping this future or changing direction will be extremely difficult.
The impact on client relationships and loyalty when companies prioritize short-term goals is obvious. The NPS takes a long time to improve, no client becomes a promoter, the marketing team struggles to promote the product, the churn rate never decreases, and new competitors constantly appear, stealing clients. This happens because, instead of building a product to serve most of the audience, the company had to customize features for specific clients that are not useful to the majority of the customer base or target market.
In practice, when analyzing products like this, we notice there is no clear definition of a target market. The product is generic enough to fit multiple contexts but lacks strong adherence to any of them. We return to the duck analogy, it can do a few things but doesn’t do any of them well.
This happens because the product was built not based on market research but on the needs brought by existing clients. Most of the time, the process is so chaotic that the product team doesn’t even have time to analyze the client's real need, they evaluate only the request and implement what was asked. The problem is, in almost every case of this type, what the client asks for is not what they truly need.
This topic is so extensive that I won’t delve deeper into it now. It deserves a book of its own. For now, I’ll leave you with the quote attributed to Henry Ford: "If I had asked people what they wanted, they would have said faster horses."
"Product strategy is exactly this: Discovering the right product is the company's job not the customer's. The customer only knows what they want from the product based on their experience." The Hard Thing About Hard Things, p. 54
Just like with client relationships, the pursuit of quick wins affects talent retention and development broadly. I briefly mentioned earlier that people leave when they see no future. Tech professionals are, for the most part, highly intelligent, don’t think they fail to notice what’s happening in the company and in the market. Even if leadership tries to hide the company’s real state, they can perceive it through daily nuances and management decisions.
They are more qualified than anyone to know how the product’s architecture and quality are prioritized. They can easily spot when there’s a disconnect between strategic planning, executive speeches, and the actual capacity to deliver what’s being promised. Senior leadership suffers from chronic blindness when it comes to the product’s technical capabilities. They only notice problems when they become highly visible, such as platform outages, recurring slowness, critical bugs affecting client operations, and long delays in implementing or updating features.
The team usually detects these issues months in advance. They're in direct contact with the source code most of the day, they know the product’s capabilities and limitations, and they definitely know whether the executive strategy is feasible. However, they stop voicing these concerns when they realize no action is taken. At that point, talent management becomes useless, professionals aware of the truth reach their own conclusions and move on to other companies.
I probably don’t even need to explain the connection between short-term goals and a company’s ability to innovate. Innovation is swallowed whole in a company driven by short-term gains at the expense of long-term sustainability. These are times when the company prioritizes developing features requested by a single client without studying how that request aligns with the broader client base. These are moments when a specific need takes precedence over a functionality that would broaden the product’s market appeal.
These are the times when no one calculates the opportunity cost of the developments made by the team. The stagnation of innovation is a hidden, undetected cancer that kills the organization slowly. And in many cases, when it is finally noticed, it’s already too late for any effective treatment.
"Sometimes, an executive chooses to ignore the future to hit the quarterly goal. An engineering manager, for example, may meet the schedule and deliver all requested features by building an inadequate architecture that won’t even support the next version of the product." The Hard Thing About Hard Things, p. 179
