Rana Foroohar: Earnings Over Innovation

Posted by admin on Wednesday, July 6, 2016

Rana Foroohar Money Quote saying business leaders prefer financial results above investing in product innovation. Rana Foroohar said:


“80 percent of CEOs surveyed in one study said they’d pass up making an investment that would fuel a decade’s worth of innovation if it meant they’d miss a quarter of earnings results” — Rana Foroohar


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In this quote, Rana Foroohar is sharing the results of a survey that asked CEOs about prioritizing long-term innovation versus short-term earnings goals. The survey found that 80% of CEOs said they would abandon investing in a project that could spur a decade of innovation if it meant missing their earnings targets for just one quarterly financial report.

This suggests many corporate leaders are overly focused on delivering profits in the immediate short-term, even if it comes at the expense of funding potentially game-changing innovations that may take years to materialize returns.

Foroohar appears to be critiquing an overly narrow emphasis on quarterly earnings among CEOs that could undermine long-term growth and competitiveness for the sake of temporary Wall Street satisfaction according to this interpretation.

This quote from Rana Foroohar suggests that many CEOs prioritize short-term earnings results over long-term innovation and growth. The study she cites found that 80% of CEOs surveyed would choose to forgo an investment that could fuel a decade of innovation if it meant missing their earnings targets for the current quarter.

In other words, most CEOs are more focused on hitting their quarterly numbers than making investments now that may not pay off for many years but could significantly boost the company’s future success and competitiveness over time. This indicates a bias toward short-term thinking among many corporate leaders according to the perspective expressed in this quote.

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