The Balancing of Short and Long-term Business Strategies Paves the Path to Success
How do you balance your commitment and execution of your short and long-term business strategies? How well do you communicate these strategies to your company and stakeholders?
These two things are critical when it comes to paving the path to success and there is no better example of this than CSL’s CEO and Managing Director Paul Perreault.
I recently came across a brilliant article in the Australian Financial Review highlighting CSL Ltd’s recent acquisition of Swiss pharmaceutical manufacturer Vifor. Despite CSL being our largest and most successful supplier of global blood products and vaccines, it is the man in the driver’s seat that interests me, and his key principles around building trust in business relationships and why long-term business strategies are paramount to any organisation.
While news of this acquisition first came to light in December last year, it is only recently that Perreault revealed his vision. Normally this could cause angst for stakeholders, yet during that time, CSL’s shares continued to perform in the midst of an unstable market and shareholders remained patient, why?
I believe this is attributed to Paul Perreault’s commitment to building trust amongst his stakeholders and the openness of his communication, admitting that he has always tried to be open and honest about CSL’s direction. His approach highlights why it is crucial to build trust with stakeholders and employees within an organisation.
It is not only the trust factor that has contributed to CSL’s success. As their company grew from 11,000 employees to 32,000, and their share price has almost doubled over the last 5 years. Their success has also been built upon Perreault’s focus on, and commitment to a long-term business strategy, in their case a 10 year plus strategy which concentrates on the key drivers and opportunities for the business.
When discussing the acquisition, Perreault said: “Vifor Pharma enhances CSL’s patient focus and ability to protect the health of those facing a range of rare and serious medical conditions. The Vifor business adds near-term value along with a clear path to long-term sustainable growth."
In other words, they take a long-term approach to their strategy, and they stay true to it!
While the day-to-day success of Vifor is overseen by his COO, Perreault’s main focus is spending time with his senior leaders to ensure the alignment of their long-term 2030 strategy. ‘‘What I’ve had to do is continue to focus on the key drivers of the business and the key opportunities that we have to continue this 10-year plus strategy,’’ Perreault says. ‘‘That’s where I focus my efforts. I grew up in the business, so there is a tendency sometimes for me to want to dig in and run the business. But I have to let other people do that, because the only way I’m going to be able to absorb this myself is to not get in the way.’’
Being so discerning about where he spends his time and ensuring that he trusts his team and challenges himself to be only where he can add maximum (enterprise) value is a key lesson for any senior leader or CEO.
He also goes on in the article to talk about how a business strategy is not static, but a continuum, and writing a strategy to just leave it on the shelf doesn’t help the business move forward. Arguably it is also the short-term focus or lack of vision that fails to excite, inspire and engage people, and results in major retention issues.
The success and growth of the business clearly demonstrates that CSL's strategy is not static, it does NOT sit on the shelf and is brought to fruition with very strong execution disciplines that come from the top down.
It is clear that Perreault is a forward thinker that carefully considers the way short, medium and long-term strategies conflate. He champions the fact that long-term business strategies are critical to ensuring that today’s investment in research and development generates the profits of tomorrow.
For more insights like this direct to your inbox, click here to subscribe to our newsletter.