In early 2024, business headlines were full of worrying predictions. Softening demand for electric vehicles was raising doubts about the sector’s future. Streaming services like Disney+ were struggling to make a profit, prompting warnings about their long-term viability. Generative AI was about to wipe out a huge proportion of white-collar jobs, according to some stories. And looming over everything was talk of inverted yield curves and the widespread fear that the economy was headed for a recession.
Some business leaders took these headlines to heart. They began slashing long-term initiatives to respond quickly to market conditions. Their experience and intuition told them to prioritize the Now over the Next. And while that may have improved performance in the near term, it may also have been a huge mistake.
Fast forward to today and U.S. EV sales are looking healthy, jumping 12% in the last quarter of 2024. Disney has announced that its streaming business is profitable for the second quarter in a row. GenAI is becoming integral to our jobs rather than replacing workers en masse. And far from falling into recession, the U.S. economy went from strength to strength, with the S&P 500 notching a second year of 20%-plus gains.
The lesson from all this isn’t that bad things don’t happen—they often do. It’s that you can’t let the scary headlines of the moment derail you from your long-term strategy.
In our short-attention-span society, it’s too easy to get dragged into making decisions based on fleeting events. It’s what our brains are wired to do. Studies by my colleagues at Jump and others have found that only about 16% of people have a psychological outlook that’s truly future-focused. The rest of us find ourselves reacting to immediate pressures rather than building for what comes next. And yet, despite our brain wiring, we can all do a little better.
Moment vs. Momentum
Now more than ever, we need to get good at recognizing the difference between a current headline and a meaningful shift—between a passing moment and long-term momentum. Near-term events feel urgent; they dominate headlines and activate the brain’s primal fear centers that help keep us safe from stone-age predators. But they can also distract us from what matters over the long term. Right now, there’s a cold snap in many parts of the U.S. That’s a moment. But make no mistake: the planet is getting hotter. Climate change is real. That’s momentum.
That distinction between moments and momentum helped the most future-focused leaders among us to parse last year’s headlines. It’s true that demand for electric vehicles softened in the first half of 2024. But smart auto execs didn’t pull back. They recognized that we’re going to have more EVs on the road in a decade, not less. Skeptics will point to the incoming U.S. administration’s stated goal of killing tax subsidies on EV purchases, but that doesn’t change the fact that California and 11 other states have banned the sale of new cars with internal combustion engines starting in 2035.
Companies that pushed ahead with their EV plans despite last year’s slowdown are already being rewarded. GM’s decision to double down on electric was validated by a 21% surge in fourth-quarter EV sales, passing Hyundai and making it the second-largest seller after Tesla. Ford, by contrast, announced mid-year it would slash the capital budget it’s allocating to EV development due to a lack of profitability, effectively ceding the lead in EVs to Tesla, GM and others.
Similarly, streaming companies that got spooked by a moment of softening demand have now lost precious ground in a rapidly consolidating industry. Despite Disney+ initially bleeding cash, its leadership doubled down, refined its offerings, and turned a corner. To be sure, streaming platforms may see quarterly losses or subscriber fluctuations, but the bigger story—the shift away from cable toward on-demand, online viewing—is here to stay.
Embrace Macro Forces
I’m constantly advising leaders to avoid predicting the future. Fortunately, preparing for the future doesn’t require you to predict it. There are macro forces playing out right in front of us. The planet is getting hotter. People are eating healthier. America is becoming more diverse. AI is changing how we work. These forces are so large that ignoring them is tantamount to planning for failure.
Take, for example, the recent buzz around Diversity, Equity, and Inclusion (DEI). Trump’s election and the activism of conservative investors have many experts declaring that DEI is dead. But don’t get lost in the moment. Do you think corporate workforces will become more diverse in the next 10 years or less? Companies looking to avoid the distractions of activist investors would be wise to eliminate the DEI label. But demographic shifts mean diverse populations are here to stay. And companies that can attract, employ and engage those people will have a competitive edge. We’re just not going back to a Mad Men world.
Act Like A Wise Investor
Of course, it’s all a question of when. The business landscape is littered with companies who were too early to the game. So don’t bet the farm. Rather, take a page from savvy investors.
One lesson is to use a portfolio approach. After all, you need initiatives that address the Now, as well as the Next. Spend more of your operating expenses on the Now priorities. Invest more of your capital expenses on the Next. This approach forces you to allocate resources to both sides of the ledger—ensuring you’re not starving future growth in pursuit of short-term stability or undermining the business’s foundations by betting too heavily on one future outcome.
Tesla, for example, is all-in on an EV future. They’ve continued to make large investments in battery technology and production. At the same time, they responded to softening demand last year by cutting prices on popular models. They still fell short of sales growth expectations. But that’s news from the moment.
Another lesson to take from savvy investors is to avoid panic selling in response to volatility. A few years back, wealth management giant Fidelity Investments conducted a study of their best-performing accounts. One thing stood out about many of their best investors: They were all dead people. It turns out that accounts owned by the deceased outperformed those of the living over a 10-year period because they were immune to short-term plunges (and everything else!) The same principle applies in corporate strategy: if your entire plan falls apart the moment you see a dip in sales or a negative news cycle, you’re going to be a victim of fate rather than in command of your own. Throwing out your long-term strategy in reaction to a bad quarter is the equivalent of confusing weather with long-term climate.
By their nature, periods of volatility don’t tend to last that long before things return to the mean. Take that scary recession that never showed up. Even if it did, it would have been a moment. Since World War II, U.S. recessions have only lasted an average of 10 months. The last one lasted two months. That’s a blink of an eye when trying to balance the Now and the Next.
Filter Out The Noise
Some of the most future-focused leaders I know are working to balance the Now and the Next as they plan out the coming year. It’s a core responsibility they have to their investors, customers, and employees. They also have to communicate their vision for the future clearly so that stakeholders can see why it’s worth enduring periods of difficulty.
Make no mistake, there are plenty of things to worry about, from potential trade wars to intensifying global instability. A useful exercise to help filter out the noise is to write down all the things that could affect the business in two columns—one for Now and the other for Next. The items in the now column shouldn’t be allowed to distract from long-term strategy, which is not to say they might not need attention. Items in the next category may demand a reevaluation of your strategy if they’re not already baked in.
Leaders need to accept that blips will happen and will need to be addressed rather than ignored. But this should be in the form of adjusting the dial rather than ripping apart the engine. And we all need to dedicate regular time to identifying macro trends and playing out various scenarios for what might happen.
Reflect back to the start of last year on how many of those seeming emergencies and fears turned out to be overblown. It’s clear now that those headlines didn’t represent the real risks. Those risks—and their opportunities—lay in the currents running beneath them.