cdixon blog

“It’s pretty difficult to solve big problems in four years”

Larry Page:

When I talk to most companies, I do think their leaders are pretty short-term focused. Imagine you’re running Exxon, what do you do? Say you want to do something good with the most valuable company on earth. A lot of people think probably, it’s not doing good things – worried about the environment and so on. But if the company has a lot of capabilities–worldwide operations and manufacturing, government relations, probably could do a lot different things, if you took a 20-year view.

If you took a four-year view, that’s a pretty hard question to answer. What are you doing in the next four years, which I think is about the average tenure of a Fortune 500 CEO. So if you’re being measured quarterly– obviously, it’s good to have some pressure so you actually do things, make money and improve things. But I think the four-year horizon for leaders is pretty difficult.

It’s pretty difficult to solve big problems in four years. I think it’s probably pretty easy to do it in 20 years. I think our whole system is setup in a way that makes it difficult for leaders of really big companies. Eventually, what you’re doing doesn’t makes sense over time, for whatever reasons – environmental or social or whatever it is. I think companies have a big problem making a big transition, so leaders get replaced.

A huge advantage of companies like Google, Facebook, and Amazon is that they have CEOs with the gravitas (and, sometimes, control provisions) to operate on a very long-time horizon.