Jeff Bezos wrote his first letter to Amazon shareholders in 1997. Amazon had just gone public and Bezos told investors he would be making decisions for the long term and that short term Wall Street reactions would not influence his direction and decisions for the company. In 1999, Barron’s put “Amazon.bomb” on its cover. By late 2001, Amazon’s stock suffered a major fall. It plummeted below $6 per share. Investors were not happy. But Bezos kept building warehouses, improving Amazon software, and working on customer trust. And he attached his first 1997 letter to every annual report. He wanted investors to trust his long term vision.
With his long-term ideas and principles for making Amazon work and delivering on investor expectations, Bezos invested in a system to make his company thrive. These are four things you need to become a long-term thinker yourself.
1. A specific time horizon
Long-term thinking is almost always useless if it’s ambiguous. That’s why you need to pick a number. You could start with five years. Or ten years. Any number that works for you. Now write that number in a notebook and tie it to your goal. Bezos linked Amazon’s long-term success to market leadership and consistent customer trust. You can use the same approach or principle for your life or career. What do you want in your life? What are your future career goals? Are you working towards a specific health goal? What’s your goal at your present job? Where do you see yourself in the next five years? You only need to know where you are going. Have a number in mind for when you want to get there, but aim to get back to the actions you need in the present.
Next, take it further by writing down the outcome you want. Then use it as a filter. Every opportunity then goes through that filter. A few bad months shouldn’t be a problem if you are building your capacity or accumulating wins towards your bigger goal or building a better foundation for what you want in life. If you are investing in an asset, time is your friend. Make it work for you. The feeling that in the short-term things are not working out might not hurt so much. You just need to keep your head up and focus on the bigger goal.
Make today’s work serve your five-year goal. Don’t get distracted. Do what you must, knowing you are on the right path.
2. The guts to look wrong
Long-term thinking may not make sense in the short-term. You will doubt yourself. People may not take you seriously. Bezos was mocked for his attempt to dominate e-commerce. Many analysts called Amazon a massive failure. The stock collapsed. Investors were worried. Many sold their shares. In the short-term, things were not working. The company was failing. He could have panicked and changed course, but he kept his focus on what mattered. His long-term goal.
He had to separate short-term decision quality from the long-term expectation. A good decision can give you a bad result in the short-term. A bad decision can lead to a good outcome in the long-term. It doesn’t mean all is bad right now if you know where you are going. The only thing that matters is your internal process to get what you want.
Keep a decision journal. Write down what you decided, why, what you expected, and when you will review it. This does two things. It protects you from the dreaded hindsight bias. And it exposes action stubbornness. You are making sure you don’t ignore the facts. Long-term thinking improves the process when the facts change. Bezos started with books. Today, Amazon sells so much more. He kept the time horizon in mind and stuck to his long-term goal. He changed the process and adapted. A vital step.
But when you are committed to your long-term goal, you may look wrong for years. Amazon lost money for years. Many investors and financial analysts wrote Bezos off. The company survived because he tied success to a specific time horizon. And he had the guts to keep going even when things didn’t look good.
3. A simple process for deciding when to say no
Long-term thinking is mostly a process of subtraction. Every yes or action you commit to the short term spends future time. That’s why it’s so important to make sure you are not saying no to your long-term goal. Every yes shouldn’t take you away from your focus. Warren Buffett once said, “Really successful people say no to almost everything.” He aggressively protects his time. Build a no defense mechanism to stay on the path. Make a stop-doing list if you have to. Write down the things you will not do or commit to in the next quarter or however long you review your process.
Use your yes for the tasks, experiences, activities, and things that fit your specific time horizon. Protect your calendar and your most valuable commitments. You could reevaluate the tasks every three months. Are they all serving the bigger goal? The practical cost of a yes is the best thing you could have done with that time. Ten years of one hour a day spent on low-value work is thousands of hours wasted that could have been spent differently, to your advantage. Choose your yes carefully.
4. A review loop that survives boredom
Long-term thinking will feel boring. And draining. That’s why most people quit. The beginning is exciting. The messy middle takes guts. The compounding process of gathering wins takes time. Sometimes it’s invisible. You will most likely think you are wasting your time. You will need a productive review process for the ups and downs. Bill Gates used to schedule personal “think weeks” at Microsoft. He went to a cabin, read papers, and made time to think. Plan a recurring appointment with yourself to check in on your bigger goal. Start small. Define and stick to a review process you can sustain.
Maybe thirty minutes a week. Use it to find answers for difficult questions. What did I do right? What served no purpose in the last three months? What am I pretending to know that I don’t? What will I stop doing, continue, or start this month?
A few times a year, take a half day to reflect on your actions. Review your time horizon. Check your inputs. Adjust your process if you must. Of course, you cannot control your output. But the daily actions are completely in your control. If you want to think clearly, track how the ideas you applied made an impact. Or how they are helping you achieve what you want. Not the number of books you read to make you a better person. But the actions you put to work and how they are working for you. If your bigger goal is financial security, focus on your savings rate.
Measure how your investments compound in your investment portfolio. It will inform your next saving decision as you get closer to retirement. Do the review work to know when you are lying to yourself. The way you do it doesn’t matter. You can practice your review with a digital or physical notebook. It can be a spreadsheet. The tool doesn’t matter. But the process is valuable. You need it to catch your bad apples early.
A review loop shows you the wrong tasks and activities before they become a decade of spoiled fruit. Long-term thinking is a habit of returning to the process and doing more of what works and less of what doesn’t. It’s how you stay on track and true to yourself when the outcome you want takes time.
