HALF TIME THOUGHTS, EPISODE 49: SHORT- AND LONG-TERM TRADEOFFS

This week’s Half Time Thoughts were inspired by a LinkedIn article, penned by John Browne, Baron Browne of Madingley—better known to many as the former CEO of BP.

In it, he reflects on a speech given twenty-five years ago at his postgraduate alma mater, Stanford University. That day, he became the first oil and gas CEO to publicly acknowledge a connection between global warming and human-made emissions from the production and use of hydrocarbons. 

His views were widely vilified by industry insiders and lobbyists, but in the years since they have been adapted and adopted, if not accepted, across industry.

The Baron and Me

I have a few things in common with Baron Browne.

We went to the same school—King’s School Ely—which I credit for shaping me as a person and setting me on the path to higher education. 

I turned down a place at St. John’s College, Cambridge, to study chemical engineering at Imperial College London. John accepted his place at St. John’s, studied physics, and went on to earn an MBA from Stanford. 

I was summoned to the headmaster’s office to explain why I was screwing up their statistics

I stand by my decision to choose Imperial over Cambridge, even though I was summoned to the headmaster’s office to explain why I was screwing up their statistics and John has (thus far) got me beaten in terms of knighthoods and peerage.

We both made a career in the oil and gas industry. 

John’s father worked for the Anglo-Persian Oil Company, which became part of British Petroleum (later BP) and encouraged him to take an apprenticeship there. He remained with the corporation, becoming group CEO from 1995 until his retirement in 2007. 

I took a job with Shell upon graduating from Imperial and worked around the world for them until leaving (also in 2007) to join a venture company in which I had led Shell’s investment. I peg my departure from the industry as 2019, when I chose to focus more broadly on business-to-business strategy and marketing.

We also agree on fundamental issues surrounding the world’s dependence on hydrocarbons and the long-term implications of our short-term choices.

The Long and Short of It

John’s LinkedIn piece highlights some things that have been accomplished in the quarter century since his Stamford remarks but points to critical examples of procrastination, delay, backtracking, and denial.

We’re easily distracted by today’s crisis, at the expense of what we know will benefit our planet and our descendants in the long term

As a species, we are highly susceptible to chasing short-term benefits. We’re easily distracted by today’s crisis, at the expense of what we know will benefit our planet and our descendants in the long term.

It’s perfectly understandable. We spent the first 99 percent of our existence as a species under very uncertain conditions. 

Short-term survival entirely trumped any longer-term considerations.

However, for the past century or more, life expectancy has increased dramatically for a significant fraction of the world’s population.

In tandem with consuming exponentially more energy and creating a disproportionate share of human emissions, those people enjoy a predictably safe and healthy life and can afford to contemplate the long term.

More importantly, we—since I am one of them—can afford to do something about the long term.

We enjoy the privilege of choice between short-term and long-term outcomes.

Are they necessarily mutually exclusive? Not always, but often yes.

Getting them implemented will take time, and it will very likely be inflationary. No amount of magical thinking will ameliorate this

As John writes about climate solutions: “There is an obvious balance to be struck between the short-term cost and the long-term benefits. All these solutions are based on hardware as well as software and therefore getting them implemented will take time, and it will very likely be inflationary. No amount of magical thinking will ameliorate this.”

At a time when inflation is at a multi-decadal high and economic recession seems probable, it’s hard to sell anything with a short-term cost and only long-term benefits—especially when there’s disagreement on what those long-term benefits might be.

Practically speaking there is much we can do without spending money.

There is no short-term cost to adjusting our thermostat while we’re not at home or avoiding single-use plastics and other energy profligate consumables.

Though it does require short-term thought and short-term effort—and those might be our biggest challenges.

Being realistic does not mean accepting the status quo, but rather understanding what are the next steps and how long they will take

John writes: “Great words are sometimes needed but targeted and measurable actions are always necessary because that is the way to change things. The impact they have on the world will outlive the words we speak. […] Being realistic does not mean accepting the status quo, but rather understanding what are the next steps and how long they will take. There is, however, always something that can be done now.”

He's talking big picture, corporate actions, of course, but it’s equally relevant to read the same words through a personal lens.

It is sometimes necessary to pontificate and grandstand but taking small, measurable actions is the way we can change things.

As daunting and inevitable as the challenge seems, we mustn’t just accept the status quo. Long-term action is required but there are things we can do now that will make a valuable contribution while the mega-scale solutions are maturing.

Long Odds?

I found John’s closing remark especially thought-provoking: “In the end, it comes down to collective leadership and the conviction that the right thing to do in the short term will, ultimately, pay off in the long term. We simply cannot afford to lose sight of this if we are to build a sustainable future for the planet on which we all depend.”

The world seems short on collective leadership.

The world seems short on collective leadership.

In the US especially, individualism and isolationism have clouded our collective judgement. Time will tell whether that’s a short-term or long-term phenomenon.

There is also a lack of conviction—in the science, in the institutions responsible for producing science and data, and in the institutions and corporations who can act upon that data. 

I wish I shared John’s confidence that we will rise above those doubts and meet the challenge in a timely manner.

My hope is that “this too shall pass”, as the wise men of Persian folklore said.

Two steps forward, one step back.

Short-termism prevails today, distracted by war, disease, violence, inequity, and declining global exuberance.

Tomorrow, I look forward to a more collective commitment to the long term, as nature speaks louder than the naysayers.

Photo by Markus Spiske on Unsplash