Every July 1st, the NY Mets pay Bobby Bonilla over one million dollars. They've been doing so for the past 9 years, and this yearly windfall for Bonilla will continue all the way until the year 2035 when he is 72 years old. Bonilla last played for the Mets in 1999, and hasn't suited up for a major league baseball game since 2001.
Bonilla doesn't have to swing a bat, make appearances, or do anything for his yearly compensation. It's the result of a decision made the Mets in 1999. The Mets were ready to part way with Bonilla but there was still 6 million dollars left on his contract. Instead of biting the bullet and paying that off to get rid of Bonilla, they negotiated a deal that would defer payment until 2011. The catch? Bonilla's agent negotiated an 8% interest rate on the deferment. By the time it got to 2011, that 6 million had ballooned into 30 million to be paid off at 1.2 million a year for the next 25 years.
Talk about the ultimate retirement gig.
Baseball is a great example of the short term mindset. Teams overpay an aging star in hopes of one last magic season or they mortgage their future by trading for a star to "rent" for less than half of a season. Not surprisingly, we see the same short term thinking in the corporate world.
Neglecting or firing individuals for the sake of saving a few dollars which seems important, but might kill the culture. We micromanage talent determined to make sure they don't make one single mistake, but ultimate push them to other offices or occupations instead of allowing them to fail and grow. Or in the education sector, we spend millions on the flashy new tech, while neglecting the biggest factor in student success; those who teach them.
Part of the problem is we judge CEO's, bosses, and teams not based on where they will be a decade from now, but what they are doing right now. We incentivize the short term.
It's tempting to fall trap for the short game. Maybe your job is determined by monthly sales or performance reports. But whenever we fall trap for only worrying about the hear and now, we start taking short cuts and skipping steps. "Letting someone else worry about that" in the future. Such a mindset and culture leads to problems that will grow and spread among whatever team or workforce you are a part of.
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