In today’s climate of economic volatility and heightened scrutiny of short-term thinking, an increasing number of high-performing companies—especially those considered “gold standard” firms—do not provide quarterly earnings guidance. It’s a move that’s quickly becoming the new norm, as CEOs and investors alike acknowledge the futility of forecasting in an unpredictable environment.
But this shift isn’t just about reacting to economic uncertainty. It reflects a broader understanding: quarterly profits are inherently difficult to predict, and obsessing over them often does more harm than good. The flaws in quarterly guidance are well-documented. Beyond being a poor predictor of actual performance, it can encourage risky, short-sighted behavior. When companies feel pressured to meet quarterly targets, they may cut corners or engage in short-term tactics that undermine long-term value creation. These actions might appease the market in the short term, but they distort business fundamentals and distract leadership from building sustainable growth.
Research from FCLTGlobal underscores this dilemma. The majority of executives say short-term market pressure skews decision-making and ultimately destroys value. In response, a growing number of companies are abandoning the quarterly forecast treadmill and replacing it with something far more strategic: the long-term roadmap.
Long-term roadmaps offer a more meaningful narrative about where a business is headed. They focus on the key economic drivers of performance, connect to management’s multi-year vision, and align with carefully selected KPIs that matter over time—not just for the next earnings call. Rather than attempting to predict the next 90 days, these plans articulate how the company plans to allocate capital, grow market share, and maintain its competitive edge over years, not quarters.
This isn’t just a communications tool; it’s a strategic advantage. A well-constructed roadmap provides investors with a clear picture of the company’s operating model, long-term goals, and performance expectations across critical financial and operational dimensions. It shows that long-term investors want to hear what differentiates this business, how it plans to win, and how it defines success over time.
“Long-term roadmaps offer a potential bulwark against short-term pressures. In our study, 100 percent of investors said they either always or occasionally encourage companies to share their long-term plans. More than 86 percent of investment decision makers say they want metrics oriented toward expected performance at least three years out.”
– FCLTGlobal. Driving the Conversation: Long-Term Roadmaps for Long-Term Success
The takeaway is clear: long-term roadmaps aren’t just investor-friendly—they’re becoming investor-expected. They provide a way to push back against short-term noise and reinforce a company’s commitment to durable value creation.
As markets grow more complex and investor expectations more sophisticated, forward-thinking companies are embracing a new model of corporate transparency—one that doesn’t hinge on short-term forecasts. The best-performing companies are proving that clarity of vision and a long-term mindset aren’t just nice-to-haves—they’re essential to enduring success.
Press Release
30 September 2024 - In an era marked by rapid economic shifts, the need for long-term decision-making has never been more evident. FCLTGlobal has developed the FCLT Gold Standard to answer the question, “What does it mean to be long-term?”
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23 October 2017 - Since 2005, research has consistently found that the vast majority of corporate executives think that short-term pressure is growing, that it is changing their business decisions, and that those changes are destroying value. One effective way that corporations are combating this phenomenon is by moving away from quarterly earnings per share (EPS) guidance and instead providing investors with a long-term road map focused on the fundamental economic drivers of the business tied to management’s outlook on critical key performance indicators (KPIs). As we highlighted in our...