Governing in the Long Run

All of the conclusions reached in Chapter Two about how formeteurs create organizations to advance short- and medium-term goals also apply to cases in which formeteurs attempt to advance long-run goals. Organizations created to advance long-term goals have to overcome the same recruiting, motivational, and adaptation problems, which imply that they will have recruiting, reward, and governance systems that are fundamentally similar in most respects. Formeteurs that found organizations to advance long-term goals confront similar problems, and many of their solutions will also be similar. Formeteurs of such organizations, for example, are likely to be aware of the difficulties of robust organizational designs. Thus, they are likely to pay even more attention to best practices when selecting governance and reward systems.

There are, nonetheless, significant differences between organizations designed to advance long-term goals and those expected to be short-lived. Perhaps the most obvious of these is that durable organizations will outlive their founders. In the long run, formeteurs will necessarily turn over policy-making authority to successors of one kind or another. It is also likely that procedures of governance and other standing policies will require somewhat larger adjustments in the long run than in the short run because unfamiliar (low probability and new) circumstances are more likely to be experienced in the long run. Other members of an organization’s governing team (and their successors) will also need to be replaced.