Companies around the world increasingly complain that financial markets focus on quarterly results and give little credit to longer-term value creation strategies, particularly those that depress today's profits.

Such claims must be challenged. They are not only contradicted by empirical evidence but also do nothing to improve corporate performance and investor returns. If anything, they undermine confidence and trust in markets.

Whatever the cause of the misconception, management teams should take the lead in correcting it. They need to make clear to their boards and to the capital markets the importance to long-term value creation of both the short-term performance of a business and its underlying health—that is, its ability to sustain and improve performance year after year after year. They also may need to manage their companies differently.

There is undoubtedly a noisy segment of analysts and traders fixated on next quarter's earnings. It's only natural that analyst and investor conversations will focus on the latest quarterly results, because they contain a significant amount of objective and reliable information about long-term performance. Also, they are news, and that moves markets. But many management teams, apparently believing that all market participants behave this way, don't attend to the longer-term...