How can businesses counteract reckless short-termism?
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How can businesses counteract reckless short-termism?

Author: Ember Television | Posted on: 17 December 2020

The famous marshmallow test showed us that, for many, temptations offered in plain sight are hard to pass up. Even when the reward for doing so is greater, instant gratification seems to be the norm.

Certainly in the world of marketing, it's easier than ever for businesses to fall into the trap of short-term thinking. As marketing writer Les Binet said in an interview with WARC as part of their annual Marketer's Toolkit:

“The addiction to the short-term is not a new phenomenon, but it has got a lot worse. One of the problems is that (for) short-term activities, you get immediate feedback: responses, clicks, or short-term sales … All businesses now have short-term metrics, which can distract them from long-term growth.”

It seems as though the marshmallow test highlighted a fundamental flaw in human decision-making. Yet, in a new book, author Bina Venkataraman postulates that this is not strictly the case. The Optimist’s Telescope sets out scientific evidence and actionable advice behind the claim that future outcomes can influence present actions.

 

reckless short-termism

 

Why do people behave recklessly?

On both a personal and societal level, the author describes modern times as a “reckless age”. This is because the stakes are extremely high for making good decisions: perhaps the most obvious example of this is the climate crisis. Yet, despite its potential to end human life as we know it, political parties have failed to act.

In addition, we now have more tools than ever before to project the outcomes of our actions. It’s perfectly possible to illustrate what will happen as a result of ignoring warning signs. So why do we continue to make reckless decisions for instant gratification?

The author explains that humans respond to that which they can visualise. So, if something is uncomfortable to imagine, it’s more likely that we will want to bury our heads in the sand.

A study by Hal Hershfield illustrated this by exploring how visualising the self in old age affected behaviour towards saving. Using virtual reality, young people were assigned an avatar either of themselves as an elderly person or an avatar of a random elderly person. Those who played as themselves in old age invariably went on to save more for retirement than those assigned a random avatar.

This suggests that it is possible to cultivate an environment and a mindset to counteract the need for instant gratification. So, what actions can businesses take to encourage a more carefully considered long-term mindset, and promote a greater sense of responsibility?


Creating a culture of future-oriented decision-making

The Optimist’s Telescope provides sage advice for individuals and organisations looking to adopt a more effective and responsible long-term mindset.

  • Create rewards for making the right decision.
    This advice is based on what the author terms “the glitter effect”. When she went to support a friend running a marathon, she met them at certain distance markers and showered them with glitter. The friend later thanked her, saying the glitter helped spur them on to the next milestone. The glitter effect could be applied to smaller financial incentives for acting more sustainably, for example. Rewards like this could be a great way to mitigate the fact that these long-term decisions bring no immediate reward in themselves.

  • Look at the bigger picture.
    The author uses the story of a friend who set a goal of increasing her step count in order to lose weight. However, on meeting her step count goal, she found she had in fact gained weight. The reason? Her walks every day took her past a bakery. Herein lies the danger of relying on a single data point to measure success. By looking at the bigger picture, it’s much more possible to see progress towards a specific goal. 

  • View resources as heirlooms.
    Family heirlooms are a precious piece of history that tie us to our ancestors but also to future generations. It’s our duty to care for and preserve them so that we can become another ancestor tied to this heirloom in the future. Viewing natural resources as heirlooms makes buying into the need for longer-lasting and sustainable actions much easier for everyone.

 

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Author: Ember Television

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This post was by an Ember Television guest blogger. For more content from our regular writers, and other guest blogs, check out our blogs below. https://twitter.com/EmberTelevision https://www.linkedin.com/company/1581465
How can businesses counteract reckless short-termism?

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