The Science of Big Picture Thinking
You can have one marshmallow now. Or you can wait alone in a room — avoiding said marshmallow — for ten minutes. Then you can have two.
This much-repeated Stanford experiment has been causing the deepest, most forlorn anguish in kids since the 70’s. Which would you have been? The sly biter? The licker? The shove it in right away? Even now I’m not sure that marshmallow would last 5 minutes.
https://www.youtube.com/watch?time_continue=1&v=QX_oy9614HQ
The test illustrates ‘present bias’ — a tendency for us to over-value the here and now. And if you have a problem that’s human-based, it’s probably got a part to play. Pension deficit? ‘Let’s go on holiday instead’. Obesity crisis? ‘Oh, pass me another piece of cake’. Safer driving? ‘It wasn’t red, it was amber’. And it affects our working lives more than we’d like to admit…
- Yes, she’s a better fit for the job, but she’s not quite ready. This guy’s been doing it for our competitor for 5 years.
- It’s a great investment, but we need to put it into next year’s budget. We’ve got to hit those 16/17 numbers.
- We can’t afford to change the way we do it. We’re way too busy.
Nom, nom, nom. Surely we’re not so weak? Well, it’s easy to point at individual willpower as the cause of short-termist decision-making, but the institutions in which we’re placed hardly help. Quarterly shareholder meetings. Bi-annual performance reviews. Leaders breathing down our neck for the ‘quick win’. The people at the top love a marshmallow as much as the next guy, and the odds are stacked against us.
So how do we help each-other make better choices? How do we support people to choose their well-being over staying late? Take a short-term hit on that long-term hiring or investment decision? And push themselves to make the time for self-development? Richard Thaler — of ‘Nudge’ fame — points at three hurdles we need to overcome to influence behavioural change:
- Inertia — a bias for inaction and stasis
- Loss aversion
- Self control
He’s not just a talker. Remember that little problem about us all living longer and not being able to afford it? Thaler has some answers…
We knew our pensions were important but many of us couldn’t be bothered to fill out a form. That’s inertia. And he solved it by suggesting an automatic opt-in to our employer’s scheme. The UK implemented the policy as mandatory last year (remember those ‘we’re in’ adverts?), and only 12% of us made the decision to decline. Simple as that.
The other two obstacles are overcome with more devilish smarts. None of us want to contribute 5% extra to our pension because our paycheck will go down. It’s loss aversion. But we have more self-control when we’re focused on the future. So Thaler suggests that we agree to automatically align the increase with our next pay-rise, so we don’t feel the loss. AND we agree to raise the contribution again every pay rise after that. Turns out we’re totally up for that.
This ‘auto-escalation’ is still in early adoption phase, but it’s already having a staggering impact in the US. Four million people signed up in 2011, and two years later they were contributing an extra $7.6bn to their future. It’s easy to think of that in abstract financial terms, but that’s four million people who can live better in retirement. Help their children buy a home, or go on that adventure they’d always dreamed about. All because their employers cared enough to re-frame the way their options were presented.
These answers won’t solve most of our workplace challenges, but we need to overcome exactly the same cognitive hurdles to find those that will. As leaders and HR professionals, we have the chance to help people make better longer-term decisions. We have the opportunity to create organisations that are built by looking decades into the future.
We just need to help people hold out for the second marshmallow.
This article was originally published on our MoreThanNow’s Insights page
