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How Can Leaders Do Better On The Marshmallow Test?

How Can Leaders Do Better On The Marshmallow Test?

Simply put, the marshmallow test assesses children’s ability to delay gratification. Designed to gauge willpower, it has since morphed into something of an online sensation. In this experiment, a researcher places a marshmallow in front of a child, on the understanding that if they don’t indulge, they’ll get twice the treat. The researcher then exits the room for some time (15 – 20 minutes), leaving the child to either succumb to or defy the temptation. Type “marshmallow test” in a youtube search and you’ll get images of children desperately holding out for their promised reward, the difficulty telling in their faces. 

The study shows that children who can self-regulate and delay gratification tend to do better in school and life generally.

Delayed gratification is not a challenge that only children face. Indeed, it is an integral part of the human condition. There is nothing inherently wrong with instant gratification. The issue is that, much like the marshmallow experiment, it often forestalls more benefits further down the track. This predicament has many variations, some more subtle than others. 

Leaders Vs The Marshmallow Test

Even leaders have to navigate the tensions between instant and delayed gratification. But there’s a twist in how it presents, and the decision is not always black and white. There’s an element of grey. 

Consider this familiar tale. An issue that still plagues multinational conglomerates is the work conditions that their offshore labour force is subjected to, typically in developing markets. While this is more pronounced within textile and food supply chains – where child labour and hazardous factories are rampant – the phenomenon is not exclusive to these sectors.

Although activist groups continue to voice these concerns, it is tempting to place profits over supply-chain reform in the longer term. Business leaders often struggle to decide which stakeholder interests to prioritise. Not an easy balance to strike. Taking a long term view would pacify customers and activists but at the shareholder’s expense. Moreover, the benefits of a long-term view are difficult to measure and therefore justify. How do you quantify trust or a vote of confidence? Profits would seem like a much simpler, more straightforward, and gratifying path to take in the short term.

This type of ethical dilemma brings the marshmallow effect into focus. It is a major friction point in decision-making, showing up in an ever-expanding array of guises. Other ethically polarized spheres of business decision-making include climate change, inclusive hiring and honest marketing. But ethical dilemmas are not the only ways that the tensions between instant and delayed gratification manifest. 

Another (perhaps more classic) example of this phenomenon is businesses that display a level of risk aversion that stifles innovation and growth. As a result, only incremental gains – within the scope of short term planning – are ever made. This mindset precludes the leaps that come with longer-term thinking. The growth investment is hard to justify in the short term. In a striking display of missed priorities, mediocrity can feel like prudence.

A Mckinsey study of 615 publicly listed US companies from 2001 to 2015 found systematic evidence that a long-term approach can lead to superior performance for revenue and earnings, investment, market capitalization, and job creation. The results are shared in an article aptly titled: Where companies with a long-term view outperform their peers.

Finding Balance

A long term view would seem more plausible in comparison. But could the framing of different perspectives as mutually exclusive be a part of the problem? After all, there is no universal stencil for decision-making. And the more intractable the problem is, the more comfortable decision-makers need to be with ambiguity and (frankly) greyness to master it. 

Like instant gratification, there’s nothing inherently wrong with short term thinking. Indeed It’s ideal for taking advantage of opportunities in real-time. There are, however, certain incidental benefits to longer horizons, which are often (and notably) beyond reach in the short term. These include a sense of clarity and direction. You may also recognise these as benefits of good leadership. And so it’s not that short term thinking is fundamentally flawed, but on its own, it leads to mindless opportunism, a hazard in its own right. 

I believe the best way to straddle both viewpoints is to calibrate short and long term goals using key priorities. This forces leaders and managers to reflect on what long term goals look like in the present. It also helps resolve the questions of what is relevant and why. 

From Apple’s Playbook

Within the group of top five tech companies popularly known as FAAMG, the Apple brand stands out. With every new product, they have boldly reimagined the role of technology, often creating entirely new categories in the process. Sometimes this has been a miss (remember the trash can), but overall, their batting average remains enviable.

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True to character, they’ve been pioneering again. Last year, Apple released a new type of processing chip with astounding capabilities, the M1, casually revolutionizing the sector in the process. This year, they’ve added even more computing power to this lineup with their newly announced M1 Pro and M1 Max chips. These technical marvels are still shaking up the tech community, but it’s Apple’s brand character that interests me.

For all their innovation, Apple as a company says no to a lot of ideas, perhaps more times than yes. For example, they’ve infamously refused to bring desktop software capabilities to their iPad Pro devices, a move pundits argue effectively caps their usefulness. In like manner, they’ve not obliged requests to add touchscreen capabilities to their desktop (Mac) product lineup, despite their competition creating “hybrid” laptops that bridge desktop and tablet markets with a 2 in 1 form factor. Apple could have moved to take advantage of these short-term opportunities years ago, but they left them on the table and moved on. 

Here’s why this all matters. If the Apple story teaches us anything, it’s that

relevance is not always popular in the short term.

As a company, Apple is clear on who they are, and what they stand for. This clarity anchors their thinking in every way, enabling them to take on ideas that add value to their proposition. 

And lately, even the fiercest critics are applauding Apple’s achievements.

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