Quanta Corporate Citizenship ‘It is not human nature to think long term’. This comment was made in a recent lecture by Dr. Spencer Wells, the Explorer in Residence for the National Geographic Society and the former director of the Genographic Project. His comment was based on studying the patterns of behaviour from our evolution as hunter-gatherers and our concern for survival on a day-to-day, season-to-season basis. Embracing behaviour to have impact as far in advance as 100 years had little role to play in our evolution when we may not have survived the perils lurking around tomorrow’s corner. In short, if we need to learn to think about the long-term, we first have to overcome tens of thousands of years of naturalised behaviour. That's a daunting starting point, cleverly captured by Wood Allen in the quote used as the title of this article.
The ’present bias preference’ is not a new concept for us and the term is one well used by behavioural economists. Some say that 46% of all behaviours are purely habit bound. Furthermore, Teresa Marteau, a professor of health psychology at Kings College London, has demonstrated through her work that short-term behaviour shows signs of social bias that can be linked to particular contexts. For instance, her research has shown that young children, lower socio-economic groups and individuals with addictive behaviours are more prone to short-term behaviour than others. Young children find it far harder to say ‘no’ to a sweet now when two could be rewarded next week, whilst older children can do so because they have had time to learn the proportional value of a little patience. Lower socio-economic groups also find it harder to respond to long-term incentives – for example, saving schemes – because they may have larger proportional short-term needs to respond to. And those individuals with addictive behaviours, such as smoking, gambling or drinking, are also more orientated towards the short-term and its rewards than any long-term health benefits of giving up smoking.
So with genetics and a range of contexts acting against our interests to become more long-term orientated, what are the solutions?
We can see examples around us already where we are provoking a change in context and habit. The more traditional solutions for this problem focus primarily around changes in legislation and policy to shape behaviour. Think about the level of tax applied to cigarettes and alcohol, and smoking bans in public places. Or think about bonus systems given in the finance industry. This type of policy works when individuals can be persuaded to change their behaviour because of the positive or negative consequences imposed on them.
But if we remember that genetically, we are prone to short-term behaviour, what do we do when it isn’t possible to offer incentives or punishment by legislation, or when those incentives are too expensive for society, or when checking for compliance is just too expensive, or when they would create unintended segmentation among different groups? Think about speed limit fines: wealthy individuals actually are less affected by them than poor individuals. Or think about the cost of monitoring elections in countries with unstable democracies.
Likewise, introducing excessively heavy compliance and policing of business makes any business model bureaucratic and sluggish. In other words, companies want to shape behaviours, but introducing and maintaining instrumental (reward/punishment) methods of compliance is just too expensive for them, and represents a cost, not an asset.
This is when we should turn to look at both individuals and organisations’ value systems. When people’s values extend beyond what they can receive or benefit from tomorrow; when they don’t need to be coaxed into a behaviour, but they act in certain ways because they simply believe the desired type of behaviour is important and in their best interest, then we start to see an evolution in thinking that remains resolute to focus on the future when faced with temptation for instant gratification.
In short, focusing on normative (social/group acceptance) rather than on instrumental (policy & policing / reward & punishment) drivers offer a lower cost mechanism to create human compliance and move human focus to the long-term consequences of our behaviours.
Changing value systems in our societies and in our businesses is no easy task, but in the survival of the fittest, evolution of businesses means that those companies able to implement coherent value systems and adapt their culture to incorporate long-term thinking and behaviour create a tangible competitive advantage for themselves: it is simply cheaper for them to manage and supervise their staff and create an environment where there are fewer cases of deviation from the expected/desired bahaviour.
- Kim
The ’present bias preference’ is not a new concept for us and the term is one well used by behavioural economists. Some say that 46% of all behaviours are purely habit bound. Furthermore, Teresa Marteau, a professor of health psychology at Kings College London, has demonstrated through her work that short-term behaviour shows signs of social bias that can be linked to particular contexts. For instance, her research has shown that young children, lower socio-economic groups and individuals with addictive behaviours are more prone to short-term behaviour than others. Young children find it far harder to say ‘no’ to a sweet now when two could be rewarded next week, whilst older children can do so because they have had time to learn the proportional value of a little patience. Lower socio-economic groups also find it harder to respond to long-term incentives – for example, saving schemes – because they may have larger proportional short-term needs to respond to. And those individuals with addictive behaviours, such as smoking, gambling or drinking, are also more orientated towards the short-term and its rewards than any long-term health benefits of giving up smoking.
So with genetics and a range of contexts acting against our interests to become more long-term orientated, what are the solutions?
We can see examples around us already where we are provoking a change in context and habit. The more traditional solutions for this problem focus primarily around changes in legislation and policy to shape behaviour. Think about the level of tax applied to cigarettes and alcohol, and smoking bans in public places. Or think about bonus systems given in the finance industry. This type of policy works when individuals can be persuaded to change their behaviour because of the positive or negative consequences imposed on them.
But if we remember that genetically, we are prone to short-term behaviour, what do we do when it isn’t possible to offer incentives or punishment by legislation, or when those incentives are too expensive for society, or when checking for compliance is just too expensive, or when they would create unintended segmentation among different groups? Think about speed limit fines: wealthy individuals actually are less affected by them than poor individuals. Or think about the cost of monitoring elections in countries with unstable democracies.
Likewise, introducing excessively heavy compliance and policing of business makes any business model bureaucratic and sluggish. In other words, companies want to shape behaviours, but introducing and maintaining instrumental (reward/punishment) methods of compliance is just too expensive for them, and represents a cost, not an asset.
This is when we should turn to look at both individuals and organisations’ value systems. When people’s values extend beyond what they can receive or benefit from tomorrow; when they don’t need to be coaxed into a behaviour, but they act in certain ways because they simply believe the desired type of behaviour is important and in their best interest, then we start to see an evolution in thinking that remains resolute to focus on the future when faced with temptation for instant gratification.
In short, focusing on normative (social/group acceptance) rather than on instrumental (policy & policing / reward & punishment) drivers offer a lower cost mechanism to create human compliance and move human focus to the long-term consequences of our behaviours.
Changing value systems in our societies and in our businesses is no easy task, but in the survival of the fittest, evolution of businesses means that those companies able to implement coherent value systems and adapt their culture to incorporate long-term thinking and behaviour create a tangible competitive advantage for themselves: it is simply cheaper for them to manage and supervise their staff and create an environment where there are fewer cases of deviation from the expected/desired bahaviour.
- Kim
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