In the 1960s, Walter Mishcel conducted a series of experiments that would change the way we look at human potential forever. The experiment involved simply offering a marshmallow to primary school aged children, which they could consume immediately. The trick here, was that the researchers offered an additional reward to the children if they were willing to wait a small amount of time. Of the children in the initial study, about one third waited. Whilst the humble promise of an additional marshmallow doesn’t seem like anything to get worked up about, it was what happened years later that made this so significant.
The same kids who participated in the initial study were contacted for a follow up study 10 to 20 years later. The results were astounding. The kids who waited longer to receive a larger reward were, in essence, killing it. They were smarter, healthier, had happier relationships, better jobs, spent on average less time in prison (a good thing!) than their marshmallow gorging contemporaries. The phenomena resulting from these experiments was called the “delayed gratification” effect.
So how does this effect us? Well, for starters, always be wary of people only eating a single marshmallow 🙂 . But seriously, given the strong correlation with delayed gratification and performance, how can we use this knowledge to great effect in retail businesses?
Without wanting to push the boundaries of “creepy” too much, there are opportunities to find delayed gratifiers in our businesses every day — whether it be new hires or existing staff, these folks have got a high likelihood of being your high performers, so it makes sense to try and identify them as early in their journey with your company. Lets have a look at a couple of the hints we can use in day to day interactions with people to see if they are a slave to their lizard brain or not.
People’s approach to “Money matters” is probably one of the simplest and most pure examples of delayed gratification. The whole concept of money and the “time-value” of money has delayed gratification baked right in.
“I’m willing to forgo a $1 today, for $1.10 in a year’s time” (or in the current economy, $1.0000000001 in a year’s time). This is taught in Finance 101 and is the basis of the concept of interest. How people approach “interest” and deferring spending is one of the great experiments in behavioural economics and can tell you a massive amount about how people’s brains work in relation to delayed gratification — is this person hostage to their own impulses or can they postpone spending (gratification) with the knowledge that they are going to get a greater payoff in the future? So without rummaging through people’s bags for receipts, how can we glean some insight into people’s buying habits?
Credit scores — whilst they usually get used for loan applications, they can be equally useful for determining if people are good at deferring spending, or whether they use credit like it was free money, with no thought for the future implications. Beware though, this data has to be used carefully as people may have a very good reason for bringing forward purchases on credit, so use your discretion. For instance, are they using the money on investments, education and the like ? (other signs of delayed gratification) or to buy a new handbag? or the latest model car?
This one is hardly scientific, so take it with a grain of salt, but everyone knows people who complain about money a lot but always appear to have the “latest and greatest”. Miraculously, bad luck often befalls these people in other parts of their life as well — whilst, yes, people do have bad luck, people who operate like a pinball being bounced around from one impulsive activity to the next often fail to plan for the future, assess future risks and mitigate accordingly.
Another aspect of this is their proactivity around the finances of the company. Do they suggest making pricing changes that will result in greater gross margin? Are they competent with unit economics and think about adjusting different variables in order to maximise future profits? Are they clever about how they use company resources to get the greatest utility out of them?
Hobbies and Skill Mastery.
I’m certainly not suggesting to take a cynical view on what hobbies people choose. Hobbies should be just that, fun pursuits that are stimulating, relaxing and joyful, however, some hobbies are better indicators than others of a leaning towards delayed gratification.
Is there a “mastery” involved with that hobby that takes a great deal of time and dedication to achieve? Not to dis teabag collecting, floral decoupage or whiskey tasting, but you’ve kinda mastered them on day 1. Hobbies like martial arts, developing open source software, golf, surfing, learning a language beat the crap out of you for the first couple of years before you really get anywhere and do/make anything that resembles competency at it. Whilst an absence of these kinds of activities isn’t a deal breaker, they are a great way to determine if people are happy to put in a lot of effort for little up-front payback and a confidence they’ll pay-off in the future. A slight caveat to this one, hobbies can also be a negative indicator. Know people who have a gazillion hobbies they start and never take anywhere ? If you see photos of someone’s garage that is a graveyard of rollerblades, half-finished woodwork, skateboards, kiteboards, welding equipment, frankenstein like car restorations — run, don’t walk away from that person.
Strong link between their “dream path” and their chosen studies, jobs and hobbies.
Lots of people want to be an actor. Less than 1/500 actually “make it” into an acting role, and even then, 90% of actual actors are considered unemployed at any one time. When you dive into the tales of how many actors started out, there is a consistent theme of them taking positions that were not exactly what they wanted to do, but helped them learn their craft and exposed them to the right people that they could sponge off — often for years on end without payoff. If you’ve got a dream of the thing you want to do for a living, most likely, many other people have a similar dream — thus, you’re going to have to fight really hard to get there and delay the pleasure of “winning” for years in some cases. So in our context, has the person made a concerted effort to do the hard things that will give them an edge over other people in what they want to do? Can you map the sacrifices they’ve made in the past in order to “win” a bigger payoff in the future? Are they interested in their job as a paycheque or is it a learning opportunity? It takes ZERO effort to broadcast some lofty goal to people — is this person the kind of person who follows through on that goal or one that constantly vacillates between options, unprepared to play the “long game” and always looking for the quick payoff ?
Whilst this is somewhat of a simplistic view of performance and is by no means a silver bullet, this knowledge can give us an enormous head start in whittling down the top performers who will continue to grow and grow and persistently create new value for your business. So what are you waiting for, rush out and grab that pack of marshmallows now!