The Long-Term Mind-Set in Times of Short-Term Hysteria: Part Two
Before examining the times in which we live, it is useful to briefly reflect on some basic psychology. How does the brain form thoughts and make decisions? According to the Nobel prize winning psychologist Daniel Kahneman’s research there are two cognitive systems in the brain:
System 1: Fast, automatic, frequent, emotional, stereotypical, subconscious
System 2: Slow, effortful, infrequent, logical, calculating, conscious
We use System 1 for most of the decisions in our lives. System 2 thinking needs time, focus, deliberation, analysis and a lot of effort. Kahneman’s research shows that the busier we are the more we stick to System 1 thinking, even when it would be better to use System 2 for a certain task.
I sometimes ask people in workshops to describe the times in which we live with one word. The most common answers are: ‘fast-paced’, ‘dynamic’, and ‘emotional’. These are the exactly the words which describe System 1 thinking.
I would argue that we live in a ‘System 1 society’. We are busy and continuously distracted. If you would like to test yourself: when was the last time that you really were bored and had nothing to do? Or: when was the last time you saw a person over the age of 12 who was completely bored? This is a fundamental change in human behaviour. We are constantly on, constantly multitasking and very much focused on the next email or Facebook update.
The psychological term for getting what you want right now is instant gratification. Author and researcher Paul Roberts has written a book on the subject, The Impulse Society, in which he concludes that ‘our entire consumer culture has elevated immediate gratification to life’s primary goal.’ Waiting is hard for the brain; and System 2 thinking takes effort too. What we see in the 21st century is that our brains are getting more and more of what they want instantly, thanks to technical and societal developments. As a result, our brains have become accustomed to instant gratification — the more they get, the more they want.
How did we get caught up in a situation in which we indulge in life’s short-term temptations at the cost of our long-term goals? There are three main factors:
The biggest distractor and short-term thinking booster is right in your pocket: your smart phone. In the recent past we consumed our media, entertainment and social interaction in filtered chunks at specific moments of the day. We watched the eight o’clock news to receive an update on what was happening in the world. When we opened our morning newspapers we received the daily values of the stock exchange indices. When we picked up the phone or went to a bar we chatted with our friends. Nowadays, news and media are continuously updated and only partly filtered. Every time you open your phone or click on an app the world has changed. All these apps know exactly what to do to keep you hooked and checking in over and over again. There are so many updates that even the most avid techies get the feeling they have missed more than they have taken in.
This is something that social media companies are keenly aware of. Our behaviour is transparent in this age of big data and all these websites and apps can see how much we love all the constant updates. Our brains prefer spectacular ‘clickbait’ like ‘The Ten Craziest Things Donald Trump Has Ever Said’ to a well-balanced political analysis. Media users happily rush from one hype to another — from a Facebook frenzy to a Twitter storm and then onto viral video. Stanford University organised its first Habit Conference in March of this year. The goal was to explain how app builders manage to keep their users hooked to their app as much as possible, using the latest psychological and neuro-scientific insights.
This is not a generational phenomenon. When was the last time you read a business book from cover to cover? I am currently working on my first one. A potential publisher said to me: ‘these days, you only have to put real content in the first one or two chapters. The rest is just repetition with case studies and interviews.’ He laughed when I looked baffled. ‘Son, nobody reads beyond the first two chapters!’
2. CULTURE OF FEAR / LOW TRUST
One of the most famous psychological studies is called the marshmallow experiment. A child was offered a choice between having one marshmallow immediately or two marshmallows if they waited for a short period, during which the researcher left the room and then returned. The researchers found in follow-up studies that children who were able to wait longer for the extra reward tended to have better life outcomes on a variety of life measures.
The interesting thing about this experiment is that it can only work if the test subjects — the children — trust the researcher to keep their promise. As the children were in a laboratory environment with an adult researcher, this was very much a high-trust setting.
Transposing this to our world today: according to a wealth of sociological research, we live in the opposite of a high-trust setting: we live in a low-trust society — also known as uncertain times or an era of anxiety. In its 2016 global Trust Barometer report, PR firm Edelman states that ‘increasing distrust is the new reality.’ If we take the marshmallow experiment as a metaphor for today’s business world, many business professionals would choose to eat life’s marshmallow right away as they could not be sure the researcher would come back at all, or whether someone would take the other marshmallow while they were waiting. In short, in a culture of low trust and fear business leaders will try to get what they can right now — for themselves, but also for their companies.
3. SHORT-TERM (WORK) RELATIONSHIPS
The professional relationship is an increasingly short affair. The average worker today only spends around 4.5 years at each of his or her jobs. The Millennial generation, at the beginning of their working lives, only stay for half that time. As a result, people will have ten to fifteen employers over the span of their working lives. That means the answer to the classic job interview question ‘where do you see yourself in five years’ time?’ should be: ‘at a different company’. If only people where that honest.
This short-term career focus is reflected in how people approach their jobs. Why would any employee — including the CEO — work towards a company’s ten or twenty-year strategy, if their performance review and compensation are based on achieving short-term goals, and they will be long gone by then? Our short tenures fuel the ‘quarterly earnings hysteria’ the secret society for long-termism is so worried about.
Short-termism is not restricted to our professional lives; exactly the same principle is playing out in our private lives. A telling example is how dating and finding a partner have been dramatically transformed by dating apps. They provide an abundance of options, creating the impression there is a surplus of partners, according to David Buss, a professor of psychology at the University of Texas at Austin. As a result, ‘the whole mating system [shifts] towards short-term dating. Marriages become unstable. Divorces increase. Men […] pursue a short-term dating strategy [and] women are forced to go along with it’. Vanity Fair has called this the ‘Dating Apocalypse’.
The numbers reflect the shift. This century has seen a huge rise of single-person households around the globe. They are the fastest growing household cohort, which has a huge impact on city planning. Take the Dutch capital Amsterdam, where a large local real estate developer recently announced it would no longer build apartments larger than 40m2.
Looking at how these three sociocultural trends are expected to evolve the coming years, there are no indications things will spectacularly go into reverse. Technology is expected to become even more pervasive and distracting, thanks to wearables and artificial intelligence. The culture of fear and distrust is here to stay and could even get worse, thanks to rising global political tension and further cooling of the global economy. Our careers and love lives are set to become even more multifaceted when the millennials become the dominant generation in society.
So is there any hope Larry Fink and his secret society members will be able to influence our obsession with the short term and our System 1 thinking? As part three will show, the answer is: yes, there is.