The infamous ‘Marshmallow Test’ taught us about willpower and balancing short-term versus long-term pay offs. The test, which was conducted by psychologist Walter Mischel in the 1960-70s, involved giving nursery school children the choice between one edible reward which they could devour immediately, or a larger reward they would have to wait for, alone, for up to 20 minutes.
The main finding from this study was that children who displayed willpower and held out for the larger reward generally fared better in life with higher SAT scores and a lower BMI 30 years later.
While some criticized the study and its conclusions, its findings do seem to be relevant to other aspects of life; business being one of them. What I mean by that is that making business decisions that balance not only the short-term whizz-bang gains, with the long-term even-bigger-bang-if-you’re-patient gains.
It is evident in recent R&D spending figures that an increasing number of corporates are looking to the future and working towards long-term goals. An article on The New Yorker notes that this year, “R. & D. spending is accelerating at its fastest pace in fifty years and is at an all-time high as a percentage of G.D.P.” Similarly, the Global Innovation 1000, a list of public companies that spend the most on innovation by Strategy&, found that companies are spending more on R&D than ever before. Last year they invested a record $647 billion.
This focus on long-term goals has also been found to be rewarded by the market, and companies that invest in R&D consider themselves to be better innovators today than they were a decade ago, with further future plans to raise their game in the innovation stakes.
However, that’s not to say that it’s all about the amount invested. As highlighted by the Strategy& report, companies seem to be doing more with less, with those that have made real progress in leveraging their R&D investments citing tighter alignment of their innovation and business strategies, and by gaining a better understanding of customer needs.
As (well) put by Steve Jobs: “Innovation has nothing to do with how many R&D dollars you have… It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” It’s also about keeping future goals in sight without being overly distracted by short-term risks or opportunities. In the corporate world, being in it for the long haul certainly has bigger rewards than just a few marshmallows.