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Bob Sutton on “Short-Termism”


After reading Bob Sutton’s blog “Work Matters,” I have fully seen the applicability and usage of developing one’s own blog. Sutton utilizes his blog not only to keep an account of his research and insights, but also to utilize readers as a source that Sutton is able to consequently work off of—not much different than our structure. Despite the intrigue in Sutton’s many different posts, I decided to focus on his post, “Taking The Path of Most Resistance: The Virtues,” in which Sutton relates the findings of successful school reforms to everyday success.

Sutton discusses how, in 1993, the Casey foundation discovered that successful school reform is only brought to fruition by taking the path of most resistance. Although this may seem counterintuitive, deciding to take the more difficult path toward lasting change seems to outperform taking the shortcut every time. It has been proven that substantial change cannot be done without difficulty, or else the former status quo is bound to re-establish itself. One can only bring about lasting change by taking a long-term oriented approach, working daily to achieve this end, and overcoming the numerous obstacles that would otherwise prohibit success.

While reading this post, I could not help but relate this situation to what we discussed last class. Today’s society and its focus on short-termism has drastically impacted the efficiency of our financial markets and even inhibited substantial economic gains. It is this type of thinking that is poison to facilitating any change, yet the masses cannot help but look for short-term gains as opposed to looking for long-term benefits. I believe that this psychological contradiction is similar to what is known as the “prospect theory.

The “prospect theory” is an intriguing concept that explains how humans are predisposed to weighing gains and losses differently. As evidenced by Jonah Lehrer in How We Decide, the majority of individuals prefer to many small gains as opposed to one large gain and one large loss over many small losses. It has been psychologically proven, that we associate gains and losses differently, thus we will not risk losing a certain amount of money simply to gain that amount. Taking this concept into the macro-perspective, we can see how individuals would prefer to continuously make small short-term gains even at the expense of one large loss down the road to making a large gain down the road at the expense of many small short-term losses. Thus, it is evident that we are fundamentally developed with a “short-termism” mentality and in order to broaden this perspective, policies and regulations must be put in place for the greater good.

This self-defeating “short-termism” may have been ingrained into our behavior evolutionarily. As Richard Dawkins explains in The Selfish Gene, humans are naturally selfish at the microscopic level. Our genes have one goal on their mind, to pass their genetic code on. In order to do this, our genetic makeup is to be inherently self-interested. Although individuals are able to altruistic in certain situations, I would argue that evolutionarily, we might be predisposed to concentrating on short-term gains for ourselves in order to better our current situation over others. In acting selfishly in the short term, our chances of procreating and passing on our genetic code increases at that time. Therefore, we may be unable to go against our instincts and concentrate on long-term gains that are much less guaranteed.

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About Derek

I am a senior at Bucknell University where I am double majoring in Management and Psychology.

Discussion

3 thoughts on “Bob Sutton on “Short-Termism”

  1. Really thoughtful post, Derek. I like how you were able to tie in the “prospect theory” into the short-termism, as these certainly go hand in hand. With regards to the excerpt we read for class on short-termism, do you think the ideas set forth were viable? One that caught my mind was the idea of instituting an incentive for long term investing. This seems like a rather easy thing to do and one would think it would produce the desired results. However, we may be in over our heads to the point of no return. This also reminded me of the Volcker Rule that is at hand. Maybe this is one step towards rooting out the short-termism that currently drives the market. The way I see it, especially with our economy in the current state that its in, we need to motivate investors to invest in the long term (raise rates?) and re-establish credit through bank lending.

    Posted by Patrick | February 7, 2012, 10:59 pm
  2. Given how usually people act as if schools are hopeless, I wonder what were the successful reforms. And, success as what?

    Posted by Jordi | February 8, 2012, 2:27 pm

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BLOG INSTRUCTIONS

Blog 5 before session 6 What (interest) or Who (person) Inspires You? For this week’s prompt, the Blog Council wants you to examine how this class relates to your own interests. So, please write about how this class relates to some of your own intellectual or other learning interests. We are NOT interested in how it relates to a specific career goal. Plan B: same idea, but based on a person. See whole post for details.

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