Does your team pass the marshmallow test?

Predicting the adult success of a 4 year old is a tricky business.  Understanding how income differentials arise in primitive economies is a tricky business.  Guiding a software venture to long term success is also a tricky business.  I believe there is at least one common lesson that applies to all three.

It is very hard to look at a 4 year old child and predict how successful they will be as an adult.  At that age all the normal aptitude and intelligence tests don't seem to be good predictors of ultimate life outcomes.  However an exception are tests of deferred gratification, such as the famous marshmallow experiment.  Wikipedia does a good job of summarizing:

The marshmallow experiment is a famous test of this concept conducted by Walter Mischel at Stanford University and discussed by Daniel Goleman in his popular work. In the 1960s a group of four-year olds were tested by being given a marshmallow and promised another, only if they could wait 20 minutes before eating the first one. Some children could wait and others could not. The researchers then followed the progress of each child into adolescence, and demonstrated that those with the ability to wait were better adjusted and more dependable ...

... Shoda, Y., Mischel, W., Peake, P. K. (1990). Predicting adolescent cognitive and self-regulatory competencies from preschool delay of gratification: Identifying diagnostic conditions. Developmental Psychology, 26(6), 978–986.

An analogous study was done to try and explain the rise of income differential.   An experiment was conducted among the Tsimane', a group of Amerindians who live in the Amazon.  The Economist summarized it well in Economics and Anthropology - Patience is a virtue, Feb 8th 2007:

... Exactly why some people were able to accumulate more than others has been something of an anthropological mystery ... the main hypotheses have been luck, intelligence and aggression. These all, of course, play their part, but now a fourth phenomenon has been added to the list: patience

... One phenomenon that is almost unique to humans is deferred gratification ... the researchers offered all 151 adults in two Tsimane' villages a choice between receiving a small amount of money or food immediately, getting a larger amount if they were willing to wait a week, and getting a larger amount still in exchange for several months' wait for payment. ... Five years later, Dr Reyes-Garcia and her colleagues came back again ... and found that those who had shown most patience in the original experiment had also seen their incomes increase more than those of their less patient counterparts ...

The same concept applies to software ventures. Organizations that master the art of deferred gratification will have greater success over time.

There are plenty of times when you will be tempted to do something that feels good at the moment, but won't be the optimal step for the long term.  Previous posts talked about situations where it makes sense to pass on a customer or hold off committing to additional features, even though there is a lot of immediate pressure to take those steps.  Sometimes you just have to say no to the marshmallow right in front of you, to get more marshmallows later on.

However, like any good idea it is possible to misapply it.  It is critical to remember that software enabled ventures usually have limited windows of opportunity, so that being too late often means failure.  If you don't quickly package up a useful set of features, if you don't close a critical mass of reference customers early, you may miss your window altogether and never have a chance to collect any marshmallows.  Implicit in the concept of "deferred gratification" is the idea that you are selectively choosing to defer some benefit only in cases where that deferral increases the total benefit.  Buying into the concept of deferred gratification is not a license to lose your sense of urgency.

Using deferred gratification to your advantage is just one part of a broader proactive leadership style.  The most success goes to those who don't just react to opportunities and problems that pop-up in front of them, but rather take charge of the agenda and proactively manage the team with a clear vision of where they are going.

                                                                                 copyright 2007 Kerry Champion