The “Standford marshmallow test” on kids has been the torch bearer in research on delayed gratification. Researchers at the USC Marshall chose to investigate adult behaviours when faced with choice between a larger delayed benefit and immediate smaller benefit. Their study, published in Psychological Science, suggests that those who feel powerful and in control of their situation tend to opt for future benefits where as those who feel powerless seem to ‘take it while it’s available’.
Nathanael Fast, an assistant professor of management and organisation and Priyanka Joshi, a doctoral candidate in management and organisation at the USC Marshall School of Business studied the tendency to choose short-term smaller gains over future bigger gains. The process involved is called ‘temporal discounting’.
Temporal discounting is the reason why someone would choose $100 today over $110 one month later. Similarly, a smoker may choose a cigarette in the next six hours but may not opt for two that he gets after a week. This immediate gratification tendency impacts everything from money investments, retirement savings, and business strategies.
What the study says
Joshi and Fast have suggested that one potential way to help people put off small immediate gains for larger future benefits is to enhance their feeling of authority. “Consistent with our predictions, we found that feeling powerful actually increased people’s willingness to wait for larger rewards,” reported Joshi. It was also found that the experience of power in the workplace is positively correlated with one’s total accrued assets, even after controlling for more likely factors such as annual income and age. In other words, power seems to promote savings because people feel more in touch with their future selves.
“Power provides control over future outcomes, so the future seems more certain when you feel powerful,” Fast said. “You’re therefore more likely to expand your sense of self to include your future self and, as a result, consider long-term consequences when making decisions.”
By thinking of a time from the past when they felt powerful, decision makers reduce the effects of temporal discounting. Joshi says reliving those powerful instances of their lives generates similar feelings in the present. “Of course, the best way for organisations to make their employees feel powerful is to actually give them more power.”
“Our research doesn’t mean that power holders are always going to make the best decisions,” said Fast. “Power also leads to greater risk-taking, illusory control, and heightened reward sensitivity, all tendencies that can lead to disinhibition and poor decision making. Yet, power holders do often make good decisions and they may be particularly good at considering future consequences.”
Perhaps experience of power is an integral component that allows effective leaders to lead from the front and take decisions for the greater good.