The short-term fallacy
It is quite often that we make important life decisions based on short-term rewards. Our brains are wired to hang onto short-term rewards since throughout the majority of human existence long-term thinking was hindered by life threatening situations. Can’t do much long-term thinking while being hunted by a lion or with an empty stomach.
I’m not talking about those situations though. I’m talking about career or partner choices that are based on state (that represents short-term) and not trajectory (that represents long-term).
Look at the cover image of this post for example: by the looks of it the state of the airplane is perfectly fine, flying in the sky towards some destination. Let’s assume that this airplane has reduced thrust in both engines and a flight computer malfunction is causing the airplane’s nose to pitch up. The airplane is flying alright but it is minutes away from an aerodynamic stall, a situation where the lift generated by the air flow over and under its wings is not enough to sustain normal flight. Unless the pilots do something, like pitch down for example, the airplane will fall from the sky in a free fall.
It is quite common that we get carried away by a state that looks appealing and fail to see the trajectory. The examples are numerous, we choose a company because it reduces commute time, offers remote or uses a technology that we really like. We choose a business partner because it happens to be a friend or share a common lifestyle.
These are states that don’t reveal anything about the future and while choices based on short-term evaluations are not irreversible it is worth taking some time to evaluate the long-term repercussions.
If, while evaluating a company, you favor the technologies they use, their office location, or any other perk, ask yourself: will these circumstances be equally important for me in the future? More importantly, how committed is the company to keep the above? What if they move in 6 months, change technologies or go under?
If you get a 10% salary increase by job hopping every year, ask yourself: what will a future employer think of me in my forties, will she be able to trust me for something important?
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If, while choosing a business partner, you evaluate his / her current commitment, ask yourself: how would I want things to evolve in 10 or 15 years when both of us have a family? Do we want the same things from our lives?
If, while evaluating a technology, you get excited about its current prospects, ask yourself: how dependent will I get from that technology, how easy will it be for me to change when a new one pops up?
All these questions have no definite answers, in some cases a short-term reward is the only way out from a painful situation but in most cases we have the luxury to spend enough time to evaluate our decisions.
Keep in mind that short-term gains (or even harder losses) are very much real and tend to understandably blur our vision. Break-ups are so hard because the immediate events are stressful and very easy to imagine than a vague description of better future times. Α bigger salary today is much easier to evaluate than stock options or a promotion that may materialize in the future.
One trick I often employ to help myself from over-dramatizing short-term gains or losses and allow for a more calm evaluation is to write everything down, both long-term and short-term expectations. I also try to answer the question of what long-term effects my current decision will have and then put those in the evaluation mix.
How do you make high stake decisions?
Founding Owner of Weperform, a sports branding and distribution company, and Performance Store S.A.
2ywell said
Software Engineer
2yThe most tricky decisions are the ones that seem similar at the moment, but carry this short-term/long-term dynamic in disguise. If someone avoids playing stupid status games and realize the benefits of compound interest in relationships, they are likely set for life
Improving your decision-making, one data point at a time | Partner @ Amplifyd
2yNice article George! A great approach I use in order not to get lost in short-term effects is the 5-5-5 rule. I always try to evaluate my decisions on their impact in my life in 5 days, 5 months and 5 years. It's a quick and easy way to see both the short-term and long-term effects of each decision in my life and also I can identify the effort I am willing to put based on its impact.
Sourcing Solutions Principal at NEOM (BEng, MCIPS - Chartered, MSc, PMP) | Procurement Lead
2yNice article George, thank you for sharing. I suppose it would be even better when someone is so fulfilled in their current state, that they don’t need to explore other short or long term gains.
Senior Research Associate @ University of Ioannina
2yVery interesting and insightful!