What the Marshmallow Experiment Teaches Us About Corporate Sustainability
Article by Brent Schulkin – Founder, Carrotmob
In 1972, a Stanford psychology experiment revealed the undeniable human tendency to seek instant gratification. The psychologist gave children a marshmallow, and told them that if they could wait 15 minutes without eating their marshmallow, they would be rewarded with a second one. But if they ate the marshmallow in the first 15 minutes, they would only get one. A small minority of kids were able to wait, but most couldn’t resist the marshmallow that was in front of them.
In the test of corporate sustainability, companies often act in much the same way as the children. If you ask business executives whether sustainability is important to their business, most will agree that it is. They know that long-term financial performance depends on a healthy planet whose climate is predictable and whose natural resources are well-managed. They understand that sustainability is important, just as children understand that two marshmallows are better than one.
But how long can they wait before giving in to temptation? The benefits of sustainability investments may not be visible for many years to come, and meanwhile the marshmallow of short-term profits is just sitting there in front of them, asking to be eaten! Just as humans often have trouble being patient, so do businesses. It’s difficult for businesses to make decisions based on what may happen in the next 10, 20, 100 years, because our financial markets put so much pressure on them to focus on short-term performance. Businesses instead stay focused on sales and marketing, because sustainability doesn’t directly boost sales next quarter.