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When It Comes To Retirement Savings, Are We A Bunch Of Marshmallows?

white_marshmallows

There was a classic longitudinal study conducted by Stanford psychologist Walter Mischel. It involved pre-school children and marshmallows. Individual children in a room were offered a marshmallow but, if they waited until the researcher returned after a short (but unspecified) time out of the room, they would get TWO marshmallows. The kids consistently responded in one of three ways: They took the one marshmallow instantly; they waited until the researcher returned and got their two marshmallows; or they waited as long as they could but ended up succumbing to the solo marshmallow on offer. Crudely, the kids were either ‘grabbers’ or ‘deferrers.’

Hey that’s interesting but so what? Mischel continued to follow the progress of the kids for the next forty years. On every measure of success, the deffering children went on to do better than the grabbing children – financially, academically, relationships, health, happiness. Deferred gratification is an aspect of impulse control which Daniel Goleman identified as a pillar of emotional intelligence. Maybe you started out thinking about whether your own kids are grabbers or deferrers but now you’re thinking back to your own childhood… How you doin’!?

Mischel studied individuals, not societies or nations, but I have a nagging and a gnawing that we kiwis are a nation of grabbers and that’s reflected in our diminished and diminishing returns.

This concept of deferred gratification has its largest observable tangible manifestation in retirement savings. You have to wait a very long time for your marshmallows. (If you’ve lost your teeth, you’ll still be able to eat marshmallows!)

It’s not just grassroots kiwis having problems with their long-term financial behaviour. A UK study showed that of employees eligible for schemes entirely funded by employers (ie free money), where the only onus on the employee was that they proactively acted to enrol, only 51% enrolled. Wow. In their book ‘Nudge’, Richard Thaler and Cass Sunstein write about their own employer’s retirement savings scheme at the University of Chicago. Bear in mind that all these people are professors and such. (There may even have been rocket scientists.) Some two-thirds of academics approaching retirement still had their mothers as the primary beneficiary of their insurance. Before we laugh at the mad professors, go look up how many kiwisavers never shift from those default providers!

It has been suggested that a seventh default provider be set up to be managed by the ‘Guardians of the New Zealand Superannuation Fund.’ Guardians? I think this group sounds like it includes Green Lantern, Thor and Iron Man (though, hopefully, not Captain America.)

Is it laziness or human nature? I just visited the ‘Sorted’ website. It asked me for my year of birth via a drop down menu that defaulted to 1910! It took me four clicks to get to 1966. (Hey, that’s a lot of work for my forty-five-year-old wrists.) Maybe the default should be the average year of birth of those who visit their site? I’m guessing those born in 1910 aren’t surfing the web for superannuation options. Frankly, at that age, I don’t think I want to know what they are looking for on the internet.

Politicians can, and will, continue to tinker with schemes. We can blame them for that but New Zealand is a representative democracy and when it comes to mucking around and not collecting nuts like good little squirrels, it’s sad to say that they probably are accurately representing us. They’re grabbers and so are we. So, tinkering with entitlement ages and employer contribution levels that get traded off with lower wage rises and so on isn’t ever going to provide a long-term meaningful solution. Never. It requires a societal attitudinal change and, as Mischel proved, it all starts with the children. (Oh God, won’t someone please think of the children!) You remember the children, the ones who as adults won’t be able to afford houses, yet we’re relying on them to fund both our debts and our retirement income through their taxes.

The good news is that being a grabber or a deferrer isn’t something you’re born and stuck with (like your height or being from Hamilton.) Mischel with Albert Bandura proved that deferring was a set of learnable skills. Will power, it seems, is skill power. So, let’s set up the schools to teach and model delayed gratification behaviours for the sake of the future of our country’s very existence. After all, if there’s anyone who has extensive experience of not getting what they want for prolonged periods of time, its teachers!

 

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Grit

My latest podcast, this one on the subject of grit. Supposedly grit / determination / perseverance / resilience is one of the greater characteristics of successful people. Obviously, there’s a time to walk away and not flog a dead horse but I talk about some of the research substantiating that idea. Certainly people who constantly give up are more likely to not be successful. Wasn’t it Homer Simpson who said, “Trying is the first step to failing.”

 

 

 

 

 

 

Weight Training Your Self Discipline Muscles

Discipline

Self discipline is a ‘muscle’ we can build by making small temptation corrections then incrementally increasing them

This article by Douglas T. Kenrick realistically stresses that we can’t be trusted. He rattles off some well-known studies showing how ill-disciplined people can be when faced with temptation. Given that other studies, such as Mischel’s marshmallows, have shown that having self discipline is one of the major contributors to a person’s success, a lack of it must be cause for concern.

I want to dislike the article because the guts of it is that we cannot trust ourselves so rather than try to change ourselves to be more reliable, we need to affect our environment. We need to avoid or prevent the temptations being around us as much as possible in the first place. Kenrick writes mainly about food but it is as true of alcohol, smoking, loser friends and time-wasting as well. So, we shouldn’t stock our larders and fridges with sodas, cookies, candy and chips. If we suddenly feel like them and we have to walk to our car to drive to a store, we’re less likely to do so. And if these things aren’t in our faces, we’re less likely to think that we want to. Good luck with that. Avoiding things is always a problem because, ultimately, you can run but you can’t hide. You will be confronted with your enemy-items soon enough via TV, billboards, a friend’s house, your workplace. What happens then? You go even more overboard.

That stuff just gets you fat and unhealthy which isn’t great but what really sucks the success out of your life is the brain-equivalents of soda and candy – time wasters like most TV, most computer games and social networking sites. And , of course, at work we have MEETINGS. (They’re ‘candy’ for someone involved.) I’m not trying to get my nag on here. If you’re happy vegetating, please do so on your own time and dime but, please, don’t whinge about your lack of success.

People who end up happy, healthy, wealthy enough, etc are those who can defer gratification. It’s a skill not a natural attribute. You can develop it if you choose to do so and you choose to do so every day as you put in the work, in the same way as a proper weight-training programme can build muscle.

You don’t start by throwing around Olympic powerlifting levels of weights. You start small and warm up first to prevent injury and demoralisation. The same goes for building your willpower muscles. One simple but effective technique to is self correcting every time you say, “Yeah” with a, “Yes.” It’s not that your classier speech will impress people. You’re training your mind to notice what it is you’re about to do. That’s a critical first step in stopping yourself doing it. Give it a go. See how it impacts your thinking and, more importantly, your behaviour. Once you get your ‘yeahs’ sorted out, then you can work your way up to potato chips and, down the line, big life stuff like your spending, saving and studying habits.

I am so hungry right now. Yeah.

What Factors Drive Success In People Part 2

My most popular post to date has been on what factors drive success in people. If you found that interesting, you’ll probably also get a lot from Angela Lee Duckworth’s work on grit and perseverance.

 

 

How To Refill Your Willpower Tank

You've only got so much self control; Don't waste it!

You've only got so much self control; Don't waste it!

This article in ‘Psychology Today’ by Susan Krauss reports on Roy Baumeister’s work about how our self control can be sapped through overuse.

Personally, I’d also had a mental model of willpower / self discipline / self control as a muscle that you could exercise and get to grow stronger. It turns out to actually be a tank that gets emptied but can be refilled and we can rely on random chance to do it for us or be proactive and consciously and deliberately take actions that refill our willpower tank.

Oddly, the only thing proven to do so is consumption of small amounts of actual sugar. As much as we’d like to think of ourselves as rational creatures who, through strength of character, can be better people, maybe our natural level of self control is set through natural random chemical chance? It’s like those old Donald Duck cartoons where he’s in a dilemma and on one shoulder a little duck angel appears and on his other shoulder appears a little duck devil who argue it out into each of his ears. This ‘strength’ or ‘ego depletion’ theory implies that the angel gets weary and the devil gets his way until the angel rests up. And the best advice is to slip the angel a barley sugar or a powerade like its on a triathalon.

Krauss argues, and I agree, that if the model is that of a muscle that gets tired then maybe the same progressive development can be applied to our willpower muscle that bodybuilders apply to their actual muscles. Keep working it out and it’ll get stronger over time but you need to keep increasing the weight / temptation to build it up.

No weight trainer or body builder says, “I’m going to curl this 20kg with my bicep forever,” yet you’re supposed to say, “I’m never going to have chocolate cake ever again.” That seems unrealistic, demoralising and potentially counterproductive. Weight trainers say, “I’m going to curl this 20kg weight 8-12 times or until I can’t, then rest, then do that set two more times. After time, that’ll get easier and I’ll increase the weight.” I don’t know what the cake equivalent is but it isn’t, “None ever again.” Work up to it.

Employers probably aren’t directly interested in employees’ cake avoidance or body building abilities but willpower  / self control is likely a contributor to perseverance and grit which, as I write about frequently, are the most common precursors to success at work (or anywhere else for that matter.) So, if you’re leading someone at work who gives up, can’t focus for long enough or is constantly engaging in temptations that are distracting them from activities that should be adding value to their work and their lives, what can you do?

Well, if we’re stick to our weight training metaphor, you become their personal trainer. Not one of those old school cliche ‘Drill Sergeant’ types who shout, “You’re worthless and weak!! Give me twenty!!” Set challenging but realistic micro-goals that progressively build towards the desired target. Each success builds on itself, they’re more likely to buy-in to it and participate and, ultimately, you and they are more likely to achieve the end goal. But even the fluffiest of personal trainers aren’t pushovers. They don’t accept excuses and they demand honesty and effort.

And the irony is, given that sugar refuels our willpower tank, even if you do eat the cake, you may regret it but you’re less likely to eat more cake. So, in a tenuous way, you can have your cake and eat it too. Try a handful of dried cranberries. They’re the supposed ‘Superfruit.’ You never hear of ‘Supercake.’ (If you have heard of ‘Supercake’, please do let me know…)

What Role Does Optimism Play In Building Your Team?

Why is the metaphorical ‘half full / half empty glass’ never a wine glass? Not businesslike? That hasn’t been my experience with businesspeople...

Why is the metaphorical ‘half full / half empty glass’ never a wine glass? Not businesslike? That hasn’t been my experience with businesspeople...

Are you leading someone who is always radiating ‘doom and gloom’ and bringing down your team? Do you suspect that your team would be more productive and your workplace more a workplace of choice if the gloomy guts could just change their ways? You’re not wrong (except for the odd occasion when you are. More about this soon..)

Resilience and perseverance are two critical characteristics of successful people. One of the factors leading to our own levels of resilience and perseverance is the nature and extent of our optimism.  The way we think about success and failure determines, in the long run, who among us becomes successful or fails. The nature of that thinking is nothing but a learned habit. Our genes, childhood, teachers, parents, experiences etc, good and bad, have shaped our thinking. The people you’re trying to lead, when about to begin a job, project, relationship or major task, will view their prospects through a mental lens that has been polished and scratched. You could help them choose to get rid of that lens if it’s not helping them and replace it with one that will – one that they choose themselves.

Pessimists, when they actually experience a genuinely negative event, tend to believe the bad effects will be for a long time, that it doesn’t just apply to a specific area of their life but will cut across everything and that the event is their fault. Optimists tend to believe genuinely negative events are temporary, isolated and, whether or not they are to blame or partly to blame, there is a challenge from which to learn. Studies have shown that naturally pessimistic people are generally less successful, less healthy and, by definition, less happy.

If you’re leading a team, how many of those people do you have? How many do you need? Zero? Really?

Studies designed to generate states of learned helplessness amongst the participants (be they dogs or humans) show that about one in ten are inherently prone to giving up almost instantly. Six out of ten will eventually learn to be helpless given the relentless conditions of the study. BUT three out of ten are naturally inclined to never giving up. How many of those people do you have on your team? How many do you need?

I’m not suggesting you should fire or screen out of recruitment processes all those who are natural pessimists. BUT maybe you should try and consciously plan to have the right sort of people in the right sort of roles at the right times? I could be wrong but project planners, financial controllers and neurosurgeons should probably have at least a streak of pessimism in there for safety’s sake. Studies show that pessimists accurately judge how much control they have, whereas optimists overestimate how much control they have. They distort reality in their favour. And I’m glad for the health and happiness of the irrepressibly external optimists but there are, in business, many times when the wisest move is to simply give up. Having someone on board who simply cannot give up might be risky.

So, let’s think about helping average people improve their lives and your team’s productivity by raising their optimism levels. It’s a win-win!

There are various assessments you can undergo if you wish to discover the nature and extent of your own levels of optimism and pessimism. (I was quite surprised at my own. I did very well except for my interpretation of positive events; I didn’t take enough credit for those apparently.) But like so many others of the supposed styles we have such as communication, personality, learning, conflict and so forth, these are natural defaults and preferences. Most are not carved in stone. I choose to believe that we can choose. Some we’re stuck with but not optimism – that, we can choose to adapt and improve and be as optimistic or pessimistic as we think we need to be given the circumstances that we’re in. For all the advantages of being generally optimistic, some situations are better off with a pessimist around. Anytime the cost of failure is high, that’s when you want someone around who considers the possibility that s##t may hit the fan.

An event is just an event. Whether or not it’s adverse is in the eye of the beholder. These events may or may not have actually happened. The sales call that fails. The proposal that gets rejected. The suggestion that gets ignored. The earthquake. The adultery.

How can you take control and train yourself, and eventually model to others, how to sensibly explain the meaning of events and learn how to be more optimistic and reap some of those benefits? Martin Seligman’s ABCDE model is both simple and effective. I’m always a big fan of simple and effective.

A – Adversity
B – Beliefs
C – Consequences
D – Disputation
E – Energization

Write things down for a week. Draw up a rough grid with five headings: ABCDE. A is the Adversity (real or perceived, present or potential.) What beliefs are driving your feelings about the adversity? What are (or might be) the consequences if you belief that? Disputation is arguing with yourself. (It doesn’t have to be out loud although that might be entertaining for others.) In this argument, look for real evidence, consider alternatives, implications and the usefulness to you. Once you have an alternative, then energize it by taking an action, any action however small. Over time, this becomes a habit and those small actions add up.

Supposedly the average person thinks over 12,000 thoughts a day and 70% of those are negative. Some might be useful like, “If you change lanes now you might hit another car,” but some might be holding you back, “If you quit your job you might not get another one.” If you can become a leader who can instil in others, at least the ability to recognise and catch their own negative thoughts followed by some internal dialogue about alternative thoughts, then you’re a long way to standing out from the crowd and being a successful leader of positive and proactive change in your workplace.

The Ever-Changing Workplace Locks In The Need For Lifelong Learning

"What's an encyclopedia?" "Look it up..."

The idea that our education ended once we left school was an accurate and helpful one – for factory owners in the industrial revolution. Since then, not so much. Many people quote the saying from Mark Twain, “I never let my schooling interfere with my education.” (I suspect that it’s more likely Twain said, “Schoolin’.”)

One of my kids heard a reference to an encyclopedia on a TV show the other day. She asked me, “What’s an encyclopedia?” Wow! My mum back in my childhood to any kind of “What’s a widget” kind of question would automatically respond, “Look it up.” Of course, today it’s inherently ironic that the looking up would almost certainly not occur using an encyclopedia. Things change, the rate of change is increasing and the ongoing need to learn will only increase. What we’re learning and how is going to change. We need for ourselves and our kids, and we need to cultivate in the people that we lead, the ability to learn faster, more effectively and more often.

Quite apart from the likely positive impact on the quantity and quality of our lives as reported in this Guardian article amongst many others, there is a positive correlation between ongoing development and increased success. The noted psychologist Carol Dweck wrote a fascinating book called ‘Mindset’ that’s also an entertaining read. Broadly, she proposes that there are two mindsets – the fixed mindset and the growth mindset. I paraphrase crudely but the difference seems to be mainly that the fixed mindset folks see that we’re all dealt some cards and our life will turn out depending on the cards we’re dealt. We’re smart or we’re not and our results will reflect that. The growth mindset folks think they can get new cards or more cards or play some other game that doesn’t involve cards. These mindsets are a choice and the beliefs the mindsets represent focus and filter our behaviours which dramatically impact our results.

To those with fixed mindsets, working hard is unnecessary as the talent they have is the talent they have.

Jerry West, is the former NBA Manager who drafted Kobe Bryant into the NBA for the Los Angeles Lakers who went on to lead L.A. to five championships. As a player himself, West won a championship. Have a look at the NBA’s logo which includes a player’s silhouette. That player was Jerry West. His business was selecting talent for a multi-billion dollar industry. What sort of player, what sort of person does he look for? He says, “I think you have to look beyond the resume sometimes. It’s easy to look at a kid in college who scores a lot of points and plays on a great team. But can he get better? Can he progress? Or is he not going to get any better?” Jerry West believes in the growth mindset.

Malcolm Gladwell wrote about the talent mindset in the corporate culture especially citing the Enron failure. Hire the best and brightest and get out of their way led to what happened there.

The number 1 skill I recruited for was the ability to learn, evidenced by ongoing personal development, not necessarily formal education. People toss around the old chestnut, “Hire for attitude, train for skill” for a reason. It makes sense. What are useful indicators of a desirable attitude including success-oriented traits such as perseverance and resilience? Ongoing personal development overcoming challenges along the way preferable in a team-based environment. If you don’t know what any of those words mean, look them up, in an encycl… on Wikipedia…

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How To Make Mistakes: Another Difference Between Successful & Unsuccessful People

Don't just accept mistakes & learn from them - chase them

Don't just accept mistakes & learn from them - chase them

When you read studies done after-the-fact about some of history’s biggest mistakes, such as the Bay of Pigs and Enron, you’ll often see the phrase, “the smartest guys in the room.” What the study-ers are trying to get across is that somehow a group of highly qualified and perhaps overly influential advisers managed to convince those who actually made decisions to take actions that ended up in destructive disaster. Each of us in our smaller and admittedly less-global-catastrophe-potential worlds probably encounter demonstrations of ‘smartest guy in the room’ behaviour’ too, possible even being demonstrated by ourselves!

You’re at a meeting. Someone is talking. You don’t get what they’re saying or they use some terms you’re not familiar with. BUT you don’t ask for explanation. Maybe you hope it’ll become clearer in time or with more context. Maybe you ask a weak question like, “Excuse me Bob, but for the benefit of the people in the room who aren’t experts on xyz, can you please explain…?” Driving some of that behaviour is fear of looking like you don’t know what you’re supposed to. It probably goes back to primary school or earlier. Might be some mommy issues in there too. Hey, I’m not judging you man.

These days I train, present to or even entertain groups of people from an incredibly varied range of careers, industries and associations. These people, in their own arenas, are experts, geniuses in the sense that Malcolm Gladwell or Jay Niblick write about. Maybe they’re not rocket scientists but in their field of bovine stomach enzymes, they are the smartest guys in the room, if not the world. Or geniuses about concrete or lab testing or motorsports or whatever it is my client de jour specialises in. Almost always, around these people at these events, I am the dumbest guy in the room. I get to ask innocently ignorant questions and not only do I not get mocked for my lack of understanding about bovine stomach enzymes, I get a handheld tour of all things cow-stomachy. And I learn. I’m a little sad that it’s only recently that I apply this approach to all my dealings.

This Wired article by Jonah Lehrer applauds the potential for mistakes as learning development tools.You can picture the scenes. Volunteers are plugged into EEGs. Brain activity is measured. Subjects experience mistakes. What happens inside their heads at the point they realise they’ve made the mistake and in the time afterwards? And how did things turn out for people with different readings? Go read Jonah’s story but long-story-short: when the mistake occurs there is a ‘ERN’ signal which is short, followed by a longer ‘P-e’ signal. In my terms, the former is the brain saying, “@#$%!.” The second is a period of heightened awareness and attention. This makes sense. I almost fell off a chair so I snap to attention and engage in non-chair falling activity a lot more consciously. The associated research shows that more successful people tend to have not so much longer but more pronounced ERNs and longer P-e’s.

There you go. Apply that in your life and get better results. Um, how? Doesn’t this brain stuff just happen to us like our height? Nope, it happens to us like muscle development. We go to gyms and run up hills to build up our strength. To work on our ERNs and our P-e’s, we need to exercise them. How? By proactively making more mistakes… (Let’s not do that whilst driving. Let’s agree to go do something that’s safe but challenging. Me, I’m teaching myself guitar. Once again, I’m the dumbest guy in the room.)

So, to paraphrase New Zealand’s anti-drinking campaign, it’s not THAT we’re making mistakes, it’s HOW we’re making mistakes.

Fail better; Feel better.

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What Factors Drive Success In People?

 

This longitudinal study has been tracking the progress of hundreds of children through the New Zealand educational system. Its latest findings (summarised nicely in this Radio NZ news item only this morning) reveal how the kids have achieved (or not) at NCEA – New Zealand’s high school qualifications. Broadly speaking, they break down the participants into their strata of success and look at the associated characteristics within each band. What are the common traits of those who succeed versus those who do not succeed (or, at least, haven’t succeeded yet)?

The answer is hard work! Don’t you hate it when your parents are right? I paraphrase but the soft / people skills are more correlated to success than inherent braininess: Perseverance, curiousity, resilience. That’s good news, as those are behaviourial choices we can make and encourage our kids to make. It’s not like “tall.” That’d be a tough one. Though, if you manage to convert your short kid to tall, it may well prove their resilience!

I don’t write about education. I write about improving results through engaging your people – employees, customers, whoever your people are. What do educational success factors have to do with that? If they ever even existed, long gone now are the days when we went to school & learnt then left to work and stopped learning. That kind of industrial revolution, people-as-cogs-in-the-machine thinking is archaic. Lifelong learning is the way of the future, it is the way of the now. Whatever machine you’re operating today, whatever software you’re an expert in today will be obsolete soon enough. Obsolescence is accelerating. The last company in the world (in India) that manufactured manual typewriters just got out of the typewriter manufacturing business. Whatever abilities you have today, the number one ability needed in future is the ability to learn.

So, the success factors driving success at high school academically are going to be needed after high school – in the workplace and in everyone’s life outside work. Perseverance, curiousity, resilience can be taught and learnt and they can be recruited and supported in the workplace. I’ve heard for years the mantra from HR folk and managers in the hiring frame of mind, “Hire attitude, train skill.” I mostly agree. This latest research certainly reinforces that philosophy. I bet it becomes even more important outside of school. Schools provide a lot of support and structure. The big bad world does not. People with perseverance, curiousity, resilience that they either naturally possess or have chosen to develop are far more likely to be these ‘motivated, self starters’ all these employees are always looking to hire. They’re more likely to be the innovative entrepreneurs that our economies actually desperately need.

So, the next time you’re hiring or looking to spend some training budget, give some researched-backed thought on the best way to invest that time, energy and money. Improved results and success are built with the building blocks of perseverance, curiousity, resilience. And maybe email the link to that news item about high school success to your kids. Or tweet it. Or send it by whatever means they’re using today because they stopped using the previous latest best app because you started using it…

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