Andre Durand

As start-ups mature, many fail to transition in how they deal with decisions. When you’re strapped for cash, you don’t always have the luxury of thinking through the full-cost of your actions. You are essentially forced to compromise, opting for the short term gain, and pushing the full cost of your decision into the future in some manner. I emailed this to Bernie Daina (a friend and corporate psychologist) knowing he’d have something to say about it. I wasn’t wrong.

I’m sure many companies are started that way, it’s in the people’s heads originally and then becomes a fundamental component of the company’s culture as a result of repeated decisions reflecting this mentality. But not many companies last for long this way. In today’s market, investors’ pressure for exits is so profound that even companies that are aimed at short-term gain are exiting earlier than anticipated. Or merging for reasons that — when it comes to mission and business focus — are nonsensical.

Much of the formula for a startup’s long-term viability has to do with a clear yet adaptable vision, faith in that vision, and the readiness, discipline, and competence required to do the heavy lifting in order to fulfil the vision. Many hiring decisions must be made to get from one point to the next point. But if the predominance or decisions are made this way, whether hiring or purchasing decisions, logistics companies — for example — would buy used vehicles cheaply off some rent-a-heap lot on East Colfax Avenue. Your company would purchase its servers on Ebay.

Framing the problem in terms of social comparisons can also be a trap. Making social comparisons is useful in competitive dynamics. The runner sees a faster colleague win a race, and is inspired to beat him, or at least place second. He or she will seldom, if ever, compare his own performance to that of people at the bottom of the heap, unmotivated runners, and so on, unless the subject is also near or at the bottom. Comparing ourselves, or our endeavors, to those that rate our contempt just drags us down. Even if the comparison is made with “good” performers, whose methods, ethics, or standards we disrespect.

It is also useful to bear in mind that decades of research have established that making social comparisons can help performance in well-mastered, routine tasks. In complex and unfamiliar tasks, and especially ones we are learning, having a real or imaginary audience or base of comparison only hampers performance. True in humans, primates, and cats; true cockroaches running various types of mazes that also vary in how dark they are.

The bromides and cliches suggesting delayed gratification are so numerous, it’s not worth mentioning them. World religions are founded on this principle. Popular cliches also proliferate to the opposite, e.g., A bird in hand is better…” In today’s times, the way we are reacting as a nation, a Jihadist can blow up a pizza parlor in St. Louis and throw our economy, and that of nations we trade with, into an abysmal depression. This would not be the consequence if an insane citizen performed the same act. So who’s to say if short-term versus long-term is the wiser course? Best be prepared for both.

But if you are a man with vision, vision pertains to longer term thinking and actions. Short-term is more about risk aversion. A modicum of risk aversion is healthy, and even healthy to have on hand in stable, upbeat times. When caution drives the decision making and momentum singularly, you don’t have an entrepreneurial endeavor. You have a lemonade stand set up for the day a safe distance from the road on a quiet cul-de-sac; by some children who wish to garner a little cash for tonight’s charity event or visit to the toy store. Or to “show” their ingenuity and enterprise in order to please parents — who invested in plastic cups. A little too saccharine for your tastes, I imagine!

Bernie

Bernard L. Daina, Ph.D.
Management and Organizational Psychology
730 Seventeenth Street, Suite 690
Denver, Colorado 80202
Tel 303-596-6640
E-mail Go2Daina@aol.com