Is hyperbolic discounting and temporal motivation a cancer on effective leadership, or just human nature?

 Have you wondered why so many leaders talk a good game about the future, innovation, and strategy, yet so many events (such as the recent wave of cyber incidents, repeated project failures, and illegal trade practices) act as evidence of a lack of integrated values and principled leadership?

Hyperbolic discounting is our inclination to choose smaller immediate rewards over larger delayed rewards. Individuals who act in this manner are described as ‘present-biased’.

Temporal motivation theory emphasizes time as a critical motivation factor such that priority (and applied dedication and effort) exponentially increases as a particular deadline draws near. We have all seen leaders procrastinate and projects squander time and resources until a deadline begins to draw closer.

When you combine hyperbolic discounting and temporal motivation leaders frequently become excessively focused on immediate gain and dismissive of risk and the future costs to their business, operations, and reputation.

Following the recent rash of cyber incidents in Australia it became readily apparent that even large organisations are suffering the consequences of previous leadership decisions and/or a lack of effective risk mitigation. Anecdotal feedback is that investment in cyber security has been neglected over recent years and the leadership mantra of agility, speed to market, and fail fast, has spawned services and products that are poorly architected, operated, or secured.

Considering recent news articles and disclosures from the current senate inquiry around Qantas’ leadership and business practices it is also apparent that if this focus on an immediate return is given too much free rein it can move to actively erode an organisation’s operational integrity and public standing resulting in the extensive brand damage we are now seeing.

Recognising human behaviour and personal motivators, today’s business leaders could borrow an approach from the medical profession and ‘first do no harm’ as we seek to ensure business success (health) as well as organisational (patient) longevity.

With a different leadership perspective, hopefully the flying kangaroo will regain its standing in the public eye and on the global stage, rather than continue with the excessive focus on shareholder dividend and leadership incentivisation.