Results of long-running study show that those who wait for reward do better in the end, Mark Zweig writes.Back in the ’60s a Psych professor at Stanford, Walter Mischel, gave a famous test to a group of 4-year-olds. He put a marshmallow in front of them and told them if they could wait 15 minutes to eat it, they’d be rewarded with a second marshmallow. Only about a third of them could wait. Fast-forward 50 years and there are some very interesting findings. Not only did the group of those who could wait the 15 minutes do a whole lot better on their SATs, they were more successful in their careers with higher salaries, bigger 401(k)s, and shorter criminal histories. Pretty interesting research, all covered in Mischel’s new book, “The Marshmallow Test.” We see much the same thing in the AEC firms we work with. Those run by principals who can delay gratification seem to be much more likely to have growing, profitable companies than those whose personal “needs” require them to strip the company bare every chance they get. It’s really common sense. If you want to grow your company you’ll have to reinvest your profits into acquisitions of other companies, starting new offices, adding new services, making new hires, trying new marketing initiatives, and investing in technology spending. Your other options are to extract the money, buy a bigger house, acquire more vehicles, go on more vacations, etc. People fit in either one of these two camps. Of course, if you delay gratification long enough and really get things going you’ll be able to have your cake and eat it, too, because at some point the machine becomes so profitable and so valuable you really can afford to make some major extractions from it. The key is knowing when the time is right for that to occur. But one thing is for sure, if you don’t take care of the machine that feeds you, you’ll never have the opportunity to make that choice. There really are two ways to run one of these businesses – or any type of business. It all goes back to the question of: “Do you run a small business that allows you to make a living, or do you run an entrepreneurial venture that has value at the end?” One of my clients, Paul Greenhagen, CEO of Westwood Professional Services (No. 6 on the Zweig Group 2014 Hot Firm List) likens the “small business choice” to being a housepainter. “They may make a living for 40 or more years painting houses. But at the end, all they have to show for it is some old ladders and rollers they can sell at a yard sale,” he says. So what are you – a marshmallow eater or someone who knows that if you let them sit there for a little while with the bag open they’ll improve with age? If you want to end up with more than some old desks and office equipment to sell cheap, I hope you’re one of the latter... Mark Zweig is the chairman and CEO of Zweig Group. Contact him with questions or comments firstname.lastname@example.org.
This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1077, originally published 10/27/2014. Copyright© 2014, Zweig Group. All rights reserved.