Purpose and short-termism
Are these mutually exclusive, or is this a trend?
Introduction, the ‘pitch’
In the series of articles that we plan to write for ExO Insight, we will focus on day-to-day observations in the realm of.... Things that strike me as special or not so special anymore (which makes them interesting to highlight to reveal their uniqueness). Whether big or small, we will describe these observations against the background of today’s immersive exponential dynamics.
We’ll do our utmost to write short articles. Sometimes the articles will run a little longer, but we promise to keep them interesting (I don’t always have time to write short stories, so this is akin to a variation on Churchill’s letters to Roosevelt).
As far as I (Paul) can remember, I tend to question everything I see, hear, or experience. I can tell you that life is much easier if you don’t do that. I must confess that I sometimes get tired of myself. But that's who I am (or, at least, this is a certain quality of my thinking).
It will come as no surprise to you then that my purpose arises from this 'being,' which can be summarized as "Ignite Critical Thinking to Adapt and Thrive."
The purpose is in!
Together with Alina Solotarov (with whom I have been discussing deeply the impact of exponential technologies on our lives), I’d like to share an observation that has been bothering me for some time. It has been popular for a while to talk about purpose. Purpose is in! A company that has no purpose, well, they can’t be saved. They will sink into a deep swamp and soon be forgotten. Millennials, Gen Z and Gen Y will avoid them by a mile because they want to go for a long-term goal that should ultimately lead to a better world for all. Of course, we should not confuse ‘purpose’ with ‘long-term vision’, ‘mission’ or ‘strategy.’ A purpose, in the end, is a purpose, right? Now, the question we would like to explore is, “Is the long-term perspective of the purpose overshadowed by the short-term effects of exponential technologies?”
To stick to the promise of being short as well as respecting the phenomenon of ‘short termism,’ we came up with an algorithmic ingenuity: splitting! The result is an article consisting of multiple parts.
Let’s take a look at some of the parts covered in this article and in the series ahead.
- A nagging observation
A critical look at some (MT)Ps
There is more, the need for (IMT)Ps
- Hyperbolic discounting extended
Fear of missing out (FOMO)
Think fast, think slow
Does exponential growth make us lazy?
- The time paradox
- Exponential growth - the fuel for ultrashort termism (UST)
- Trading and dynamics
- Solutionism, the technology fallacy
A recipe for a good night rest
A nagging observation
The question that has been bothering both Aline and I, for a while is, why is there such a strong dichotomy between the nature of long-term thinking, wrapped in a purpose, and short-termism that we see all around us? We are extending this phenomenon by the tendency of making immediate decisions, (ultra) short messages (including pitches) because people don’t have time or limited span of attention, blitz trading (entry and quick exit), etc.
Originally, short-termism applied to the relationship of shareholders and board management with respect to the return of investments and quarterly gains of a company. A myopic view. We will elaborate by fleshing out one of the many cognitive biases known as ‘hyperbolic discounting’ related to short-term thinking and acting. Hyperbolic discounting is people’s tendency to value smaller, near-term rewards over larger, longer-term benefits. It’s characterized by selfishness and irresponsibility. It’s a bias mainly used in economics, but we extended the use to short-termism that we observed as an effect of exponential dynamics. Hence, let’s try and ask ourselves: ‘what if we would bring the exponentially dynamic era into the mix’? Does exponential technology serve as fuel for hyperbolic discounting? Answering this question is not a journey into judging whether this is good or bad; instead, the answer will be merely descriptive and critical. It will be up to you to make your own moral judgments on this matter.
Even though the ExO community knows all about ‘purpose’, we think there will be no harm in spending a few words on the popularity of purpose. Members of this community tend to speak of MTP (Massive Transformative Purpose). So, for now, we’ll shorten this to ‘purpose’ and then come back to MTP.
Attending, following, and even moderating discussions about purpose left us with quite some ambiguity. It did not provide us with enough confidence needed to guide companies or individuals towards their purpose, the ‘Why’ of being, as an individual, a company, or a public organization Among others, Sinek, Palao, Kaufman wrote about the ‘Why,’ ‘Purpose,’ ‘Passion’ or even ‘Obsession.’ (1) Those who are interested in finding their own purpose can start with this survey featured in the Greater Good Magazine at Berkeley.
With diverse participants and motives, and a multi-interpretable topic, we were ‘loaded’ with ambiguity. Why? Well, we’re hearing a lot of words, many of which are buzzwords, such as passion, north star, tailwind, obsession, and meaning, indicating that a purpose is something intangible. Kaufman defines purpose ‘as the need for an overarching aspiration that energizes one’s efforts and provides a central source of meaning and significance in one’s life.
Having a purpose often causes a fundamental reordering of the most central motives associated with the self’ (Transcend, p.155). The central words are meaning, energy, self, and motives. To make this intangible world more tangible, we must focus on behavior as an expression of purpose. This can mean the behavior of people (who may have an individual purpose) or that of companies that may have a ‘collective’ purpose.
For the purpose of this ‘Insight’ article, we would like to focus on the latter. How are we measuring, checking, relating, or supporting the purpose of a company? During the conversations, we noticed that the focus easily is tilted towards ‘Massive’ and ‘Transformative.’ It obviously was easier to identify ‘massive behavior’ as well as ‘transformative behavior as opposed to purpose.
This article was written in collaboration with Alina Solotarov, Research, Xponential https://xponentialtalks.com
- Start with Why, S. Sinek, 2011; Find your Why, S. Sinek, 2017; Massive Transformative Purpose, F. Palao, 2020; Transcend, the new science of actualization, S.B. Kaufman, 2020; Moonshots, creating a world of abundance, N. Jain, 2018.
This article is part of a series on The Price of Exponential Growth: Will it still be relevant that what we don’t want. Be sure to catch each one. (Links will be provided below as they are published)
Does Exponential Growth Have A Price? Time, And A Lurking Paradox (Part 1)
A Critical Look At Some (MT)Ps (Part 2)
Nature’s Ingenuity (Part 3)
One of the kindest things you can do is to share this information if you found it informative or it increased your understanding in some way. Please use the social sharing buttons or whatever method you like and share on your favorite social channel! Karma is cool and you'll look cool for sharing.
ExO Insight Newsletter
Join the newsletter to receive the latest updates in your inbox.