In an Age of Impatience, Long-Termism Matters More | Oasis Signal

Editor's Note: On the afternoon of February 26, 2022, the 42nd Peking University National School of Development MBA Forum and MBA program info session was held online. This event featured a keynote speech by Professor Yuzhen Gong, Professor of Management at the National School of Development, Associate Dean of the BiMBA Business School, and Deputy Director of the Academic Committee. This article is adapted from his presentation.

Prologue: Two Stories

Let me start with two stories. The first is about Huawei's strategic choice between Little Smart (PHS) and 3G.

At the end of the last century, China Telecom launched the Little Smart service. UTStarcom and ZTE rode this business to rapid growth. UTStarcom's annual revenue once reached 10 billion RMB — a figure tantalizing enough to make any company take notice.

Huawei's management certainly saw this opportunity and quickly submitted a plan to enter the Little Smart market. But to everyone's surprise, Ren Zhengfei rejected it.

Ren's reasoning was that Little Smart was destined to be a transitional, short-lived technology, while 3G represented the future. Huawei could not be an opportunist.

In his view, missing out on Little Smart might mean forfeiting a chunk of profit — acceptable. But missing 3G would seriously derail Huawei's path to becoming a great company. That would be a fundamental strategic error, absolutely unforgivable.

Huawei therefore poured most of its human and financial resources into 3G, which had not yet been commercially deployed anywhere in the world. Eight years later, in 2009, Huawei finally obtained its first 3G license.

We all know what happened next — Huawei soared, leaving all competitors behind. It was precisely this bold bet on 3G and sustained investment that made Huawei what it is today.

As for UTStarcom, which once dominated half of China's Little Smart market and basked in the limelight — it's now difficult to find any trace of this company in the mainstream market.

The second story is about Jack Ma and Alibaba Cloud.

Today, Alibaba Cloud ranks first in Asia-Pacific and third globally in cloud computing. Baidu should have had the advantage in this space, so why is Baidu Cloud so far behind Alibaba Cloud?

The investment required for cloud computing was enormous — over a billion RMB annually, for several consecutive years. This created tremendous financial pressure for Alibaba, with no visible hope in sight. Wang Jian, who led Alibaba's cloud computing efforts at the time and is now an academician at the Chinese Academy of Engineering, was once widely considered a fraud.

For years, Alibaba's annual strategy meetings debated the same question: should we cancel this project and disband this team? The cloud computing team lived in constant anxiety, never knowing when they might be dissolved.

At the most difficult moment, Jack Ma visited the cloud computing team and told them: We must do cloud computing, and I'm going to invest 10 billion RMB. The team's morale instantly lifted — they knew they were safe.

In 2012, Baidu, convinced that cloud computing had no future, disbanded its own cloud computing team. This team was later absorbed almost entirely by Alibaba. The final outcome of the cloud computing race was essentially sealed from that moment.

Jack Ma once said: Every decision Alibaba makes today is for strategic positioning seven or eight years down the road. Alibaba Cloud's ultimate victory rested on this kind of long-term strategic thinking.

Three Types of Victory

We all want to win. "Winning" has become a buzzword today. But what kind of victories should we actually fight for? What kind of victory do we truly need?

Chunhua Chen, Dean of the BiMBA Business School at Peking University's National School of Development, has an excellent perspective on this. She says there are three types of victory: opportunists can only achieve temporary victories, pragmatists can achieve阶段性 victories, and only long-termists can win sustained victories.

I fully agree with Professor Chen's view. I originally studied history, so I can echo her perspective from the long-term patterns of organizational rise and fall throughout history.

Historically, no bandit or warlord force has ever truly succeeded. When the dust settles, it becomes clear that the ultimate victors are always those with clear long-term vision.

This is a fundamental truth history teaches us: only by adhering to long-termism can we achieve lasting victory.

Why Is Long-Termism So Difficult?

Since long-termism is so important and so beneficial, here is the question: why are long-termists so rare? Why are we even discussing long-termism here today?

Simple: because long-termism is extraordinarily difficult.

Looking back at Ren Zhengfei's decision regarding Little Smart, we today admire his vision and strategic brilliance for making the right choice. But who knows how much pressure Ren actually endured at the time?

Ren gave up on Little Smart, but from 2000 to 2003, Little Smart continued to grow. UTStarcom transformed from an obscure small company into a star enterprise. ZTE also profited handsomely from the Little Smart market, using those profits to squeeze Huawei's market share. In 2003, ZTE's sales briefly reached 80% of Huawei's.

Huawei was the leading Chinese telecommunications equipment manufacturer, yet during this period it reaped almost nothing. Huawei missed the window to capture the Little Smart market, and to make matters worse, the 3G license was repeatedly delayed, so Huawei's massive investment in 3G yielded no returns for a long time.

In 2002, Huawei experienced massive losses for the first time. Many lost confidence in the company, believing Ren had made a fatal and foolish error. Numerous people left Huawei for what seemed like better opportunities at the time.

Ren later said: "I was depressed for eight to ten years because of Little Smart, because of TD. If I didn't allow it, would the company go wrong and collapse? If we did it, would we lose the resources to compete for strategic high ground?"

Let's reconstruct Ren's situation: immediate gains were within reach, current pressures were real and tangible, but future returns were uncertain. If you were Ren Zhengfei, what would you have done?

Anxiety, depression, hesitation, second-guessing, even giving up. This is the reality long-termists must constantly face.

In the 1960s, there was a famous "Stanford Marshmallow Experiment." American psychology professor Walter Mischel at Stanford University selected several dozen preschool children and had them sit in chairs for 15 minutes. On the table in front of them was their favorite treat: a marshmallow.

The rules were: if you ate the marshmallow immediately, no reward; if you waited 15 minutes, you would receive an additional marshmallow as a reward; children who didn't want to wait could ring a bell on the table.

Once the experiment began, researchers found that a small number of children immediately grabbed and ate the marshmallow without hesitation. Some children began ringing the bell after about 30 seconds. In the end, only about 30% of children waited the full 15 minutes before eating.

Researchers tracked the participants and found that those willing to wait achieved greater success later in life, including career success. Those less adept at waiting were more likely to be overweight as adults, had lower achievements, and many developed drug problems.

This experiment introduced the concept of "delayed gratification." Those capable of delayed gratification consistently achieve greater success.

Yiming Zhang, founder of ByteDance, has a favorite phrase: "delayed gratification." His success also tells us that delayed gratification is indeed important. The problem is, we all understand the logic, but why can so few individuals and organizations truly practice "long-term thinking" and "delayed gratification"? Why is long-termism particularly difficult?

This is an important research topic in neuroscience, psychology, and behavioral economics today: "intertemporal choice theory." That is, people's tendency to choose between larger-later (LL) rewards and smaller-sooner (SS) rewards.

All research in this area reaches the same conclusion: relative to future rewards, people typically assign greater weight to rewards available in the present. Put plainly, people value what they can get right now more highly.

The reason is simple. Humans evolved from animals. Though we developed the capacity to plan and strategize for the future, when making intertemporal choices, we — like other animals — still prefer immediate rewards.

Some researchers have explored the neural mechanisms of intertemporal choice. In 2004, Science magazine published a famous report that first demonstrated from a neural mechanism perspective that the human brain has two different evaluation systems: β and δ.

The β mechanism is concentrated in the early-evolved mesolimbic dopamine system, primarily responsible for processing current options — immediate decisions, immediate temptations, immediate interests. The δ system is a relatively later-evolved frontoparietal system, primarily responsible for processing delayed options — decisions involving delayed gratification.

The former is the instinct for survival; the latter is the need for evolution. The relative activation levels of these two systems determine the subject's choice. During selection, if our β system is activated, we choose current rewards; if the δ system is activated, we choose delayed gratification.

Related to this is another cognitive mechanism theory of intertemporal choice: the hot/cool system theory. This theory posits that two systems exist in human cognitive mechanisms. The hot system is associated with individual impulsive behavior; it is emotion-driven, manifesting as simple conditioned reflexes, thus relatively fast — an earlier maturing system. The cool system is associated with individual self-control; it is cognition-driven, more deliberative, and therefore slower — a later maturing system.

The interaction between hot and cool systems determines individual performance in delayed gratification. When the hot system dominates, individuals tend to choose smaller-sooner rewards; when the cool system dominates, individuals tend to choose larger-later rewards.

Building on this, scholars have proposed the Multiple-Selves Theory of human intertemporal choice: "myopic self" versus "farsighted self," "planner" and "doer," "sophisticated self" versus "naïve self," and so on.

Theory is dry, and I don't want to elaborate too much on theory itself here. What interests us is: what do these research findings tell managers?

Each of us has two sides; we all carry the shadow of short-termism within us. Valuing immediate rewards more highly is part of human nature, and besides, the future holds great uncertainty.

For ordinary people, the greater the current pressure or immediate temptation, the more easily the short-sighted side is activated, and the more likely people are to exhibit short-termist tendencies.

Even long-termists feel impulses toward short-term behavior, even moments of wavering. Everyone experiences internal struggles.

This is why Ren Zhengfei, even after choosing the long-termist path of 3G, still felt depressed and pressured about giving up on Little Smart. I believe Robin Li is also a long-termist, and Baidu is a company with long-term aspirations — but why did they once abandon cloud computing midway? The same principle applies.

This is the fundamental backdrop that makes long-termism so difficult to sustain.

The Long-Term Damage of Short-Termism

Long-termism is difficult, but why must we still choose it? Simple: because short-termism causes us long-term harm.

Our topic today is primarily management, so let's examine the damage short-termism causes to managers and organizations.

The first harm of short-termism to management is at the leadership level. Short-termist leaders inevitably exhibit characteristics of lacking vision and being selfish. Those without vision are destined to accomplish nothing; those who are selfish will find no one willing to follow them.

Everyone has self-interest, but leaders must enable more people to work for them, even employing those stronger than themselves, to achieve great things. Therefore, leaders must transcend the small self to achieve the greater self. Selfishness inevitably leads to alienation and isolation.

The second harm of short-termism to management is at the decision-making level. Confucius, 2,500 years ago, revealed the dangers of short-termism with two excellent sayings: "If you pursue small gains, great things cannot be accomplished." "If a man takes no thought about what is distant, he will find sorrow near at hand."

Decision-making is like playing chess. Some can see three moves, five moves ahead, even further; some move one step at a time, only seeing what's in front of them.

After a certain level of chess skill, why do some people still fail to become top-tier players? Because their grasp of the overall situation is weak, making them particularly prone to getting caught up in immediate and local battles without controlling the entire board. You might win local victories, but you won't know how to leverage them.

What does "if a man takes no thought about what is distant, he will find sorrow near at hand" mean? Without long-term perspective, people easily lose direction in complex environments, getting caught in various entanglements, in constant worry about gains and losses. The same applies to enterprises: winning the present but losing the future; winning locally but losing globally.

Overemphasizing immediate performance causes neglect of other more important factors, which in turn creates bigger problems for the enterprise and harms its long-term development.

The third harm of short-termism to management is at the organizational level. Organizations accustomed to making quick money can no longer fight hard battles. Where everyone rushes in together, the result is invariably everyone scattering.

For organizations, the most taboo pattern is advancing a thousand li in victory, yet collapsing completely in defeat. History has many such examples. Why did peasant rebel armies like those of Huang Chao, Li Zicheng, and Zhang Xianzhong ultimately fail? Their common characteristic was capturing cities, recruiting soldiers, moving from province to province, living off plunder — going wherever the grain was, moving on when it ran out. These people overlooked a fundamental point: the building of organizational capability itself. They never had stable foundations. This is so-called "banditism."

The manifestation of banditism in the business world is making quick money — enterprises that acquire and acquire without core competitiveness; enterprises that jump from opportunity to opportunity without core strengths.

Historically, all victories achieved by bandits were rootless victories, destined to be mere passing episodes in history, forever remaining heroic outlaws unable to accomplish great things.

Fundamentally, short-term behavior appears rational on the surface, but viewed from a long-term perspective, it is actually irrational — because this short-term behavior exchanges tomorrow for today's gains.

From the history of evolution, we can clearly see: short-term behavior is merely based on survival instinct; long-termism is the true mark of maturity. This applies to individuals and organizations alike.

We cannot simply live trapped in instinct; we must think about and plan for the future. This is the most important quality distinguishing humans from animals.

Whether one possesses this future orientation, and the degree of that orientation, is in fact the difference between excellent and mediocre individuals, between excellent and mediocre organizations. We all have limitations and weaknesses. Only by acknowledging limitations can we transcend them; only by confronting weaknesses can we escape the trap of short-termism.

The Value of Long-Termism

The choice between short-term and long-term is essentially a process of resource allocation. Short-term behavior invests resources in the present, passively responding to environmental changes; long-termism invests resources in the future, actively shaping one's own destiny.

Individual and organizational resources are always limited. Where you allocate your resources determines what results you reap. Only long-termism allows you to transcend the immediate moment and place, developing unique capabilities and advantages, and to grasp your own and your organization's direction and destiny from a longer time dimension.

Why do we need long-termism? We can analyze this from several angles:

First, from the perspective of purpose. If a person knows only speculation, then even with careful calculation and painstaking management, they cannot go far. The speculator's path grows narrower, their situation increasingly difficult. More importantly, they lose the possibility of a better future. Long-termism can provide clear direction and sustained motivation for our lives. Sense of direction and motivation are two crucial conditions for success in life and in organizations.

Second, from the perspective of cognition. Short-termism responds to impatience with impatience, to shortsightedness with shortsightedness. Long-termism gives us an entirely new cognitive framework, allowing us to see from a longer time dimension which are merely temporary noise, bubbles, and distractions, and which are the true megatrends — thus enabling us to maintain inner composure, tranquility, and resolve in an impetuous and changeable era.

The Great Learning has a passage: "When you know where to stop, you have stability. When you have stability, you can be tranquil. When you are tranquil, you can be at ease. When you are at ease, you can deliberate. When you can deliberate, you can attain." This describes the entire process from cognition to final result. Knowing what you want in the future gives you stability; with stability comes tranquility; without restless movement of mind comes composure and peace; then deep thinking can unfold, and the best solutions to problems can be found, yielding the best results.

Chinese people speak of "power and profit" — profit and power are inseparable. Where there is power, there is profit; only with great power can there be great profit. Therefore, do not seek profit first; seek power first. If you only stare at small immediate profits, at most you will obtain small profits; only by securing great power can you obtain great profit.

The Art of War states that true masters "seek power from the situation, not blame people" — they focus on leveraging and creating situational power rather than demanding perfection from team members or subordinates. The same applies to enterprise management. When facing problems, without long-term thinking, without stepping back to see the bigger picture, one only argues about specific people and specific matters. Long-termists consider problems from the perspective of "power," solving them fundamentally.

These are two completely different cognitive patterns. Only long-termism enables choices based on the long term. This is the value of cognition.

Third, from the perspective of action. Long-termism can imbue our immediate actions with profound meaning, giving our efforts consistency and continuity.

Long-termism does not reject short-term behavior, nor does it reject present choices. As mentioned earlier about chess — of course you move piece by piece. But a chess piece without long-term consideration is a wasted piece; only when connected by clear strategy does each piece's strategic value and meaning truly emerge.

Long-term thinking and planning for the future causes us to more fully consider how current actions will affect the future, thereby permeating long-term goals into present decision-making, using long-termism to filter our short-term behavior.

The benefit is that we understand what each step is accomplishing, and how achieving each specific goal contributes to overall, long-term objectives. Thus when we organize and filter immediate actions, we won't be swayed by short-term temptations, won't fall into the trap of short-termism, and can know what to do and what not to do — preventing short-term behavior from harming long-term development.

In this way, we can develop tactical opportunities into strategic victories, and immediate opportunities into long-term victories.

Fourth, from the perspective of competition. Long-termism is the best choice for escaping involution-style competition.

Not all individuals or organizations will choose long-termism. This is why the ultimate victors are invariably long-termists.

Former Amazon CEO Jeff Bezos said: If you approach something with a three-year horizon, you'll have many competitors; but if you extend that to seven years, few companies will compete with you, because very few companies are willing to plan that far ahead.

Bezos once asked Warren Buffett: Your investment philosophy is so simple, why don't others copy it? Buffett replied: Because nobody wants to get rich slowly.

Long-termism actually goes against human survival instinct. Not everyone can do it, nor will everyone choose it. But we know: the road less traveled is the best road. On the path of long-termism, you won't encounter many competitors. So long-termism is the best choice for escaping present involution-style competition.

How to Become a Long-Termist?

First, long-termism is a form of awakening.

To practice long-termism, we must first recognize that both we ourselves and our organizations operate with two systems, and that we all have a short-termist side within us.

This is the reality we must first recognize and acknowledge. Therefore, we must constantly guard against short-termist impulses, consciously choose and continuously strengthen our long-termist qualities.

Long-termism needs to be activated, and can be activated; it needs to be strengthened, and can be strengthened. Long-termism is a value system, and can become a habitual mode of thinking and behavior.

In other words, both people and organizations are malleable. Short-termism exists like gravity; what we must do is constantly use long-termism to calibrate our behavior, ensuring we don't deviate from the long-termist主线. The ancients said "examine myself three times a day." If you don't recognize the dual systems within yourself and your organization, you will easily slide into short-termism without realizing it.

Second, long-termism is a belief.

Long-termism is a choice about the future, and the future is uncertain, not yet reality. So once people lose belief in the future, they abandon long-termism and pursue short-term interests.

Professor Hu Dayuan and I teach a course at the National School of Development where we take students to experience the "Four Crossings of the Chishui River" firsthand, showing everyone how to make decisions and lead teams in uncertain environments. The Four Crossings were part of the Long March. The Long March was great, but did every participant make it to the end? No.

Some deserted, some defected, some surrendered. Some early famous figures simply disappeared. These departures share one characteristic — their beliefs wavered.

Pessimists more easily choose the present; optimists more easily believe in the future.

Only with confidence in the future will people put aside smaller immediate returns to pursue larger long-term returns. The stronger one's belief about the future, the more one tends toward long-termism when making choices, and the better one can endure loneliness and pain. Some even regard this persistence as a joyful process, as self-breakthrough and self-realization, gaining tremendous satisfaction from surpassing others.

As a long-termist, you must believe in your beliefs before you can truly see your future, before the future becomes real. Long-termism is the only support point enabling sustained and enduring development for individuals and organizations.

Specifically, I believe we need the following six "beliefs":

First, believe in the power of the long term. Believe in your long-term rationality. Between big and small, choose big; between long and short, choose long. Long-term rationality allows you to think about problems from a larger framework, higher perspective, and longer time horizon, enabling you to make the most rational choices.

Don't let short-term rationality lead to long-term irrationality. Believe that your long-term rationality is correct. Restraint and patience are the noblest qualities of human rationality. Believing in the power of the long term enables you to possess such qualities.

Second, believe in the power of belief. The intertemporal choice research mentioned earlier found that positive hope can improve individuals' self-control in intertemporal choices. The more positive and believing one is, the stronger the self-control during choice.

Belief means believing that positive ideals can certainly be realized. Strong belief is the primary source of power for individuals and organizations. Whether in military history or in entrepreneurship today, a core reason why weak organizations ultimately prevail is that they possessed strong belief from the very beginning and believed in that belief.

A crucial point at this "belief in belief" level is that you must create team atmosphere, because members' views and behaviors within an organization can influence each other, and beliefs can mutually inspire.

A particularly interesting phenomenon is that long-termist leaders attract long-termist followers, while short-termist leaders inevitably attract subordinates or team members who only pursue short-term interests. From this perspective, belief, trust, confidence, and faith can positively reinforce each other in a virtuous cycle.

Mutual trust within a team makes members more inclined to believe in the team's overall belief. A group of people together, mutually attracting and inspiring each other, release infinite potential and ultimately transform belief into reality. This is the power of belief.

A statement by Professor Ming Zeng that I very much agree with: An organization's vision is for believing, not for challenging. If members doubt and question the organization's vision, things simply won't get done. You must believe in it for it to become reality.

Third, believe in the power of symbiosis. No matter the field, competitive and adversarial mindsets will affect your strategy and thinking. If you get trapped in a death spiral of outdoing your rivals, even if you win, it's a pyrrhic victory.

If you look from the present to the future, your vision will inevitably be confined to resource competition, and your eyes will see only rivals. But if you look from the future to the present, from a long-termist perspective looking back at now, you focus on how to create the greater future — even present competitors can be incorporated into your co-creation of that greater future.

So don't only stare at temporary wins and losses; focus on the evolving greater situation. Only by believing in the power of symbiosis can you transcend momentary and local gains and losses.

Fourth, believe in the power of fundamentals. Fundamentals are the basic strengths in management: talent, culture, strategy, organization, leadership, execution. Whether in military affairs or in today's commercial world, we often find ourselves in浮躁 environments where individuals and organizations easily lose themselves along the way. Ultimately, it is the most basic, simplest, most ordinary, and most质朴 common-sense elements of management, and their dynamic matching, that determine how far you and your organization can go. Only with solid organization can you fight better battles and achieve greater, sustained victories.

We often oppose immediate short-term performance against long-term organizational investment; emphasizing present performance often causes neglect of long-term organizational development. But truly good organizations, true long-termists, create opportunities for better and greater performance by building organizational capability and solidifying fundamentals. More fundamentally, solidifying your and your organization's fundamentals strengthens organizational roots, enabling you to stand firm through great storms in turbulent environments.

Fifth, believe in the power of focus. We must continuously invest and accumulate in one clear direction. Long-term value creation is necessarily a continuous process. As long as your general direction is correct, as long as you're willing to continuously invest in this direction, your probability of ultimate great success is much higher than if you struck out in all directions.

Sixth, believe in the power of goodness. Industries and markets constantly change, but we see that humanity's great direction of goodness and altruism has never changed. From an evolutionary perspective, this is necessary for human survival and development. Because only behaviors benefiting society's overall interests receive society's long-term rewards. Only societies forming cooperation, altruism, and goodness can survive and develop in evolutionary competition.

Almost all world religions and global ideological systems teach goodness. The same applies to enterprises. The ultimate meaning of enterprise is creating social value and promoting human progress. Only such enterprises can win society's recognition and respect, forming positive interaction and virtuous cycles with society.

Enterprises must certainly pursue profit, but enterprises lacking moral sense cannot go far. Long-term success is necessarily success of values; great enterprises are necessarily good enterprises. This is a spiritual core making oneself and one's organization strong, enabling survival through any setbacks and continuous development. This is the greatest difference between mediocrity and excellence.

Enterprises that create long-term value for society will ultimately receive long-term rewards from society.

Finally, long-termism is a practice.

Recognizing long-termism is easy; doing it is extremely difficult. We must recognize this reality, because human nature has weaknesses, and we forever face the struggle between the two systems in our brains.

Knowing is easy; doing is hard. Between long-term and short-term, between global and local, between pursuing mission and chasing immediate interests — at critical moments when these conflicts arise, how you choose most reveals what you fundamentally pursue, and most determines your and your organization's ultimate fate.

In persisting with long-termism, you will waver, doubt, and hesitate — but this is precisely the process of you and your organization growing and maturing.

Conclusion

How to become a long-termist? Simple: do what is difficult but right. Management means doing what is difficult but right; life means doing what is difficult but right.

Returning to our theme: In an impetuous era, why do we need long-termism? Because it is the only difficult but right thing.

I very much like this passage: "True light is never without darkness, but is never overcome by darkness. True heroism is never without base sentiments, but is never subdued by base sentiments."

Adapting this, I would say: True long-termists are never without impulses toward short-term choices, but are never swayed by short-term impulses.

Finally, I want to end with song lyrics: "Should I find a reason to go with the flow? Or bravely move forward, breaking free from the cage? How should I exist?"

This is the question posed by singer Wang Feng, and it is each of our own questions. The road is beneath our feet; people can choose. What road you choose determines what kind of life you will have.

Oasis Capital is a new-generation venture capital firm in China, dedicated to discovering the most vital entrepreneurs of the next decade and growing alongside them to create long-term value. "Participating in vitality" is Oasis's vision and mission. This vitality is both the direction of era-defining structural transformation and the resilience and evolutionary power of entrepreneurs. Oasis Capital focuses on early and growth-stage investments, with individual investments ranging from $3 million to $30 million, concentrating on technology-enabled services including healthcare and enterprise services, supporting China's new service upgrade driven by technology.