The psychology of time discounting is the idea that people value immediate rewards more highly than future rewards. This means that people tend to prioritize short-term gains over long-term benefits. In a business setting, this can manifest in a variety of ways, including:

1. Employees choosing to take a lower salary now in exchange for higher bonuses in the future.
2. Managers prioritizing short-term projects that deliver quick results over longer-term initiatives that may have more significant long-term benefits.
3. Teams choosing to put off difficult decisions or tasks in favor of more enjoyable or easier tasks that can be completed in the short term.
4. Employees choosing to spend their time on activities that provide immediate rewards, like checking social media, rather than tasks that may be more important but offer less immediate gratification.
5. Organizations prioritizing short-term financial gains over long-term sustainability or social responsibility.

To overcome the challenges of time discounting in a business setting, change managers can use the following strategies:

1. Frame the benefits of the change in terms of their immediate value. Instead of talking about how the change will improve things in the long run, focus on the benefits that people will see right away.
2. Use loss aversion to motivate people to take action. People are more likely to act if they think they might lose something, so frame the potential downsides of not implementing the change in a way that will motivate people to take action.
3. Use commitment devices to help people stick to their goals. Set up a system where people have to publicly commit to the change, which makes it more difficult for them to back out later on.

As change managers, we often focus on the tangible aspects of implementing change – the resources, the timeline, and the budget. But there's another crucial factor at play: the psychology of time discounting.

Time discounting is the idea that people value immediate rewards more highly than future rewards. In other words, we prioritize happy hour over retirement savings. This can significantly impact change management, as people may be more likely to resist change if it means giving up something fun in the present for the sake of a future reward.

To overcome this challenge, change managers can use a few strategies from the field of behavioral economics. For example, we can frame the benefits of the change in terms of its immediate value. Instead of talking about how the change will improve things in the long run, we can focus on the benefits that people will see right away, like finally being able to take that long lunch break they've always wanted.

Another strategy is to use loss aversion to our advantage. People are more likely to act if they think they might lose something, so we can frame the potential downsides of not implementing the change in a way that will motivate people to take action, like the embarrassment of being the only one left at the office while everyone else is at happy hour.

Finally, we can use commitment devices to help people stick to their goals. For example, we can set up a system where people have to publicly commit to the change, which makes it more difficult for them to back out later on, and ensures they get all the happy hours.

Three action items that change practitioners can use to mitigate time discounting;

1. Frame the benefits of the change in terms of their immediate value.