Product Gems

💎 On how signals of status (like an expensive car) affect behaviour

The students were unanimous. And full of bravado. Of course they would honk. And they certainly wouldn’t make any distinction between the two cars. Some claimed they would honk sooner at the high-status car. But what actually happened on the roads that subsequent sunny Sunday morning told a different story. Whilst overall close to 70 percent of waiting drivers sounded their horns in frustration, the distribution of results was unevenly split between the two cars. Fewer than 50 percent honked at the high-status car; 84 percent hooted at the lower-status car. Not only was a Californian driver’s likelihood to honk influence by the status of the car that was delaying them, but their latency to honk was influenced, too. When behind a low-status car, people would sound the horn much sooner than when behind a high-status one. Very often, more than once.

Excerpt from: Messengers: Who We Listen To, Who We Don’t, And Why by Stephen Martin and Joseph Marks

💎 On the technique of assumption reversal for generating new perspectives and ideas (e.g Uber)

Michael Michalko, a former US army officer who has become a leader in creativity, advocates ‘assumption reversal’. You take the core notions in any subject or proposal, and simply turn them on their head. So, suppose you are thinking of starting a restaurant. The first assumption might be: ‘restaurants have menus’. The reversal would be: ‘restaurants have no menus’. This provokes the idea of a chef informing each customer what he bought that day at market, allowing them to select a customised dish. The point is not that this will necessarily turn out to be a workable scheme, but that by disrupting conventional thought patterns, it might lead to new associations and ideas.

Or, to take a different example, suppose you are considering starting a new taxi company. The first assumption might be: ‘taxi companies own cars’. The reversal would be: ‘taxi companies own no cars’. Twenty years ago, that might have sounded cray. Today, the largest taxi company that has ever existed doesn’t own cars: Uber.

Excerpt from: Rebel Ideas: The Power of Diverse Thinking by Matthew Syed

💎 On the danger of not recognising the theories that guide your actions (as John Cleese notes)

John Cleese, the British comedian, put it this way: ‘Everybody has theories. The dangerous people who are not aware of their own theories. That is, the theories on which they operate are largely unconscious.’

Excerpt from: Rebel Ideas: The Power of Diverse Thinking by Matthew Syed

💎 On the benefits of efficiency and the dangers of pursuing it too far (it’s worth being a little messy)

Sometimes (often actually) in business, you do know where you’re going, and when you do, you can be efficient. Put in place a plan and execute. In contrast, wandering in business is not efficient… but it’s also not random. It’s guided – by hunch, gut, intuition, curiosity … it’s worth being a little messy and tangential to find out way there. Wandering is an essential counterbalance to efficiency .. The outsized discoveries – the ‘non-linear’ ones – are highly likely to require wandering.

Excerpt from: Rebel Ideas: The Power of Diverse Thinking by Matthew Syed

💎 On the absence of an authority figure liberating others to express their genuine opinions (leadership comes at a sociological price)

A clever study by the Rotterdam School of Management analysed more than three hundred real-world projects dating back to 1972 and found that projects led by junior managers were more likely to succeed than those with a senior person in charge. On the face of it, this seems astonishing. How could a team perform better when deprived of the presence of one of its most knowledgeable members?

The reason is that this leadership comes at a sociological price when linked to a dominance dynamic. The knowledge squandered by the group when a senior manager is taken out of the project is more than compensated for by the additional knowledge expressed by the team in his absence.

Excerpt from: Rebel Ideas: The Power of Diverse Thinking by Matthew Syed

💎 On nothing in life being as important as you think it is while you are thinking about it (the focusing illusion)

I’ve been to several scientific conferences at which Professor Kahneman has spoken; and, when Daniel Kahneman talks, people listen. I am invariably among them. So I took special notice of his answer to a fascinating challenge to put to him not long ago by an online discussion site. He was asked to specify the one scientific concept that, if appreciated properly, would most improve everyone’s understanding of the world. Although in response he provided a full five-hundred-word essay describing what he called “the focusing illusion,” his answer is neatly summarized in the essay’s title: “Nothing in life is as important as you think it is while you are thinking about it.”

Excerpt from: Influence: The Psychology of Persuasion by Robert Cialdini

💎 On communication taking more of our time when technology makes it more efficient (Jevons’s paradox)

Today, information technology is changing the world making it more idea intensive, better connected, and ultimately more urban. Improvements in information technology seem to have increased, rather than reduced, the value of face-to-face connections, which might be called Jevons’s Complementarity Corollary. The nineteenth-century English economist William Stanley Jevons noted that more fuel-efficient steam engines didn’t lead to less coal consumption. Better engines made energy use effectively less expansive, and helped move the world to an industrial era powered by coal. The term Jevons’s paradox had come to refer to any situation in which efficiency improvements lead to more, not less consumption — one reason why low-calorie cookies can lead to larger waistlines and fuel-efficient cars can end up consuming more gas. Jevons’s paradox applied to information technology means that as we acquire more efficient means of transmitting information, like e-mail or Skype, we spend more, not less, time transmitting information.

Excerpt from: Triumph of the City by Edward Glaeser

💎 Sometimes words aren’t enough to change behaviour (demonstrations are more powerful)

At a school in the USA, the girls in their early teens had just discovered lipstick.

They would go into the female toilets to apply it.

Then, giggling, they’d leave imprints of their lips on the large mirror.

This made a lot of extra work for the cleaning staff.

The head teacher asked the girls to stop.

Of course, they ignored her.

So she took the girls to the toilets for a demonstration.

She said, ‘It takes a lot of work to clean the lipstick off the mirror.’

She said to the janitor, ‘Please show the girls how much work it takes.’

The janitor put the mop in the toilet, squeezed off the excess water and washed the mirror.

Then put the mop in the toilet again, and repeated the process. From that day on there was no more lipstick on the mirror.

That’s choice architecture.

Excerpt from: One Plus One Equals Three: A Masterclass in Creative Thinking by Dave Trott

💎 On the power of being specific in ads (Apple and the iPod)

My favorite example of the power of specificity was Apple’s introduction of the iPod. They didn’t give it the vanilla, global “World Class MP3 Player” treatment. They said “1,000 Songs In Your Pocket.” They were specific. They talked about the virtues of the product, not wooly melodramatic horseshit.

My direction to the creative teams who worked for me was always the same – be specific. Today the objective is to ignore the specific and “ladder up” the benefit.

Excerpt from: 101 Contrarian Ideas About Advertising: The strange world of advertising in 101 delicious bite-size pieces by Bob Hoffman

💎 On brands admitting a flaw (to make all their other claims more believable)

Guinness and AMV publicised the slowness of the pour with “Good things come to those who wait”. The National Dairy Council alluded to the high calorific content of cream cakes with “Naughty, but Nice”. (Incidentally, that strapline was coined by Salman Rushdie while working at Ogilvy & Mather.)

Admitting weakness is a tangible demonstration of honesty and, therefore, makes other claims more believable. Further to that, the best straplines harness the trade-off effect. We know from bitter experience that we don’t get anything for free in life. By admitting a weakness, a brand credibly establishes a related positive attribute.

Guinness may take longer to pour but boy, it’s worth it. Avis might not have the most sales but it’s desperate to keep you happy.

Excerpt from: The Choice Factory: 25 behavioural biases that influence what we buy by Richard Shotton

💎 On problem solving using variation, survivability and selection (Palchinsky principles)

What Palchinsky realised was that most real-world problems are more complex than we think. They have a human dimension, a local dimension, and are likely to change as circumstances change. His method for dealing with this could be summarised as three ‘Palchinsky principles’: first, seek out new ideas an try new things; second, when trying something new, do it on a scale where failure is survivable; third, seek out feedback and learn from your mistakes as you go along. The first principle could simply be expressed as ‘variation’; the third as ‘selection’.

Excerpt from: Adapt: Why Success Always Starts with Failure by Tim Harford

💎 On the local pub approach to (repeat) business

Yet there are, when you think about it, two different approaches to business. The is the ‘tourist restaurant’ approach, where you try to make as much money from people on their single visit. And then there is the ‘local pub’ approach, where you may make less money from people on each visit, but where you profit more over time by encouraging people to come back. The second type of business is much more likely to generate trust and yield positive-sum outcomes than the firsy.

How might people distinguish the second type of business from the first? Well, the scoop of extra fried you get at Five Guys is one such gesture – an immediate expense with a deferred pay-off. It is a reliable signifier that you are investing in a repeat relationship, not milking a single transaction. Likewise, when your company pays your salary this month, it says you are worth this money for now; when it sends you to Kitzbuhel, it signals that it is committed to you for a few years at least.

Excerpt from: Alchemy: The Surprising Power of Ideas That Don’t Make Sense by Rory Sutherland

💎 On how people responded not to the odds (of medical procedures) but to the way the odds were described to them

Lung cancer proved to be a handy example. Lung cancer doctors and patients in early 1980s faced two unequally unpleasant options: surgery or radiation. Surgery was more likely to extend your life, but, unlike radiation, it came with the small risk of instant death. When you told people that they had a 90 percent chance of surviving surgery, 82 percent of patients opted for surgery. But when you told them that they had a 10 percent chance of dying from the surgery — which was of course just a different way of putting the same odds — only 54 percent chose the surgery. People facing a life-and-death decision responded not to the odds but to the way the odds were described to them.

Excerpt from: The Undoing Project: A Friendship that Changed the World by Michael Lewis

💎 On how we have far too much confidence explaining what just happened, but have limited ability to predict what will happen (hindsight bias)

All too often, we find ourselves unable to predict what will happen; yet after the fact we explain what did happen with a great deal of confidence. This “ability” to explain that which we cannot predict, even in the absence of any additional information, represents an important, though subtle, flaw in our reasoning. It leads us to believe that there is a less uncertain world than there actually is, and that we are less bright than we actually might be. For if we can explain tomorrow what we cannot predict today, without any added information except the knowledge of the actual outcome, then this outcome must have been determined in advance and we should have been able to predict it. The fact we couldn’t is taken as an indication of out limited intelligence rather than of the uncertainty that is in the the world.

Excerpt from: The Undoing Project: A Friendship that Changed the World by Michael Lewis

💎 The power of precise numbers ($37,263)

The biggest thing to remember is that numbers that end in 0 inevitably feel like temporary placeholders, guesstimates that you can easily be negotiated off of. But anything you throw out that sounds less rounded — say, $37,263 — feels like a figure that you came to as a result of thoughtful calculation. Such numbers feel serious and permanent to your counterpart, so use them to fortify your offers.

Excerpt from: Never Split the Difference: Negotiating as if Your Life Depended on It by Chris Voss and Tahl Raz

💎 The Ackerman method of negotiating (a 6 step process)

1. Set your target price (your goal).
2. Set your first offer at 65 percent of your target price.
3. Calculate three raises of decreasing increments (to 85, 95, and 100 percent).
4. Use lots of empathy and different ways of saying “No” to get the other side to counter before you increase your offer.
5. When calculating the final amount, use precise, non-round number like, say, $37,893 rather than $38,000. It gives the number credibility and weight.
6. On you final number, throw in a non-monetary item (that they probably don’t want) to show you’re at your limit.

Excerpt from: Never Split the Difference: Negotiating as if Your Life Depended on It by Chris Voss and Tahl Raz

💎 On behavioural economics being an odd term (it’s just economics)

Behavioural economics is an odd term. As Warren Buffett’s business partner Charlie Munger once said, ‘If economics isn’t behavioural, I don’t know what the hell is.’ It’s true: in a more sensible world, economics would be a sub-discipline of psychology. Adam Smith was as much a behavioural economist as an economist – The Wealth of Nations (1776) doesn’t contain a single equation. But, strange though it may seem, the study of economics has long been detached from how people behave in the real world, preferring to concern itself with a parallel universe in which people behave as economists think they should.

Excerpt from: Alchemy: The Surprising Power of Ideas That Don’t Make Sense by Rory Sutherland

💎 On how much more we value items we’ve had a role in selecting (lottery tickets)

In general people prefer something freely chosen to the same thing forced upon them. The effect is dramatically revealed in a study that did not directly involve reward or punishment. Lottery tickets costing $1 each were sold to the employees of two companies. Some of the employees were allowed to choose the number of their tickets, others had no choice but were merely handed a ticket. Just before the draw, the experimenter approached each subject offering to buy the ticket back. The subjects who had no choice were prepared to sell back for $1.96 on average, but those who had selected their own tickets held out for an average of $8.67. There could be no better demonstration that we irrationally overvalue what we freely choose.

Excerpt from: Irrationality: The enemy within by Stuart Sutherland

💎 On how tolerating big mistakes can create the biggest learning opportunities (hypercorrection effect)

One of those desirable difficulties is known as the “generational effect.” Struggling to generate an answer on your own, even a wrong one, enhances subsequent learning. Socrates was apparently on to something when he forces pupils to generate answers rather than bestowing them. It requires the learner to intentionally sacrifice current performance for future benefit.

Kornell and psychologist Janet Metcalfe tested sixth graders in the South Bronx on vocabulary learning, and varied how they studied in order to explore the generation effect. Students were given some of the words and definitions together. For example, To discuss something in order to come to an agreement: Negotiate. For others, they were shown the only definition and given a little time to think of the right word, even if they had no clue, before it was revealed. When they were tested later, students did way better on the definition-first words. The experiment was repeated on students at Columbia University, with more obscure words (Characterized by haughty scorn: Supercilious). The results were the same. Being forced to generate answers improves subsequent learning even if the generated answer is wrong. It can even help to be wildly wrong. Metcalfe and colleagues have repeatedly demonstrated a “hypercorrection effect.” The more confident a learner is of their wrong answer, the better the information sticks when they subsequently learn the right answer. Tolerating big mistake can create the biggest learning opportunities.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On expert predictions (beware)

The average expert was a horrific forecaster. Their areas of specialty, years of experience, academic degrees, and even (for some) access to classified information made no difference. They were bad at short-term forecasting, bad at long-term forecasting, and bad at forecasting in every domain. When experts declared that some future event was impossible or nearly impossible, it nonetheless occurred 15 percent of the time. When they declared a sure thing, it failed to transpire more than one-quarter of the time. The Danish proverb that warns “It is difficult to make predictions, especially about the future,” was right. Dilettantes who were pitted against the experts were no more clairvoyant, but at least they were less likely to call future events either impossible or sure things, leaving them with fewer laugh-out-loud errors to atone for — if, that was, the experts had believed in atonement.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On the difficulty of making predictions (even by experts)

In separate work, from 2000 to 2010 German psychologist Gerd Gigerenzer compiled annual dollar-euro exchange rate predictions made by twenty-two of the most prestigious international banks — Barclays, Citigroup, JPMorgan Chase, Bank of America Merrill Lynch, and others. Each year, every bank predicted the end-of-year exchange rate. Gigerenzer’s simple conclusion about those projections, from some of the worlds most prominent specialists: “Forecasts of dollar-euro exchange rates are worthless.” In six of the ten years, the true exchange rate fell outside the entire range of all twenty-two bank forecasts.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On dangerous unintended consequences that hamper vital (medical) innovation

A second, ironic, problem is that companies fear that if they produce a truly vital technology, governments will lean on them to relinquish their patent rights or slash prices. This was the fate of Bayer, the manufacturer of the anthrax treatment Cipro, when an unknown terrorist began mailing anthrax spores in late 2001, killing five people. Four years later, as anxiety grew about an epidemic of bird flu in humans, the owner of the patent on Tamiflu, Roche, agreed to license production of the drug after very similar pressure from governments across the world. It is quite obvious why governments have scant respect for patients in true emergencies. Still, if everybody knows that governments will ignore patents when innovations are most vital, it is not clear why anyone expects the patent system to encourage vital innovations.

Excerpt from: Adapt: Why Success Always Starts with Failure by Tim Harford

💎 On how much the analogies we use can shape our thinking (for first introductions)

An experiment on Stanford international relations students during the Cold War provided a cautionary tale about relying on kind-world reasoning — that is, drawing only from the first analogy that feels familiar. The students were told that a small, fictional democratic country was under threat from a totalitarian neighbor, and they had to decide how the United States should respond. Some students were given descriptions that likened the situation to World War II (refugees in boxcars; a president “from New York, the same state as FDR”; a meeting in “Winston Churchill Hall”). For others, it was likened to Vietnam, (a president “from Texas, the same as LBJ,” and refugees in boats). The international relations students who were reminded of World War II were far more likely to choose to go to war; the students reminded of Vietnam opted for nonmilitary diplomacy. That phenomenon has been documented all over the place. College football coaches rated the same player’s potential very differently depending on what former player was likened to an introductory description, even with all other information kept exactly the same.

Excerpt from: Range: How Generalists Triumph in a Specialized World by David Epstein

💎 On the power of observing nature (for engineering breakthroughs)

Engineer Marc Isambard Brunel, (father of the more famous Isambard Kingdom Brunel) discovered the perfect method for tunnelling through mud and clay to build the Thames Tunnel under London by observing the action of the shipworm, which tunnels through the hulls of boats, lining the hold with a hard chalky material as it goes. Mirroring the worm’s action, Brunel designed a revolutionary and ingenious tunnelling system, in which workers could simultaneous cut and line a tunnel with brickwork to seal it.

On its opening in 1843, the Thames Tunnel was described as the ‘Eight Wonder of the World’, and Brunel’s shipworm system is the basis of tunnelling methods still used today — a version of it was used in the construction of the 50- kilometre (31-mile) Channel Tunnel, built 40 metres (130 feet) below the seabed.

Excerpt from How to Have Great Ideas: A Guide to Creative Thinking and Problem Solving by John Ingledew

💎 On attributing success to being committed rather than involved (in professional tennis)

Martina Navratilova was described as “the greatest singles, doubles, and mixed doubles player who’s ever lived.”

That was some compliment, coming from former World Number One player Billie Jean King.

This is what Marina had to say about commitment:

“Other players are involved in tennis, but I’m committed. It’s like ham and eggs. The chicken is involved; the pig is committed.”

Excerpt from: The Smart Thinking Book: 60 Bursts of Business Brilliance by Kevin Duncan

💎 On the false belief that using complicated words conveys intelligence (and low credibility)

Daniel Kahneman sets them straight in Thinking, Fast and Slow: ‘If you care about being thought credible and intelligent, do not use complex language where simpler language will do. My Princeton colleague Danny Oppenheimer refuted a myth prevalent among undergraduates about the vocabulary that professors find most impressive. In an article titled “Consequences of Erudite Vernacular Utilized Irrespective of Necessity: Problems with Using Long Words Needlessly”, he showed the couching familiar ideas in pretentious language is taken as a sign of poor intelligence and low credibility.

Excerpt from: How To Write Better Copy (How To: Academy) by Steve Harrison

💎 On the advantages of making small changes, rather than big ones (cheaper, faster, reversible)

Big doesn’t necessarily mean good. It could even be bad.

By contrast, there are tremendous advantages to making small changes.

Behavioural science has shown that tiny variations in phraseology can cause huge change.

Small changes are usually less costly, and often free.

Small changes attract less attention from bosses and meddlers, so they are easier to implement.

Small changes are easier to rectify if they don’t achieve their original objective.

So bear in mind that the ‘next big thing’ could be small.

Excerpt from: The Smart Thinking Book: 60 Bursts of Business Brilliance by Kevin Duncan

💎 On idea generation (5 simple steps)

A guy named James Webb Young, a copywriter from the 1940s, laid out a five-step process of idea generation that holds water today.

1. You gather as much information on the problem as you can. You read, you underline stuff, you ask questions, you visit the factory.

2. You sit down and actively attack the problem.

3. You drop the whole thing and go do something else while your subconscious mind works on the problem.

4 . “Eureka!”

5. You figure out how to implement your idea.

Excerpt from: Hey, Whipple, Squeeze This: The Classic Guide to Creating Great Ads by Luke Sullivan and Sam Bennett

💎 On how easy it is to forget we see the world from one particular perspective (when driving)

Naive realism suggests an answer: they do. It calls to mind a famous line of George Carlin’s: “Have you ever noticed that everyone driving slower than you is an idiot, and anyone going faster is a maniac?”

Excerpt from: Mindwise: How We Understand What Others Think, Believe, Feel, and Want by Nicholas Epley