💎 On the importance of exposing our ideas to people who disagree with them (knowing the whole subject)

John Stuart Mill is one of the heroes of thinking in bets. More than one hundred and fifty years after writing On Liberty, his thinking on social and political philosophy remains startlingly current. One of the frequent themes in On Liberty is the importance of diversity of opinion. Diversity and dissent are not only checks on fallibility, but the only means of testing the ultimate truth of an opinion: “The only way in which a human being can make some approach to knowing the whole of a subject is by hearing what can be said about it by persons of every variety of opinion, and studying all modes in which it can be looked at by every character of mind. No wise man ever acquired his wisdom in any mode but this; nor is it in the nature of human intellect to become wise in any other manner.”

Excerpt from: Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke

💎 On the importance of social context when interpreting messages (the art of gift giving)

Robert Zion, the social psychologist, once described cognitive psychology as ‘social psychology with all the interesting variables set to zero’. The point he was making is that humans are a deeply social species (which may mean that research into human behaviour or choices in artificial experiments where there is no social contest isn’t really all that useful). In the real work, social context is absolutely critical. For instance, as the anthropologist Pierre Bourdieu observes, gift giving is viewed as a good thing in most human societies, but it only takes a very small change in context to make a gift an insult rather than a blessing; returning a present to the person who has given it to you, for example, is one of the rudest things you can do. Similarly, offering people money when they do something you like makes perfect sense according to economic theory and is called an incentive, but this does not mean you should try and pay your spouse for sex.

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

💎 On how big numbers fail to move us (for charity fundraising)

In a 1992 survey by W. H. Desvousges and colleagues, people were told that birds were dying because they became mired in uncovered pools of oil at refineries. This (fictitious) problem could be solved by putting nets over the pools. The experiment asked participants to indicate how much they would be willing to pay for nets to save the birds The researchers tried telling different groups that 2,000 birds were being killed a year — or 20,000 birds, or 200,000 birds. The answers didn’t depend on the number of birds! In all cases, the average dollar amount was $80. Evidently, all that registered was A lot of birds are being killed. We should do something about it.

Excerpt from: Priceless: The Myth of Fair Value (and How to Take Advantage of It) by William Poundstone

💎 On the idea of alchemy (in psychology, 2 + 2 can equal more or less than 4)

The advertising agency J. Walter Thompson used to set a test for aspiring copywriters. One of the questions was simple: ‘Here are two identical 25-cent coins. Sell me the one on the right.’ One successful candidate understood the idea of alchemy. ‘I’ll take the right-hand coin and dip it in Marilyn Monroe’s bag. Then I’ll sell you a genuine 25-cent coin as owned by Marilyn Monroe.’

In maths it is a rule that 2 + 2 = 4. In psychology, 2 + 2 can equal more or less than 4. It’s up to you.

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

💎 On the power of constraints to drive creativity (writing Green Eggs and Ham)

In 1960, Dr. Suess made a bet with Bennett Cerf, the cofounder of Random House, that he could write a book relying on only fifty different words. Though challenging, the bet resulted in Green Eggs and Ham, a classic that’s beloved in my house (and maybe yours) and Dr. Seuss’s bestselling book.

Constraints, then, can open our minds and drive creativity rather than hinder it. Poetic masterworks spring from the boundaries of verse and rhyme. Masterpieces of Renaissance art started as commissions in which the painter was bound to adhere to narrow specifications and subject matter, materials, color, and size. In our own work, constraints take many different dorms, from tight budgets to standardization. If you ask a team to design and build a product, you might get a handful of good ideas. But if you ask that same team to design and build the same product within a tight budget, you’ll likely see even more creative results. Research examining how people design new products, cook meals, and even fix broken toys finds that budget constraints increase resourcefulness and lead to better solutions.

Excerpt from: Rebel Talent: Why It Pays to Break the Rules at Work and in Life by Francesca Gino

💎 On costly signals being more powerful (Peacocks, Antelopes, and evolution)

This type of public grandstanding is common in the animal world, too. Israeli ethologist Amotz Zahavi noted that animals often engage in showy and even dangerous displays of courage to attract mates and raise their stats. Male peacocks show off their gorgeous plumage in part to demonstrate to females that they can support the heavy weight, an evolutionary disadvantage. (Large tail feathers translate into slower running and a reduced ability to hide from predators.) Antelopes often engage in stotting: They leap acrobatically straight into the air when hungry cheetahs are pursuing them, even though sprinting straight for the horizon is a better move. The animals’ dangerous waste of energy conveys strength, telling the cheetah, “Don’t even bother trying.” Similarly, guppies swim right under their predators’ noses before darting away. In evolution, it seems, survival of the fittest only captures part of the story.

Excerpt from: Rebel Talent: Why It Pays to Break the Rules at Work and in Life by Francesca Gino

 

💎 On basing decisions on myths and anecdotes (bloodletting a prime example)

The study of marketing is so young that we would be arrogant to believe that we know it all, or even that we have got the basics right yet. We can draw an analogy with medical practice. For centuries this noble profession has attracted some of the best and brightest people in society, who were typically far better educated than other professionals. Yet for 2,500 years these experts enthusiastically and universally taught and practised bloodletting (a generally useless and often fatal ‘cure’). Only very recently, about 80 years ago, medical professional started doing the very opposite, and today blood transfusions save numerous lives every day. Marketing manager operate a bit like medieval doctors — working on anecdotal experience, impressions and myth-based explanations.

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

💎 On the danger of priming in surveys (beware inflated responses)

The responses to questions can also be influenced by what has been asked beforehand, a process known as priming. Official surveys of wellbeing estimate that around 10% of young people in the UK consider themselves lonely, but an online questionnaire by the BBC found the far higher proportion of 42% among those choosing to answer. This figure may have been inflated by two factors: the self-reported nature of the voluntary ‘survey’, and the fact that the question about loneliness had been preceded by a long series of enquires as to whether the respondent in general felt a lack of companionship, isolated, left out, and so on, all of which might have primed them to give a positive response to the crucial question of feeling lonely.

Excerpt from: The Art of Statistics: Learning from Data by David Spiegelhalter

💎 We seek out information that fits with what we want to hear (health problems)

Here’s a more scientific example of how this tendency works. Two psychologists, Peter Ditto (of the University of California, Irvine) and David Lopez (founder and CEO of iAnalytics Statistical Consulting), told participants that they would take a test to determine whether they had a dangerous enzyme deficiency. For the test, participants had to put a drop of saliva on a strip and then wait for the results. Some learned that the strip would turn green if they had the deficiency; others learned that green meant they did not have the deficiency. The strip wasn’t a real test — it was simply a piece of paper that ever changed its color. The result? Participants who hoped to see the test strip turn green as evidence that they didn’t have the deficiency waited much longer than those who hoped not to see it turn green. That is, people waited more patiently for data when they believed the data would reassure them than when the believed it would scare them.

Excerpt from: Rebel Talent: Why It Pays to Break the Rules at Work and in Life by Francesca Gino

💎 On talking to the audience in their language (not yours)

Horse Power was comparison everyone could understand.

Suddenly, Watt had put the steam engine into a language that made sense to the layman. Which is exactly what Steve Jobs did when he launched the iPod.

He didn’t compare it to to other MP3 players for speed and fidelity.

That would have been a market-share comparison.

Steve Jobs had a much bigger opportunity in mind, market-growth.

That’s why he compared the iPod to something ordinary people could understand.

He simply held it up and said “A thousand songs in your pocket.”

Because 200 years later the rules for creative communication haven’t changed. You talk to the audience in their language. Not yours.

Excerpt from: Creative Blindness (And How To Cure It): Real-life stories of remarkable creative vision by Dave Trott

💎 On the power of unexpected rewards (freelancer productivity)

As another example, an HBS study of the freelancer contracting site oDesk (now renamed Upwork) found that surprise incentives resulted in greater employee effort than higher pay. Harvard Business School researchers posted a data-entry job on oDesk that would take four hours. One of the postings offered $3 per hour fo the job; the other offered $4 per hour. People with past data-entry experience were hired at either the $3 or $4 rate. But some of those who were initially told they’d be paid $3 were later told that the hiring company had a bigger budget than what they expected: “Therefore, we will pay you $4 per hours instead of $3 per hour.” The group initially hired at $4 an hour worked no harder than this hired at $3. But those who received the surprise raise worked substantially harder than the other two groups, and among those with experience, their effort more than made up for the cost of the extra pay.

Excerpt from: Rebel Talent: Why It Pays to Break the Rules at Work and in Life by Francesca Gino

💎 On leading from the front (an example of Napoleon’s leadership)

One battery in particular was critical to the bombardment due to its elevated terrain. But it was also the most vulnerable to counterattack, thus making it the most dangerous to operate. Bonaparte’s superiors informed him that no soldier would volunteer to man the battery. Walking through camp in contemplation he spotted a printing machine which gave him an idea. He created a sign to hang near the battery: “The battery of the men without fear.” When the other soldiers saw it the next morning they clamoured to earn the honor of operating that cannon. Bonaparte himself wielded a ramrod alongside his gunners. The cannon was manned day and night. The French won the battle; Bonaparte won the acclaim.

Excerpt from: Rebel Talent: Why It Pays to Break the Rules at Work and in Life by Francesca Gino

💎 Those who break norms are more likely to be seen as having a higher status (teachers)

A survey of US college students asked them to reach to a description of a professor teaching at a top tier school. For some students we described the 45 year-old professor as wearing a t-shirt and having a beard. For others, we described him as clean-shaven and wearing a tie. The students rated the professor in a t-shirt as having higher status. The perception that an individual is consciously choosing not to conform is critical.

To signal status, deviations from the norm must demonstrate one’s autonomy to behave consistently with one’s own inclinations and to pay for the cost of nonconformity.

Excerpt from: Rebel Talent: Why It Pays to Break the Rules at Work and in Life by Francesca Gino

💎 Before believing a study take a look at its methodology (Ryanair satisfaction)

For example, in 2017 budget airline Ryanair announced that 92% of their passengers were satisfied with their flight experience. It turned out that their satisfaction survey only permitted the answers, ‘Excellent, very good, good, fair, OK’.

Excerpt from: The Art of Statistics: Learning from Data by David Spiegelhalter

💎 In our keenness to attribute success or failure to an intervention, we often forget that the change may well be a case of reversion to the mean (league tables)

It is not only sports teams that are ranked in league tables. Take the example of the PISA Global Education Tables, which compare different countries’ school systems in mathematics. A change in league table position between 2003 and 2013 was strongly negatively correlated with initial position, meaning that countries at the top tended to go down, and those at the bottom tended to go up. The correlation was -0.60, and some theory shows that if the rankings were complete chance and all that was operating were regression-to-the-mean, the correlation would be expected to be -0.71, not very different from what was observed. This suggest the differences between countries were far less than claimed, and that change in league position had little do with changes in teaching philosophy.

Excerpt from: The Art of Statistics: Learning from Data by David Spiegelhalter

💎 The power of name (brand) recognition

I give a final striking example, this time to do with publishers. In 1969, Jerzy Kosinsky’s novel Steps won the American National Book Award for fiction. Eight years later some joker had it retyped and sent the manuscript with no title under a false name to fourteen major publishers and thirteen literary agents in the US including Random House, the firm who originally published it. Of the 27 people to whom it was submitted no one recognised it had been published and all 27 rejected it.

Except from: Irrationality by Stuart Sutherland

💎 We tend to underestimate how much we’re influenced by others (partly explains the popularity of the iPod)

They asked 40 owners of iPods how influenced they were by the trendiness of the product relative to their peers. The scale went from one (much less than average) to nine (much more than average), with five as average. So the neutral answer was clearly five. However, the average response from participants was 3.3.

Excerpt from: The Little Book of Behavioral Investing: How not to be your own worst enemy by James Montier

💎 On how admitting a weakness on a minor issue makes a brand’s other claims more believable (Listerine, L’Oreal, and Avis)

When asking ourselves about such a person’s trustworthiness, we should keep in mind a little tactic compliance practitioners often use to assure us of their sincerity: They will seem to argue to a degree against their own interest. Correctly done, this can be a subtly effective device for proving their honesty. Perhaps they will mention a small shortcoming in their position or product (“Oh, the disadvantages of Benson & Hedges”). Invariably, though, the drawback will be a secondary one that is easily overcome by a more significant advantages — “Listerine, the taste you hate three times a day”; “Avis: We’re number two, but we try harder”; “L’Oreal, a bit more expensive but worth it.” By establishing their basic truthfulness on minor issues, the compliance professionals who se this ploy can then be more believable when stressing the important aspects of their argument.

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

💎 If a brand can change its comparison set it can change a shopper’s willingness to pay by orders of magnitude (a lesson in selling coffee)

Consider Nespresso. They sell in distinctive pods, which provide the right amount of coffee for a cup. Because they’re sold in that unit we compare their price to other places selling by the cup, such as Costa or Caffe Nero. When compared to the £2.50 Costa charge, Nespresso pods, costing 30p-37p, feel like a bargain.

But stop for a second and remember back to when they launched. If Nespresso had sold their coffee in standard packaging the natural comparison set would have other brands of roast and ground coffee, like Taylor’s or illy. Their price would have been judged against the norm for other coffees — roughly £4.00 for 227g. Even with tens of millions of pounds of advertising they could never have persuaded consumers to pay £34 for a 454g bag. But that £34 figure equates to 7p per gram, exactly what they’re charging now.

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

💎 On experts’ inability to say they don’t know (fear of looking stupid)

In 2010, a group of mathematicians, historians and athletes were tasked with identifying certain names that represented significant figures within each discipline. They had to discern whether Johannes de Groot or Benoit Theron were famous mathematicians, for instance, and they could answer, Yes, No, or Don’t Know. As you might hope, the experts were better at picking out the right people (such as Johannes de Groot, who really was a mathematician) if they fell within their discipline. But they were also more likely to say they recognised the made-up figures (in this case, Benoit Theron). When their self-perception of expertise was under question, they would rather take a guess and ‘over-claim’ the extent of their knowledge than admit their ignorance with a ‘don’t know’.

Excerpt from: The Intelligence Trap: Why Smart People Do Stupid Things and how to Make Wiser Decisions by David Robson

💎 On confusing chauffeur knowledge with real knowledge (the danger of surface knowledge)

After receiving the Nobel Prize for Physics in 1918, Max Planck went on tour across Germany. Wherever he was invited, he delivered the same lecture on new quantum mechanics. Over time, his chauffeur grew to know it by heart: ‘It has to be boring giving the same speech each time, Professor Planck. How about I do it for you in Munich? You can sit in the front row and wear my chauffeur’s cap. That’d give us both a bit of variety.’ Planck liked the idea, so that evening the driver held a long lecture on quantum mechanics in front of a distinguished audience. Later, a physics professor stood up with a question. The driver recoiled: ‘Never would I have thought that someone from such an advanced city as Munich would ask such a simple question! My chauffeur will answer it.’

Excerpt from: The Art of Thinking Clearly by Rolf Dobelli

💎 On the dangers of intelligence (as identified by Houdini)

Houdini himself seems to have intuitively understood the vulnerability of the intelligent mind. ‘As a rule, I have found that the greater brain a man has, and the better he is educated, the easier it has been to mystify him,’ he once told Conan Doyle.

Excerpt from: The Intelligence Trap: Why Smart People Do Stupid Things and how to Make Wiser Decisions by David Robson

💎 On our tendency to be unrealistically optimistic (see divorce rates)

People are unrealistically optimistic even when the stakes are high. About 50 percent of marriages end in divorce, and this is a statistic most people have heard. But around the time of the ceremony, almost all couples believe that there is approximately a zero percent chance that their marriage will end in divorce — even those who have already been divorced! (Second marriage, Samuel Johnson once quipped, ‘is the triumph of hope over experience.’) A similar point applies to entrepreneurs starting new businesses, where the failure rate is at least 50 percent. In one survey of people staring new businesses (typically small businesses, such a contracting firms, restaurants, and salons), respondents were asked two questions: (a) What do you think is the chance of success for a typical business like yours? (b) What is your chance of success? The most common answers to these questions were 50 percent and 90 percent, respectively, and many said 100 percent to to the second question.

Unrealistic optimism can explain a lot of individual risk taking, especially in the domain of risks to life and health.

Excerpt from: Nudge: Improving Decisions About Health, Wealth and Happiness by Richard Thaler and Cass Sunstein

💎 On remembering our choices as better than they actually were (overlooking faults)

Bush’s 8-year term saw the horrific events of September 11th and the controversial wars in Afghanistan and Iraq that followed. Many Bush supporters still focus on the positives of his presidency as a justification for his actions, whilst opposing Democrats will argue their candidate, Gore, would have handled the situation better.

We can often ignore opposing evidence in favour of what we believe is correct (see: confirmation bias). Once we’ve made a decision based on the evidence considered, we don’t like looking like we made the wrong one. To help ensure this, we often over-attribute positive features to the options we’ve chosen and negative features to options not chosen, like political candidates. As a result, we feel good about ourselves and our choices, and have less regret for bad decisions. This makes changing incorrect beliefs an incredibly hard task.

Consumers desire for past choices to be rational and well-made (or at least seem to be) makes them more likely to overlook any faults in an effort to convince themselves and others that they made the right decision.

Excerpt from: Product Gems 1: 101 Science Experiments That Demonstrate How to Build Products People Love by David Greenwood

💎 On the paradox of choice (Monstromart: where shopping is a baffling ordeal)

“Monstromart: where shopping is a baffling ordeal” reads the slogan of a fictional supermarket in The Simpsons.

Inside the supermarket, there were whole aisles for one type of product. There were different brands of tomato ketchup as far as the eye could see, bags sugar could be bought in hundreds of varieties, the express checkout had a sign reading: “1,000 items or less”.

In the end, the Simpsons returned to Apu’s Kwik-E-Mart. In doing so, the Simpsons were making a choice to reduce their choice. It wasn’t quite a rational choice, but it made sense. Their unconstrained freedom left them paralysed to make decisions.

There is no denying choice improves the quality of our lives. When people have no choice, life is almost unbearable. Choice is essentially freedom, which is fundamental to our well-being. However, like The Simpsons, the choice paradox suggests that offering consumers too much choice can leave them paralysed to make a decision.

Excerpt from: Product Gems 1: 101 Science Experiments That Demonstrate How to Build Products People Love by David Greenwood

💎 On the influence of options presented in a relatively large group (our probability judgments are often inaccurate)

I recently watched a competitive swimming heat on television. The race sticks in my mind because 50% of the athletes, four in total, were from the United States. Knowing very little about each participant, nor who the favourite was for the race, at first glance, it looked like the United States had to place in the top three. The result: none of them finished in the top three.

In this case, the size of each category, the country each athlete represented, incorrectly led me to believe they had a better chance of making it into the top three. I incorrectly believed “they had the numbers on their side”.

The category size bias demonstrates how our probability judgments are often inaccurate. Category size can impact the perceived likelihood of a specific outcome, such that an outcome classified into a large (vs small) category is perceived as more likely to occur.

Excerpt from: Product Gems 1: 101 Science Experiments That Demonstrate How to Build Products People Love by David Greenwood

💎 On the need for brands to be distinctive not different (“Just do it”, “Every little helps”,…)

Domestos kills all known germs. Dead’ was an example. But in a world where functional advantages are quickly matched by the competition, brands rarely own these claims for long. In fact, any bleach could make the same claim of Domestos.

And this takes us to the nub of how branding works. Brands succeed not by being different, but by being distinctive. Brands need a distinctive style, tone of voice, and personality. They need to have their own way of saying what they do. An end-line’s job is to sum that up in a memorable way.

Think about two great brand end-lines: Nike’s “Just do it” and Tesco’s “Every little helps”. There’s nothing inherently ownable about these words. Or the sentiments behind them. You couldn’t come up with a more ordinary bunch of words if you tried. But each of these lines reflects an attitude to the category in question that’s clear, distinctive and memorable. And over time, they’ve become inextricable linked to the brands in question.

And that’s the point. “Ownership” takes time and money. The smart marketing directors who bought those successful long-running campaign ideas and end-lines weren’t agonising over wether they were ownable.

Excerpt from: How not to Plan: 66 ways to screw it up by Les Binet and Sarah Carter

💎 On making unfamiliar tech developments feel familiar through “skeuomorphism” (the iPhone calendar)

The California Roll principle is based on the underlying rule of combining something new with something familiar to make it ‘strangely familiar’. It’s a phenomenon that psychologists like Robert B. Zejonc have labelled the ‘mere-exposure effect’ or the ‘Law of Familiarity’. Humans, understandably, have a tendency to be more comfortable around people and things they are familiar with. There is more than one way to build on this.

Apple does it though a design feature Steve Jobs called ‘skeuomorphism’. It’s a catch-all term for when design cues are taken from common objects or elements in the physical world. The iPhone calendar resembles a physical calendar. The notes app looks like a yellow legal pad. The rubbish bin on the first Mac was exactly like a metal bin. The podcast app when first launched looked like an ancient reel-to-teel tape and iBook looked like a real bookshelf with wood veneers. The familiar elements are not necessary but tap into our memory banks.

Excerpt from: Who Can You Trust?: How Technology Brought Us Together – and Why It Could Drive Us Apart by Rachel Botsman

💎 On the remarkable persistence of ideas that are no longer appropriate (fire engines and police cars)

If you thought that ambulances, fire engines and police cars have blue lights in order to be seen better — then you thought wrong. Emergency vehicles have blue lights in order not to be seen…. During the Second World War, the Gestapo began to use blue lights on their cars so as not to disturb the blackout of German cities, which was in force to protect them from the bombers of the Allied Forces. Blue lights are difficult to detect when it is dark. After the war, other police forces continued to use blue lights, although it was totally illogical to do so.

This story about the colour of police lights just goes to show how difficult it can be to introduce a better idea, even though the present one is not effective. The same thing is true of red fire engines. Perhaps you have noticed that ambulances and fire engines in many cites are, in fact, bright yellow? A much more suitable colour for emergency vehicles as bright yellow can be seen more easily in traffic both day and night. Although most of those involved in the fire fighting forces knew that red was not the most suitable colour for the job, it took decades before they dared replace their red vehicles. This might be comforting when you have an excellent idea that no one has any time for!

Excerpt from: The Idea Book by Fredrik Härén

💎 On the power of varying sentence length (write like an orchestra)

This sentence has five words. Here are five more words. Five-word sentences are fine. But several together are monotonous. Listen to what is happening. The writing is getting boring. The sound of it drones. It’s like a stuck record. The ear demands some variety. Now listen. I vary the sentence length, and I create music. Music. The writing sings. It has a pleasant rhythm, a lilt, a harmony. I use short sentences. And I use sentences of medium length, And sometimes, when I am certain the reader is rested, I will engage him with a sentence of considerable length, a sentence that burns with energy and builds with all the impetus of a crescendo, the roll of the drums, the crash of the cymbals — sounds that say listen to this, it is important.

Excerpt from: On Writing Well by William Zinsser