💎 The labour illusion (or why incompetence sometimes pays)

But would he have preferred that the locksmith bumble around, take a long time and fake effort? Well, maybe. A locksmith once told Dan that when he started his career, he took forever to open a lock, and in the process, he often broke it, taking even more time and money to get one properly installed and finish the job. He charged for the parts to replace the broken lock as well as his standard fee for opening a locked door. People were happy to pay all this, and they tipped him well. He noticed, however, that as he became proficient and opened a lock quickly, without breaking the old lock (and without the consequent need to replace it and charge his clients for the extra parts), customers not only didn’t tip, but they also argued about his fee.

Wait, what? How much is it worth to have our door open? That should be the question. But because it’s difficult to put a price on this, we look at how much effort it takes to have that door unlocked. When there’s a great deal of effort, we feel much better about paying more. But all that should matter is the value of that open door.

Excerpt from: Small Change: Money Mishaps and How to Avoid Them by Dan Ariely and Jeff Kreisler

💎 Repetition increases our tendency to act (but it weakens our sensation of the act)

The little-known nineteenth-century French philosopher Félix Ravaisson was able to put this concept into concrete terms. He called it the double law of habit. Basically it means this: repetition strengthens our tendency to act, but it also weakens our sensation of that act. In other words, we habituate. It’s a deceptively complex process, and one that has power to sap force and meaning from our lives. We tend to keep doing things long after they have lost meaning for us. Yes, we can take advantage of that dynamic when we form new habits, as they lose their hard edges with repetition. But it’s a double-edged sword.

Habituation is one reason we lose interest in the material stuff we buy (thinking those things will finally make us happy). Certainly, you enjoyed sitting on your new couch the day it was delivered. And you got to show it off to your friends the next time they visited. But after that? You probably don’t notice it much now.

Excerpt from: Good Habits, Bad Habits: The Science of Making Positive Changes That Stick by Wendy Wood

💎 We’re more likely to remember someone is a baker, than if their surname is Baker (the Baker-baker paradox)

This is known as the Baker-baker paradox. If we are introduced to someone named Mr Baker, we are less likely to remember the name than we are to remember the profession if we are introduced to a baker. If someone is a baker, we can create an image of that person pouring flour, kneading the bread, wearing a tall white hat.

We have already formed a lot of associations with ‘a baker’ – perhaps even multisensory experiences. We have smelled a bakery and eaten freshly baked bread. We can visualize what the baker does. The name Baker is just a bunch of letters. Names are essentially random syllables, a meaningless soup of sounds.

Perhaps, therefore, it is also easier to remember that Mikkel is a doctor and that Nikolaj owns a fruit plantation than the fact that Ib works in IT and Ida in public relations. It is easier to imagine Mikkel performing an operation or to visualize Nikolaj’s apples trees than to form an image of what it looks like when Ida ‘does public relations’.

Cicero, the Roman statesman, philosopher and orator, once wrote, ‘The keenest of all our senses is the sense of sight, and consequently perceptions received by the ears or from other sources can most easily be remembered if they are conveyed to our minds by the mediation of vision.’

Excerpts from: The Art of Making Memories: How to Create and Remember Happy Moments by Meik Wiking

💎 The anchoring effect is influential (even when the anchors are ridiculous)

They asked people two versions of the Gandhi questions. One version is what I’ve repeated here. The other began by asking people whether Gandhi was older or younger than 140 when he died, which was followed by the same direction to guess Gandhi’s age when he died. Strack and Mussweiler found that when the first question mentioned the number nine, the average guess on the following question was 50. In the second version, the average guess was 67. So those who heard the lower number before guessing guessed lower. Those who heard the higher number, guessed higher.

Excerpt from: Risk: The Science and Politics of Fear by Dan Gardner

💎 On the puzzling fact that only so few ad agency staff are over 50 (unlike other creative industries)

We’ll start with the Nobel Prize. There is only one Nobel Prize in a creative field. It is the prize for Literature. It went to Kazuo Ishiguro who is 64.

The Pulitzer Prize is awarded in several creative fields. The Pulitzer for Drama went to Lynn Nottage who is 54. The Pulitzer for History went to Heather Ann Thompson, age 55. The Pulitzer for Poetry went to Tyehimba Jess, age 53.

Next we move to television. The Emmy for Best Drama Series went to The Handmaid’s Tale. The novel was written by Margaret Atwood who was 79 and was creative consultant on the show. The Best Comedy Series went to Veep, executive produced by Julia Louis-Dreyfus, 57. She also won for Best Actress. Best Limited Series went to Big Little Lies created by David E Kelley, 62. The Best Supporting Actress was Ann Dowd, 62. Best Supporting Actor was John Lithgow, 73. Best Supporting Actor in a Comedy Series went to Alec Baldwin, 60.

So, let’s recap. People over 50 are creative enough to dominate in Nobels, Pulitzers, Oscars, and Emmys but are not creative enough to write a fucking banner ad. I guarantee you, not one of these brilliantly talented people could get a job in an ad agency today. Not one.

Excerpt from: Advertising for Skeptics by Bob Hoffman

💎 The 18th century advertising gimmicks behind the promotion of the potato (it’s all about appearances)

The demographic threat they thus posed. Here at last, late in the story, we get a glimpse of an individual as potato innovator, at least according to legend. Antoine-Augustin Parmentier was an apothecary working with the French army who rather carelessly managed to get himself captured no fewer than five times by the Prussians during the Seven Years War. They fed him on nothing but potatoes, and he was surprised to see himself growing plump and healthy on the diet. On his return to France in 1763 he devoted himself to proselytizing the benefits of the potato as the solution to France’s repeated famines. With grain prices high after poor harvests, he was pushing at an open door.

Parmentier was a bit of a showman and he devised a series of publicity stunts to get his message across. Hegot the attention of the queen, Marie Antoinette, and persuaded her to wear potato flowers in her hair, supposedly after a contrived encounter in the gardens of Versailles. He planted a field of potatoes on the outskirts of Paris and posted guards to protect it, knowing that the presence of the guards would itself advertise the value of the crop, and attract hungry thieves at night, when the guards were mysteriously absent. He gave dinners of potato cuisine to people of influence, including Benjamin Franklin. But he was also scientific in his approach. His ‘Examen chimique des pommes de terre’, published in 1773 (a year after the parliament had repealed the ban on potatoes), praised the nutrient contents of potatoes.

Excerpt from: How Innovation Works by Matt Ridley

💎 On the need for businesses to be resilient (so they’re not blown away)

“Wind extinguishes a candle and energizes fire. You want to be the fire and wish for the wind”

Nassim Taleb

Excerpt from: The Science of Organizational Change: How Leaders Set Strategy, Change Behavior, and Create an Agile Culture (Leading Change in the Digital Age) by Paul Gibbons

💎 Why it becomes harder to predict technological change (as technology develops)

Perhaps we should have seen this acceleration coming. In the 1930s an American aeronautical engineer named T. P Wright carefully observed aeroplane factories at work. He published research demonstrating that the more often a particular type of aeroplane was assembled, the quicker and cheaper the next unit became. Workers would gain experience, specialised tools would be developed, and ways to save time and material would be discovered. Wright reckoned that every time accumulated production doubled, unit costs would fall by 15 per cent. He called this phenomenon ‘the learning curve’.

Three decades later, management consultants at Boston Consulting Group, or BCG, rediscovered Wright’s rule of thumb in the case of semiconductors, and then other products too. Recently, a group of economists and mathematicians at Oxford University found convincing evidence of learning curve effects across more than 50 different products from transistors to beer – including photovoltaic cells. Sometimes the learning curve is shallow and sometimes steep, but it always seems to be there.

The learning curve may be a dependable fact about technology, but paradoxically, it creates a feedback loop that makes it harder to predict technological change. Popular products become cheap; cheaper products become popular.

Excerpt from: The Next Fifty Things that Made the Modern Economy by Tim Harford

💎 Multiple rewards may be averaging, rather than additive (one great reward is perceived as better than a great reward and a mediocre one)

On Hallowe’en, twenty-eight trick-or-treaters with the average age of around ten came to the house. All the kids were given different combinations of candy and asked to rate their happiness levels in relation to it. Seven different happiness levels were shown by using smiley face symbols ranging from neutral to open-mouthed-grin smiley face’. Some kids were given a full-size Hershey’s chocolate bar, some kids were given a piece of gum, some kids were given first a Hershey’s bar then a piece of gum, and some kids were given first a Hershey’s bar then another Hershey’s bar. You would expect more candy to equal more happiness. But the children getting a chocolate bar then a piece of gum were less happy than the kids who received just the chocolate bar. And two chocolate bars did not bring more happiness than one chocolate bar.

Excerpt from: The Art of Making Memories: How to Create and Remember Happy Moments by Meik Wiking

💎 9 suggested research techniques for planners

Start Doing Research Differently

1. Don’t only talk to the consumer. Talk to someone who spends their life understanding the target. Wife, kids, boss, subordinate, neighbor, garbage man, probation officer
2. Send them a disposable camera and a one time brief
3. Get them to write something and word cloud it
4. Set up a video confessional booth
5. People love playing marketer. Give them your job
6. Think of the rote thing to do. Do the opposite
7. Get 10 smart people to write 10 Onion headlines for your brand or category
8. Go to their house as a forensic criminologist
9. Pitch ideas like this at your account people until you give them one that makes them think you’re insane. Then do that one

Excerpt from: Strategy Scrapbook by Alex Morris

💎 Six step approach to storytelling (the Pixar Pitch)

The animation company Pixar, creators of Finding Nemo and Toy Story, has a proven formula for successful storytelling.

What has become known as the Pixar Pitch involves six sequential sentences:

Once upon a time, A.

Every day, B.

One day, C.

Because of that, D.

Because of that, E.

Until finally, F.

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

💎 When weighing up the merits of a product or dangers of a technology we often rely on how it makes us feel (rather than laboriously compute the facts)

In a second experiment, Slovic and Alhakami had students of the University of Oregon rate the risks and benefits of a technology (different trials used nuclear power, natural gas, and food preservatives). Then they were asked to read a few paragraphs describing some of the benefits of the technology. Finally, they were asked again to rate the risks and benefits of the technology. Not surprisingly, the positive information they read raised – student’s ratings of the technology’s benefits in about one-half of the cases. But most of those who raised their estimate of the technology’s benefits also lowered their estimate of the risk – even though they had not read a word about the risk. Later trials in which only risks were discussed had the same effect but in reverse: People who raised their estimate of the technology’s risks in response to the information about risk also lowered their estimate of its benefit.

Excerpt from: Risk: The Science and Politics of Fear by Dan Gardner

💎 One problem with the client-agency model is that it encourages complex clever answers (rather than simple, effective ones)

As we saw, a bureaucratized system will increase in complication from the interventionism of people who sell complicated solutions because that’s what their position and training invite them to do.

Things designed by people without skin in the game tend to grow in complication (before their final collapse).

There is absolutely no benefit for someone in such a position to propose something simple: when you are rewarded for perception, not results, you need to show sophistication. Anyone who has submitted a Scholarly paper to a journal knows that you usually raise the odds of acceptance by making it more complicated than necessary.

Excerpt from: Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Nicholas Taleb

💎 How reform of organisations often requires an outside perspective (unfamiliarity with the department)

‘It should be remembered, that in few departments have important reforms been effected by those trained up in practical familiarity with their details. The men to detect blemishes and defects are among those who have not, by long familiarity, been made insensible to them.’

Excerpt from: The Next Fifty Things that Made the Modern Economy by Tim Harford

💎 With uncertainty we prefer conformity (group think)

Crutchfield’s experiment involved slightly more ambiguous questions, including one in which people were asked if they agreed with the statement ‘I believe we are made better by the trials and hardships of life.’ Among subjects in a control group that was not exposed to the answers of others, everyone agreed. But among those in the experiment who thought that everyone else disagreed with the statement, 31 per cent said they did not agree. Asked whether they agreed with the statement ‘I doubt whether I would make a good leader,’ every person in the control group rejected it. But when the group was seen to agree with the statement, 37 per cent of people went along with the consensus and agreed that they doubted themselves.

Excerpt from: Risk: The Science and Politics of Fear by Dan Gardner

💎 How our perception of risk is skewed by “what makes a good story or hypothesis”(rather than a cold calculation of the odds)

Many other studies produced similar results. Kahneman and Tversky divided 245 undergrads at the University of British Columbia in half and asked one group to estimate the probability of a massive flood somewhere in North America in 1983, in which more than 1,000 people drown.’ The second group was asked about an earthquake in California sometime in 1983, causing a flood in which more than 1,000 people drown.’ Once again, the second scenario logically has to be less likely than the first but people rated it one-third more likely than the first. Nothing says ‘California’ quite like ‘earthquake’.

Excerpt from: Risk: The Science and Politics of Fear by Dan Gardner

💎 Reducing the over prescription of antibiotics (using social proof)

In 2014, the British government undertook a national experiment with the report card approach-sending letters to thousands of doctors in England who were prescribing the most antibiotics per capita in their regions. The letters, from high-profile British leaders, let those doctors know that they were prescribing more antibiotics than 80 percent of their local peers and suggested alternatives to writing a prescription in the heat of the moment, such as giving patients advice to care for themselves while sick. Researchers from the UK government’s Behavioural Insights Team found that these letters corresponded with a substantial decline in the rate of antibiotic prescription, with an estimated seventy thousand fewer antibiotics given to patients in a six-month period. The letters had cost very little, but they had saved significant sums of money spent on medicine by the national health care system and protected public health.

Excerpt from: The Optimist’s Telescope: Thinking Ahead in a Reckless Age by Bina Venkataraman

💎 Origin of Lacoste (le crocodile)

René Lacoste, French tennis star, earned the nickname ‘le crocodile’ for winning a crocodile-skin suitcase in a bet. ‘A friend drew a crocodile’, he said, ‘and / had it embroidered on the blazer / wore on the courts!’ His polo shirts were launched in 1933 and are probably the first example of sportswear as fashion.

Excerpt from: The Art of Looking Sideways by Alan Fletcher

💎 On the persistence of musical memory (even late stage Alzheimer’s patients)

The most striking examples of the persistence of musical memory come from observation of patients suffering from dementia. Late-stage Alzheimer’s patients who have difficulty recognizing family members and familiar objects can still recognize familiar songs. In some instances, these patients are able to sing despite having lost the ability to speak.”

The unique strength of musical memory has puzzled researchers for years, but one possible reason for the robustness of musically encoded memory is that music is encoded by several different regions of the brain. While auditory regions are primarily involved, so are parts responsible for imagery and emotion. Because musical memories are laid down in multiple brain regions, stimulating any one of these regions may spark their retrieval. It also may be the reason musical memory persists so long in dementia patients. If one brain region becomes damaged, the other, healthy regions can pick up the slack, theoretically providing “backups.”

Excerpt from: Blindsight: The (Mostly) Hidden Ways Marketing Reshapes Our Brains by Matt Johnson and Prince Ghuman

💎 The worrying amount of effort spent discussing how people should be (rather than dealing with how they are)

One of the greatest reasons why so few people understand themselves is that most writers are always teaching men what they should be, and hardly ever trouble their heads with telling them what they really are.

-BERNARD MANDEVILLE, Fable of the Bees!

Excerpt from: Radical Uncertainty: Decision-making for an unknowable future by Mervyn King and John Kay

💎 Pricing two items equally makes choosing harder (and could result in fewer sales)

Kim, Novemsky, and Dhar (2013) ran this gum experiment in South Korea. Participants were given W1,000 (about $1) and asked which gum they would like to buy. Participants could also choose to keep the money and not buy any gum. When both gums were priced at W630 only 46% of participants decided to buy one of both options, but when the price was slightly different (W620 vs. W640) this proportion increased to 77%.

Excerpt from: The Psychology of Price: How to use price to increase demand, profit and customer satisfaction by Leigh Caldwell

💎 It’s well proven that price affects quality perceptions (but its effect is weighted on a number of factors)

Völckner and Hofmann (2007) analyzed 71 studies from 23 publications spanning from 1989 to 2006. The researchers distilled following findings:

  • The impact of price on quality perception is significant but has decreased since reported in the late 1980s (Rao and Monroe 1989).
  • Price-quality inference is stronger for higher-priced products.
  • Price-quality inferences decrease with increasing familiarity with the product.
  • Price-quality inference is stronger for fast-moving consumer goods than for services or durable goods.
  • Price-quality inference is stronger in European countries than in North American countries.

Excerpt from: The Psychology of Price: How to use price to increase demand, profit and customer satisfaction by Leigh Caldwell

💎 We start guessing the end of sentence before finishing it (the order in which writers place their words matters)

According to Bergen, we start modelling words as we start reading them. We don’t wait until we get to the end of the sentence. This means the order in which writers place their words matters. This is perhaps why transitive construction – Jane gave a Kitten to her Dad – is more effective than the ditransitive – Jane gave her Dad a kitten. Picturing Jane, then the Kitten, then her Dad mimics the real-world action that we, as readers, should be modelling. It means we’re mentally experiencing the scene in the correct sequence. Because writers are, in effect, generating neural movies in the minds of their readers, they should privilege word order that’s filmic, imagining how their reader’s neural camera will alight upon each component of a sentence.

For the same reason, active sentence construction – Jane kissed her Dad – is more effective than passive – Dad was kissed by Jane. Witnessing this in real life, Jane’s initial movement would draw our attention and then we’d watch the kiss play out. We wouldn’t be dumbly staring at Dad, waiting for something to happen.

Excerpt from: The Science of Storytelling by Will Storr

💎 Initial randomness amplified by social proof makes predicting the popularity of things tricky (restaurants are a good example)

Imagine two restaurants of comparable quality. Along came the first customer, who has to choose between the two he flips a coin and picks restaurant A. Now imagine the next customer. Confronted with the same choice, she has the same information plus she sees the first customer sitting in the window of restaurant A. What does she do?

You can see where this is going.

But at this point, restaurant B still has hope-how much does the second customer trust the first customer’s choice? Well, is he attractive? Does he smoke? How’s he dressed? What’s his posture? The more the second person identifies with the first, the more she trusts his choice.

Once the second customer chooses restaurant A too, it starts to solidify a consensus. The third customer would have to buck a significant trend, voting against two people, in order to choose restaurant B.

Soon, you can imagine a line put the door of restaurant A, while restaurant B sits empty – despite the restaurants’ similar quality.

Excerpt from: Brain Candy: Science, Paradoxes, Puzzles, Logic, and Illogic to Nourish Your Neurons by Garth Sundem

💎 How Sears outdid their main competitor (by making their catalogue slightly smaller)

And it inspired competitors – notably Sears Roebuck, which soon became the market leader. (The story goes that the Sears Roebuck catalogue had slightly smaller pages than Montgomery Ward’s – with the intention that a tidy-minded housewife would naturally stack the two with the Sears catalogue on top.)

By the century’s end, mail-order companies were bringing in $30 million a year – a billion-dollar business in today’s terms; in the next twenty years, that figure grew almost twenty-fold. The popularity of mail order helped fuel demands to improve the postal service in the countryside – if you lived in a city, you’d get letters delivered to your door, but rural dwellers had to schlep to their nearest post office.

Excerpt from: The Next Fifty Things that Made the Modern Economy by Tim Harford

💎 If you’re creating funny ads for your brand best to run them in programmes that get watched in groups (it’ll make them even funnier)

The contagious effect of humour explains the results of a 1991 experiment conducted by University of Houston psychologists, Yong Zhang and George Zinkan.

They recruited 216 students to watch 30 minutes of music videos interspersed with soft drink commercials in groups of one, three and six. In order for the test to be as realistic as possible, the participants were told they were going to be questioned on their music preferences.

Their key finding was that ads tended to be rated as least funny when they were watched alone. In contrast, ads watched in groups of three and six were reported to be 21% and 10%, funnier than those watched alone.

The impact of groups might be due to social proof – this is the idea that people are influenced by others’ behaviour. If one person laughs, it encourages others to find the content funny.

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

💎 If/then tactics as a way to achieve goals (the bigger the goal, the better the results)

In hundreds of studies spanning all kinds of contexts from eating better to completing homework assignments to saving money to avoiding the impulse to react to people on the basis of their skin color-Gollwitzer and his colleagues have demonstrated the power of people taking the time to anticipate in advance the obstacles they might face when meeting future aspirations. For example, people who want to eat healthier might jot down all of the possible temptations they’ll face in a week to eat junk food, and then set up a plan to respond to each of those urges.

What’s surprising about Gollwitzer’s research on if/then techniques is that it reveals that the more difficult the long-term goal, the greater the power of the tactic. It works better, in other words, for the challenges that elude people’s sheer willpower.

Excerpt from: The Optimist’s Telescope: Thinking Ahead in a Reckless Age by Bina Venkataraman

💎 How workplace competition can backfire (dangers of “stack ranking” systems)

One well-known example of a dysfunctional workplace competition was GE’s “Rank-and-Yank” system, where the bottom 10% of the organization’s employees were fired on a regular basis. Another was Microsoft’s “Stack Racking” system, where an employee’s expectations for promotion were based on how they were ranked among their peers. A personal friend of mine who worked at GE many years ago stated, “The Rank-and-Yank system there made sure that everyone hired people weaker than themselves so they were never in danger of being yanked. When we interviewed a brilliant candidate, we made sure they never got the job because it would put ourselves in jeopardy or potentially result in a smaller bonus.”

A Vanity Fair article by Kurt Eichenwald cites that “Every current and former Microsoft employee I interviewed – everyone – cited stack ranking as the most destructive process inside of Microsoft. Peter Cohan from Forbes stated that, “[Stack Ranking) directed [Microsoft employees] to prevent their peers from getting outstanding performance reviews and brag about their accomplishments to each member of the management committee that determined their relative ranking.”

As you can see, workplace competition can be extremely destructive to company morale, especially during weak and uncertain economic conditions where people are preoccupied with getting laid off.

Excerpt from: Actionable Gamification: Beyond Points, Badges and Leaderboards by Yu-kai Chou