Mike Lehr's Blog

There is no place that the revisiting of our unconscious urges are taken more seriously than in retailing. The Economist article “Retail Therapy” appearing in the December 17, 2011 edition gives a great historical accounting of the rise and fall . . . and rise again of the application of Freud in business which Ernest Dichter is noted for introducing. As the article asserts:

Every week seems to yield a new discovery about how bad people are at making decisions. Humans, it turns out, are impressionable, emotional and irrational.

Increasingly, researchers are finding Dichter’s assessment that “most people have no idea why they buy things” to be correct.

Of course, “Sigmund Freud argued that people are governed by irrational, unconscious urges over a century ago.” However, as we saw earlier, it took science almost a hundred years to acknowledge that the subconscious existed. Meanwhile, “businesses were recognizing the limits of quantitative studies . . . which offered little genuine insight into how customers behaved.” Said more directly, you can’t rely on customers to tell you what they might buy.

The failures of online dating showed this truth as well as research into people’s internet surfing habits. The Atlantic’s article, “Learning to Love the (Shallow, Divisive, Unreliable) New Media,” which appeared in its April 2011 demonstrated that it’s “not what [people] say they want, nor what they ‘should’ want, but what they choose when they have a chance.”

If this applies to purchases, it also applies to all decisions. Names can affect decisions about scientific grants, and information that judges know is wrong can affect their decisions. So, if people don’t behave and choose as they said they would, we have no one to blame but ourselves for not looking deeper into the real emotions powering us.

Beauty’s power often influences us without our knowledge and thus distorts our decisions. In other words, we think we are making them based upon objective criteria, but we’re not. In order to understand this better, it helps to see beauty beyond something feminine and physical.

In the August 27, 2011 issue of The Economist, “The Line of Beauty” reviews three books examining the “economics of good looks.” While it focuses on physical attractiveness and implies it’s somewhat the same as beauty, it includes a masculine aspect to the concept. For instance, it cites:

• Homely NFL quarterbacks earn less than their comelier counterparts, despite identical yards passed and years in the league.
• Attractive people also have an easier time getting a loan than plain folks, even as they are less likely to pay it back.
• [Attractive people] receive milder prison sentences and higher damages in simulated legal proceedings.
• . . . looks have a bigger impact on earnings than education . . .

However, the real point is that beauty applies much of this power below our consciousness. For example, in none of the citations above did anyone think these:

• Quarterbacks are attractive so we should pay them more.
• Loan applicants are attractive so we should give them a loan.
• Prisoners are attractive so they should get milder sentences.
• Plaintiffs are attractive so they should get higher damages.
• Employees are attractive so they should get paid more than those with better educations.

Moreover, the overwhelming number of folks making these decisions didn’t feel that people’s attractiveness was influencing them. Now, if this can happen with physical attractiveness, imagine the impact beauty can have. Disciplines such as advertising, marketing, merchandising and retailing contain many examples of beauty’s sublime power.

Other links in this series:

• Beauty as Power
• Beauty as Power (Part II): Attraction vs. Beauty
• Beauty as Power (Part III): Appreciation

Intuitive approaches often work because we don’t believe they do. Advertising is an excellent example: it influences us because we often believe it doesn’t.

This extends to our complaints about politicians not answering the question. Todd Rogers and Michael I. Norton researched this and were asked to “Defend Your Research” in “People Often Trust Eloquence More Than Honesty” appearing in the November 2010 issue of the Harvard Business Review. They found:

People who dodge questions artfully are liked and trusted more than people who respond to questions truthfully but with less polish.

In fact, when answerers perform the dodge effectively, less than half of the people could remember the question accurately. The key rests in the answer’s first ten words by disrupting the cognitive link we have for the question and expected answer. In everyday life, we like to complain about the fast-talking salesperson; however, on a higher level, fast-talking becomes eloquence. It’s here that we increasingly trust and like eloquence more than honesty.

Even though I promote the practical understanding and application of intuition in business on this blog, people can use intuitive approaches for ill or good. For instance, my guest 12 Most post, lists ways to influence people intuitively to build morale; however, people can use these techniques for questionable purposes too.

How do we defend ourselves? There are two broad introductory ways:

1. Realize people can influence us intuitively and subconsciously even if we believe they can’t
2. Raise our awareness regarding intuitive approaches

In this way, we can begin accounting for these natural biases in our decision-making and actions. However, believing others can influence us without our knowledge is scary for many of us, especially if we believe in the supremacy of the conscious mind and free will.

Previously, I listed some unconscious biases we have in decision-making. What I witness is that people just don’t believe that known wrong information has any affect on them.

For example, research in “Before You Make That Big Decision” by Daniel Kahneman, Dan Lovallo and Olivier Sibony* which appeared in the June 2011 Harvard Business Review showed that dice rolls “suggesting” sentencing decisions to judges did in fact influence their final decision even though they knew these decisions were made by dice.

Cognitively and psychologically, we call this “planting of a seed” in our minds as anchoring. We experience its negative side when someone is locked on a thought based on incorrect information that we tried to expose for them. As with the judges, this erroneous information assumes a frame of reference for their decision on a subconscious level.

As the writers indicate, anchoring’s real danger is “that people always believe they can disregard them” because the information is incorrect. They don’t believe it. However, it affects them in the same way that intuition affects our thought processes. However, since people don’t realize it, they will shop for rationales to attribute elsewhere this influence on their decisions.

Anchoring also affects our views of people and contributes to the unconscious pigeonholing of people. This can tremendously affect our ability to assess and develop talent. This is why the gossip and unfounded opinions of others will still influence us even though we “ignore” them to form our own opinion.

We need to raise our awareness concerning the influence this has on others, and more importantly to us. We can’t believe we are immune; we need to make conscious adjustments or else we will fall prey to the influence of known wrong information too.

*Olivier Sibony is a director in McKinsey’s Brussels office.

Intuitive approaches, ones that influence people on an emotional, often unconscious level create additional options for almost any problem, especially if they involve people. Too often though, we look at problems objectively: we solve problems rather than alter how people feel about them.

Customer service is fertile ground for intuitive approaches. In the May 2011 issue of the Harvard Business Review, Ryan W. Buell and Michael I. Norton write in “Think Customers Hate Waiting? Not So Fast…” that customers will endure waiting “even when what’s shown is merely the appearance of effort.” Examined this way, customer service is theater, even entertainment. People pay to see comedians. Why wouldn’t they feel better about the same old service if it was suddenly more enjoyable?

Once, a quality service group, who had already heard many speakers on the topic, asked for a different approach from me. So, I taught them how to improve customer service without changing one process for doing so.

Here’s the key: don’t assume you improve customer service by providing better service. This doesn’t matter if customers don’t know or don’t feel that you are servicing better. So, communicate better that you are providing better service and influence better how customers feel about the service.

Previously, we saw that changing people’s feelings for you would change how they interpret your message even if you don’t change anything about the message. This principle holds true for customer service: change how they feel about you and you will change how they feel about the service even though you don’t change one thing about the service. We saw the same with management-employee relations.

By thinking of ways to influence people’s feelings about problems, we create more problem-solving options. Customer service is ideal for seeing how effective this can be.

Writing down the problem was a problem-solving technique I discussed in a previous post. Attacking definitions is another that complements this one. For instance, consider the problem:

Making a better window

We now attack what we mean by “making,” “better,” and “window.” For example, by making do we mean create, produce, deliver or service? By better do we mean cost, maintenance or longevity? By window, do we mean a current offering or a new one? Through this attacking, we begin to attack our definition of the problem, stimulating our thinking and opening windows to potential solutions.

We can visualize what’s happening with a castle. Its walls define what comprises it while at the same time what it doesn’t. However, if we need to repair a building inside the castle, the materials might not rest within the castle walls but outside them which the walls don’t allow us to see. Definitions work the same way: they define what a word comprises and doesn’t comprise. While they help to focus our attention by erecting walls to keep out confusion and vagueness, they also hinder our ability to see solutions resting beyond their walls.

Thus, the solution to our window problem might not be a window with enhanced qualities. It might be one easier to install and service, or one quicker to produce or less costly.

We can also apply an intuitive approach by asking, “Does the window need to be objectively better or just perceptually better?” If so, the solution might be as superficial as having a better advertising campaign to point out its advantages. All of these might solve the problem depending upon how we define the words. In short, it might be as simple as defining the problem better.

A commenter inquired why the “good job” compliment isn’t intrinsic since “doing that good job comes from inside a person (an experience, or a value); it’s not something that can be taken away.” There are three main reasons. They also serve to explain why the compliment, while acceptable, is inferior to other compliments.

First, “doing a good job” is different from the “desire to do a good job.” Performance exists outside of us, desire within. People perform well for many reasons beyond the desire to do a good job: money, recognition, promotion, peer pressure etc. For example, two children can read the same difficult book; however, there is a difference between the child who reads the book for a promised candy bar and the other child who reads it for the love of reading.

Second, the determination of a good job is subjective; it varies by the person establishing standards and evaluating outcomes against those standards. You can “take away” a good performance by simply using a different evaluator. For example, other teachers might not consider the above book’s difficulty worthy of compliments.

Third, the product of a good job can be erased. A good painting could be destroyed, a good program terminated, and a good sales year erased with the start of a new one. “What have you done for me lately,” exemplifies the negation of performances. In the above example, the child’s reading of the difficult book might elevate his grade this period but won’t for the next one. However, the love of reading continues on.

Yes, the “good job” compliment is adequate. However, “Reading that book shows that you have a natural love for reading,” is far better. Again, it’s because we are complimenting a quality of the person (intrinsic) versus an outcome (extrinsic).

Here’s a friend’s story. It’s an example of what we can hypothesize about people from everyday comments. They are a starting point from which we can probe, learn and build relationships.

Black Bark

Situation

My friend, as part of a touring group, visited a contemporary art gallery. She was talking to a man in the group who said he prefers artists who “stab him in the gut.” She asked him what a mainly black piece composed of bark and charcoal meant to him. He said it was “very cleansing” and that the black pieces on the canvas “represent all the dark and negative energy in the room being absorbed.” For him, it made the room light and “cleansed of all negative energy.” My friend found two other pieces that he liked disturbing.

Commentary

Possibly, the pieces of black wood and charcoal might not only be pulling negative energy from the room but also from him. This is further supported by preference for artists who “stab him in the gut.” Feelings of mutilation can often be prompted by negative energy from within. Moreover, knowing my friend, she would not want artists (or anyone for that matter) to stab her in the gut, a disturbing thought. On the other hand, since feelings help us feel alive, the man might value intense, almost shocking feelings.

Approach

In building a rapport with him, I would initially:

• Allow him to “shock” me
• Avoid expressing disapproval
• Show extreme interest
• Encourage him to do most of the talking

If he appeared disinterested with this approach, my alternative path would involve direct and edgy questions and remarks. I would also consider expressing, in a positive way, how unique he was for holding such views.

Note: Details of the original story have been changed. Any relationship to specific people is coincidental.

One of the major characteristics of intuitive approaches for leadership is the dominance of intrinsic rewards over extrinsic ones. The demarcation between the two is most clear in studies of the effect of praise over money from immediate managers. A November 2009 article from McKinsey Quarterly, Motivating people – Getting beyond money, is but one example.

In addition to praise from an immediate manager, the article sited attention from leaders and opportunities to lead as two other nonfinancial rewards valued above compensation. However, the transition to nonfinancial rewards is difficult for many managers. A major reason the article gave was that “nonfinancial ways to motivate people do, on the whole, require more time and commitment from senior managers.”

While this is true, an important aspect that is rarely examined is that the tendency to praise is a function of personality. In order to praise and interact effectively, people need to have some emotional awareness and sensitivity. Just as some cars are better than others, some praises are too.

For instance, a manager who is more easily drawn to statistics, reports, information and finances might not have the personality necessary to encourage him to seek out opportunities to praise and spend individual time with employees. Moreover, while some extroverts can excel at networking a room, they can fail miserably at nonfinancial rewards. It’s one thing to have polite, congenial conversations in public but quite another to have involved, developmental discussions with an employee one-on-one. This is why some great public speakers can’t teach and some teachers can’t speak publicly.

Until companies look for personalities and aptitudes conducive to using nonfinancial rewards, overreliance on compensation to motivate will continue.

I came across a book review in the October 11, 2010 issue of The New Yorker about The Thief of Time, edited by Chrisoula Andreou and Mark D. White. It’s a collection of essays on procrastination. Under an illustration there was this caption: Procrastination interests philosophers because of its underlying irrationality.

I never knew that procrastination received such puzzling attention. No one can really explain why we do it. Yet, it’s very common across all personalities. What makes it even more puzzling is that “indulging in it generally doesn’t make people happy.” In fact, according to Professor Piers Steel of the University of Calgary, “people who admitted to difficulties with procrastination quadrupled between 1978 and 2002.” He defines it as “willingly deferring something even though you expect the delay to make you worse off.”

Why is this important to intuition? Well, in order to appreciate intuition’s impact, we need to appreciate the degree to which our emotions influence our decisions and actions. Since procrastination is a frequent, everyday occurrence, it can serve as a tangible reminder to go beyond simple, rational analysis.

While many of us would acknowledge this, we often don’t practice it. Rather, we attempt to analyze problems in rational, logical and objective terms employing the best scientific analysis we can muster. We try to quantify then weigh benefits and costs without even considering the emotional weights of each. Then, we try to communicate our findings in the same way.

This can lead us astray because in reality emotions play a dominant role in people’s decisions and actions. Thus, when we try to be objective, we often aren’t realistic. Imagine not accounting for procrastination in planning because it’s irrational.