Mike Lehr's Blog

In a previous post, I discussed the rebirth of Freud and the idea that most (if not all) of our decisions are driven unconsciously. Personification is a way we can influence others’ decision-making on this level.

Revisiting The Economist article “Retail Therapy” in its December 17, 2011 edition, it says about Ernest Dichter, who revolutionized marketing in the 1960’s:

Dichter understood that every product has an image, even a “soul”, and is bought not merely for the purpose it serves but for the values it seems to embody . . . Dichter’s message to advertisers was: figure out the personality of a product, and you will understand how to market it.

Personification is giving something a personality. For instance, my wife has a name for her car. People do the same with boats. Advertising often links products to celebrities; they become the “face of the product”, and thus its personality.

Translating to business, we encourage change if we can give change a personality. Sometimes it’s as simple as putting the face of the Owner, President or CEO on the change by saying, “It’s George’s initiative.” We can do this formally or informally; we can do this with projects, ideas and plans: “This is Mary’s project, Matt’s idea, Kathy’s plan.”

We can also reference other types of people to the change such as “The Herculean Effort,” “The Superman Plan,” and “The Rocky Project.” Any person will help as long as the connection to the person is a positive one. For example, if people don’t like Mary, her name will likely hurt the change.

When it comes to change management, we often neglect to tap into the techniques that work in advertising, merchandising and marketing. Personification is just one of those techniques.

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.

Many companies are finalizing their 2012 strategies by planning their roll out to their employees. To this effort, Nilofer Merchant’s March 22, 2011 post on the HBR Blog Network, “Culture Trumps Strategy, Every Time,” is very apropos and relates to my “Best Decision as Myth” post: we often spend more time trying to make the best decision than we do trying to ensure we can implement it. A vital aspect of that implementation is a healthy company culture.

Taking Merchant’s themes further, an important part of a healthy company culture is the relationship between management and employees. That is more than just having a great vision, definable roles and enforcing accountability. It’s about doing the sublime relational techniques that mean so much even though they don’t seem to serve a direct business purpose. For instance, it’s important for managers to spell their people’s names correctly. Yes, unfortunately, this isn’t an automatic.

I’ve called this placebo management. If there is scientific evidence supporting the positive effect of placebos in medicine, they can work in business too. While managers are taught around the world in business schools about the more concrete aspects of visions, goals, compensation, information and credentials in developing relationships, they rarely learn the more intuitive aspects of relationships. Consequently, they never learn how to change the message without changing anything about it. Conversely, they don’t learn that even the best message can be ruined by a lousy messenger.

The holiday season is approaching and many companies and teams get together in celebration and camaraderie. It’s often a time to develop business relationships on a more human level. Good interpersonal relationships we develop with employees ensure a company culture that can implement strategy. Let’s make every month the holiday season in this regard.

In this series’ previous post, I wrote about using Wordle to help identify word usage and phrasing trends by people as a prelude to identifying personalities in a real-time sense. In this series’ first post, I wrote about using everyday conversation to identify personalities. In this post, I will combine the two concepts to validate our findings, which I call extrapolation. Essentially, we try to predict responses to our questions by changing topics.

For example, after listening to someone, we notice he talks extremely pragmatically about things. Extrapolating, we can ask him a couple decision-related questions such as, “Why do you like your house?” In our minds, we predict a pragmatic response. If he does respond with answers such as, “It’s close to work,” “In the school district we want,” and “We were able to get a good price,” then they support our findings. However, if he responses with, “The setting is beautiful,” “We liked the ambiance when we walked in,” or others, we know we need to work further.

Again, the challenge is being able to spot trends in word usage. The series’ previous post lists five other word pairs in addition to the one here: pragmatic versus emotional. Another challenge is avoiding iron-clad perceptions of people; our observations and conclusions should be ongoing and fluid as new discussions arise. It is quite possible for people to assume different personalities in similar situations depending upon their moods.

For instance, people will often behave one way when they’re happy and another when they’re angry. That’s why results from classical self-reporting personality assessments can vary. The book Was That Really Me? by Naomi Quenk does an excellent job highlighting this phenomenon.

However, this only reinforces the persistent point that personality assessment requires ongoing practice and modification.

Other posts in this series:

• Assessing Personalities thru Everyday Discussions (1.0)
• Real-time Personality Assessment (Pt 2): Important Qualities
• Real-time Personality Assessment (Pt 3): Word Themes

When I’ve written about the illusion of free will, I’ve focused on the advancement of technology and research methodologies to uncover subconscious thought patterns. However, these advancements are also discovering a connection between chemical reactions and some of our emotions.

In the September 24, 2011 issue of The Economist, the article, “Rogue Hormones,” reports on the research of John Coates, a  neuroscientist from Cambridge University. His research of derivative traders showed that when they “are on a winning streak their testosterone levels surge, sparking such euphoria that they underestimate risk.” This biochemical process produces extremely “powerful emotions” encouraging traders to “go crazy.”

This helps to explain why we often learn more from our failures than our successes and why success can deliver us to a state of hubris, an exalted arrogance that can corrupt our decision-making processes. Such biochemical processes help explain why such exuberance can infect many people to think and act similarly without communicating with each other while each is believing he is responding of his own free will. Thus, such events as financial bubbles and housing bubbles can occur on a broad scale.

A way to mitigate this effect is to diversify your workforce to include many types of personalities in decision-making positions. For instance, the article concluded that hiring women, who generally have about 10% as much testosterone as men, could help offset “irrational exuberance.” Experience can also help especially if it contains crises brought about by excessive risk taking. Moreover, even from strictly a gender perspective, not all men will experience the same increases in testosterone levels from success making them prone to erroneous risk assessments.

Of course, it’s not easy to manage a diverse workforce.

Many people agonize over decisions. A primary reason is belief in a “best” decision. Consequently, people run endlessly through their options when often there isn’t much qualitative difference among them.

I first became aware of this when discussing start-up businesses with an accountant. He made this observation: eighty percent of his clients ended up in businesses quite different from their initial plans. For example, one client began a retail operation in a specialty food product. One day, a grocer asked to carry the product. Soon, others did the same. Thus, the client was “forced” to shift from retailing a food product to manufacturing it.

However, the consistent quality in these start-ups was the ability to adapt quickly. So many times, organizations strive to research and plan their decisions then build consensuses around them. As a result, they turn decision making into a torturous process thus fulfilling the myth of the best decision: if it takes that long to make a decision then an outstanding is necessary. Thus, it’s hard to imagine an adaptive organization with an elongated decision-making process.

Yet, in our early school years, teachers grade us on right and wrong answers. Thus, our educational systems condition us to look for the best decision. Ironically, this conditioning is so strong that even a good decision is not satisfactory if it’s perceived as not being the best one.

Accelerating our decision-making allows us the luxury of correcting bad decisions more quickly. Thus, the fear of making bad decisions wanes if we have confidence in our groups’ abilities to learn, to correct its mistakes and to adapt a new direction. This is true for individuals too.

Even in hindsight, the best decision is not clear. We assume so because we make the false assumption that nothing else would have changed.

Classical business literature emphasizes focus: set goals, plan, and then focus on execution. However, it’s relatively void of focus’ downside: obliviousness to peripheral threats and opportunities.

In the mid-1900’s, when conditions didn’t change as dynamically as today’s, extensive research, planning and focus worked. Today, most research is outdated upon completion. Consequently, situational awareness (SA) becomes more important as part of an adaptive business strategy.

SA is the degree to which a person or company can be aware of surrounding conditions while focused on a task or plan. Ironically, SA came of age with aerial combat; you need to know where you are in the sky while focused on engaging enemy aircraft. If not, you could crash your plane from flying too low or from enemy fire simply because you were oblivious to those factors.

Context strongly influences our planning; however, if conditions forming that context are dynamically changing, that means our plan – the object of our focus – might become invalid by new threats and opportunities, and our focus and poor SA might cause us to overlook them. Psychological influences such as anchoring and optimistic planning will create additional pressures to keep us focused and ignorant.

These will also influence our assessment of talent by tending to make it too static and historical. Rather than basing it on people’s potential within new conditions, we will tend to base it on performances under old conditions. We will tend to believe that successes and failures transfer rather than assess actual skills and actual aptitudes within a new set of actual conditions. More simply, this is pigeonholing.

Technology and the internet strongly influence today’s dynamic conditions. Our focus shouldn’t blind us. SA will help us see the many threats, opportunities and talents that will influence our success.

The downside of many personality tests is that you need to administer them. Yes, some will teach you how to assess without doing that, but you must learn their system. In reality, we can all develop and do a real-time personality assessment.

In the first post of this series, “Assessing Personalities thru Everyday Discussions (1.0),” I wrote that asking “Why?” in response to other people’s observations can give you insights into their personalities. In this post, I’ll explore how we analyze the answer.

If you ask two people why they like a car, most likely they’ll give two different answers. For instance, if one answers, “performance,” and the other “looks,” both answers begin to help you distinguish their personalities by identifying important qualities to them. These qualities will likely extend to other areas, but we need to realize we’re are only hypothesizing right now; we only have one data point.

Now, if we discuss their favorite athletes and ask why they like them, this gives us more information. If the first one says, “She’s the best in the game,” and the second one says, “He just looks like he’s ready to play when he shows up,” we have additional information reinforcing their answers about cars: performance and appearance. Thus, the first person seems to prefer performance related qualities while the second one prefers visible ones.

Therefore, when we discuss other subjects with these people, we will need to highlight the positive performance attributes with the first one and the visible ones with the second if we wish a positive response.

Obviously, it’s not always this easy and obvious, but over a five to fifteen minute conversation, through careful listening, patterns like these will emerge. These patterns will allow us to extrapolate on a person’s decisions and behaviors.

I decided to revisit the illusion of free will after running across two other articles reinforcing it. As technology and research methodologies advance, we are finding more and more that biological and psychological factors heavily influence us without our knowledge, further eroding the rational actor theory. This theory forms the basis of many decision-making models in business; however, it’s turning out we cannot expect people to behave rationally.

The article by David Eagleman, “The Brain on Trial,” appearing in the July/August 2011 of The Atlantic, discusses recent brain and genetic research. Whether you believe nature or nurture is the more impactive force in our development, the point is this: we control neither. If free will really existed, we wouldn’t need drugs to cure depression because threats would work. As Eagleman also indicates, free will has tremendous difficulty overcoming what our subconscious has already decided to do. We cannot divorce behavior from biology or the unconscious. At minimum, free will operates in an increasingly smaller field of play.

We are also learning that genes don’t just change at an evolutionary rate but at a generational one too. In the July 23, 2011 of The Economist, the article, Baby Blues, mentions, “a mother’s stress while she is pregnant can have a long-lasting effect on her children’s genes.”
Biology and genes form an integral part of our personalities. As I mentioned in my previous post, if we look at personalities as being analogous to software in computers, we can see where knowing the personality can help us predict behaviors in much the same way as knowing the software can help us predict what a computer will do.

What this means is that our decisions need to factor in a reality where people don’t behave rationally because they aren’t free to do so.

Related link: Illusion of Free Will

The inverted problem-solving technique (IPT) involves looking at the opposing aspects of a problem. To see IPT’s value it helps to write down the problem. In simple terms, if the problem involves “doing something,” IPT suggests exploring “not doing it” as a potential solution (or “to do it” if “not doing it”).

For instance, I first ran across it as a child when I wanted to learn to play. The book, Complete Chess Course, by Fred Reinfeld had a section called “The Nine Bad Moves.” Rather than immediately teach you good moves, Reinfeld had you learn what not to do. Later, I applied the concept when I developed my training methods: I first identified what I didn’t like about training that I took.

We often spend extensive time evaluating and determining the best solution. In reality, there are often many solutions. Thus, IPT suggests that we look at avoiding a bad decision as a potential solution rather than trying to determine the best. For example, in change initiatives and technology rollouts not only ask, “What can we do to make this successful?” but also ask, “What shouldn’t we do?” Too often people only focus on what needs doing to solve the problem.

Additionally, IPT helps us explore problems deeper by qualifying its various parts. Often, we only ask, “Is this part causing the problem?” Such an evaluative approach limits us to “yes/no answers.” Rather than ask “Is this department hindering the rollout?” ask, “How is this department hindering it?” and “How isn’t it?”

We can even apply these questions to the problem itself (Why is it a problem? Why isn’t it?). After all, it’s not unusual to find people working on the wrong problem. Moreover, the answers themselves will help us find solutions.