Volume 1, Issue 13

August 24, 2010

Selecting Choices

How can you explain the conundrum created when the most selected option is also the most rejected?  Volunteers asked to choose a vacation destination between Medicoreville, where everything is average, and Extremecity, where the beaches are stunning, but the hotels horrible, the food exquisite, but the service poor, commonly selected Extremecity.  However, when presented with the situation where tickets for both destinations were already purchased, and one needed to be cancelled, the common selection was again Extremecity.  So why would the most selected, also be the most rejected?

It seems routine human behavior is to consider only the positive points when selecting, and only the negative points when rejecting.  When consensus is needed in a group, we focus on arguing the severity of the points to reject something, or the value of the points to accept something.  We don’t connect with the opposing side, because we focus on the attributes of our option, and the shortcomings of the other option, while our opposition does the same.  The White of A versus the Black of A, and the White of B takes on the Black of B.  Four points, and then their finer points, relative value, and next thing you know, the meeting is adjourned with another meeting.

Evaluating Options

Moving forward is as simple and easy tool as the Pro/Con comparison, of which everyone is widely familiar.  A cousin of this tool, the PMI comparison, forces focus not only on the Pluses and Minuses, but also on the not easily categorized differences, known as the Interesting points.

Pull out this tool before emotions get involved, before decisions are made creating a need to defend, and before titles and rank can be evoked.  Add some criteria, some weighting, and you have removed titles, emotion, and aggression.  Innovate a tool to suit your needs, if you feel the courage, need or desire.

Missing the Decision

If it is so simple then, why don’t we benefit from it more often?  With most tools, the power lies not in how to use the tool, but rather when.  Realization that we are in decision making mode, evaluating options, or weighing choices, is the key to pushing past irrational human behavior and tapping into the kind of results that we are all after – the kind with higher returns, with a greater possibility of happiness, and a reduced possibility of risk or loss.

However, brain scientist tell us that decisions are made up to seven seconds before we are aware that we have even made one.  Brain scientists estimate that between 80 and 99 percent of decisions are automatic.

Then the brain finds information to prove that this automatic, unconscious decision was the right one.  In studies were equal information was provided to volunteers, they were able to ignore any contradictory information and select only pieces that proved their initial opinions.  This is refered to as confirmation bias.

Cognitive dissonance makes sure that we alway make the right decision, as least according to us.  This mechanism ensures that we are as awesome as we think we are, and we are all pretty sure we are way above average.  In this way, any information that contradicts our high esteem must be wrong, and we can and will find a way to reject it.
Stopping this freight train of decisions is as simple, if not simplistic, in becoming aware of our actions.  Why are we doing what we are doing?  What is the intention?  Once we become clear on intention, we can evaluate if  our actions are the most appropriate, or if they are motivated by our lizard brains, responding with fear.

Fear can take many forms, from a loss of acceptance, a loss of identity or a fear of failure.  It takes over our brains causing four distinct phases that can last a millisecond or a lifetime.  This process is freeze, flight, fright, fight.  Because we are all human, we are all operating out of one or a combination of these modes.

The Bottom Line

Human beings are completely rational, if not logical and we have the power of choice.

Volume 1, Issue 12

August 17, 2010

A Fear of Ambiguity

Fear change?  When we make New Year’s resolutions, buy lottery tickets and channel surf, it might be safe to presume that change is not the enemy.  Rather, the source of fear lies in the ambiguity of change, of not knowing exactly what the future contains.  Change gurus tout the need to involve the affected parties, solicit input, and bring people along, and it’s all in part to remove the ambiguity of change.
However, without the ability to embrace the greyness of ambiguity, we decide ahead of time what the right problem is, instead of allowing the data and information to tell us.  Instead, confirmation bias kicks in, and proves what we assumed we knew all along.  Going through the grey is necessary to unleash innovation, find new solutions, and actually, to have fun. 

The Thrill of Adventure

Are you more annoyed by the things that don’t change or by the things that don’t stop changing?  People will never stop queuing at Canada’s Wonderland, the next big screen glory bloodbath, or a highway traffic accident because it takes them to the edge of the dividing line between safe and heart-poundingly not.  To experience this state with respect to change in your life takes a little being bold. 
Bold is an acronym for Belonging, Originality, Love and Dissatisfaction. With these four conditions in place, innovative valuable ideas are generated, shared, built upon, and translated to competitive advantage and profitable growth for the thrill of adventure in change.  Read More...

Managing the Risk of Ambiguity

Especially in these uncertain times, an intolerance of ambiguity drives behaviour that costs the bottom line.
Ambiguity, the opposite of clarity, can be as highly uncomfortable as driving in a torrential downpour, with a total lack of visibility.  In a panic to find our way into clarity, we tend to take on certain behaviours.  However, this push for clarity can be a push in the wrong direction, as the following three examples illustrates.

Getting into the Weeds, Needing the Details

Attending too many meetings, pushing for the details, and getting into the weeds are all major time wasters of managers who have more important things to dwell on.  This behaviour decreases moral by demonstrating a lack of trust in the capability and character of employees, creates red tape blockages with required approvals and generally does not positively impact value, as it ends up taking many people to get something done.

Jumping to Conclusions, Avoiding Proper Research

Needing to "know", instead of living in the mystery while adequate research and discovery is undertaken, leads to working on the wrong problems, wasting precious time, energy and resources.  It pushes us to know the answer instead of properly finding it.  It leads to change for the sake of change, destroying the baseline that is required to find the real and true problem.

Setting Concrete Strategies, Planning too Far Ahead

The future is uncertain.  No one knows what is going to happen tomorrow, next month or next year.  Yet when we need clarity, structure and tangibility we create and adhere to plans despite the uncertain future.  This leads to inflexibility, getting far off course, and not being in tune to current customer needs or requirements - leading them to venture elsewhere.
Although the future is uncertain, perhaps now more than usual, embracing the mystery with a curious, open and flexible attitude will help us rise above difficult times.

The Bottom Line

Everything can change in the next minute.  The future is always uncertain and uncontrollable, and is always a gift.

Volume 1, Issue 11

August 10, 2010

The Value of an Anchor

Nick Schuyler’s survival claimed headlines earlier this year when his NFL fishing buddies succumbed to the cold water.  What missed the limelight was the fact that the incident was caused by not wanting to lose another $20 anchor, like they had the previous weekend, when the anchor stuck and the line had to be cut.  In a misguided attempt to yank the anchor out with the boat’s engine, they tied the rope to the back of the boat and hit the gas.

With no weight in the bow, the boat flipped over as physics would predict.  Did Nick spend his 36 hours wondering about the value of an anchor, or the competitive spirit rallied against “this anchor is not going to win”? In the name of boating safety, the burden he will always carry, and the broken families, understanding how anchoring affects decisions can be one positive outcome.

Fear of Loss

Loss is relative to a certain state, whether it is a price that we are used to paying, an item that we own, or an identity that we wear.  When this anchor is threatened, fear takes over and guides behaviour.  The fear response is deeply embedded in the brain, as a survival mechanism.

This fear of loss is debated as the number one fear shared by all humans.  Marketing and advertisements take advantage of this motivating force with the common phrases “act now!” and “last chance!”  Although it looks obvious and shallow, they use them because they work.

Nature has an ability to make us attached to what we have – instantly.  The threat to “mine” is the driving force toward poor decisions and can set in before we actually even own it, as you may have experienced if you have ever planned to buy something, only to find it already sold.  Salesmen call this the puppy dog technique.  Let them act as if it is theirs and they won’t be able to part.

Mental Anchoring

In fact, anchors exist figuratively as well, causing similar distress.  When we buy stock at a certain price, and it falls, we can watch one little fall after another, until all the value is gone.  When we fight to preserve an identity, protect a story, or present an opinion, we can also suffer the same consequences until we stand alone.

Smart companies use this anchoring to their advantage.  Consider Starbucks.  A five dollar coffee when the price is mentally anchored at a buck?  It’s not a coffee anymore, it’s an experience, it’s a venti latte.  That’s entirely different.

Students were asked to recall their SIN number, and then after that to bid on a bottle of wine.  Bids correlated with the SIN numbers, with higher bids placed by students with SIN numbers beginning with nine, than students who had SIN numbers with one, with a linear distribution.

The value delta  of ownership between sellers and buyers can be large.  In one study, the value of a ticket to a basketball game was $2,400 for those who had one, and $170 for those that were willing to buy one.

Economists expect that buyers react uniformly to price increases or decreases, not expecting a greater sensitivity in either direction.  However, when the price of eggs rises, consumers cut their spending by two and a half times.

Avis and Hertz, faced with the challenge of selling a useless and overpriced product have capitalized on loss aversion by asking if we would like to buy the loss damage waiver.  Framed factually, it is redundant and would cost $5000 on an annual basis, but the majority says yes.

When it comes to protecting identity, be careful what you say.  When Bush was President, he asserted, “We will not fail,” when it came to Iraq, starting a downward spiral of one unsupported decision after another.

Daniel Kahneman, who first discovered loss aversion, wrote “to withdraw now is to accept a sure loss and that option is deeply unattractive.”

The Bottom Line

Embracing change, in material goods, opinions, and self concepts is vital to overcoming loss aversion.

Volume 1, Issue 10

August 3, 2010

Short Cut Communications

Ferrari and Marlboro know a thing or two about the succinctness of a message, having come under fire for their barcode advertisement on the Formula One car.  While it looks innocent, it also looks like a perfect way to circumvent the laws of cigarette sponsorship.  Does it work?  It has certainly increased the conversations, though I hope otherwise.

A brand is a short cut message to convey to customers an identity.  When maintaining our identity is the motivating factor behind cognitive dissonance, it is important that we are sending the message that we want to be sending, and that behaviour shows the same story as the words.  Without that alignment, customers get confused. If you say fast, be fast.

The Power of an Alter Ego

Lady Gaga, Marilyn Monroe, and Beyonce all understand the power of an alter ego.  More than just changing a name, an alter ego facilitates a desired shift in perspective that translates into a shift in results.  It is simply a personal brand.

In an interview with ITN Music, Beyonce explains that she is natural, thought provoking and serious, while Sasha Fierce is who she is on stage when she is performing.  With a litany of awards and accolades, something must be working.  Read more about how to tap into that power...

Strong Brand Messages

Brand messages need to be accurate and consistent in order to be powerful, speaking to the uniqueness of that brand.  For instance, neither Coca-Cola nor Pepsi has a mission statement to be the world’s top provider of cola products, as that would simply be unachievable given the realities of their competitor.  Instead, they follow their distinctness, hone their differences, and divide the market.  Coke goes after classic, Pepsi after youth.

When each contributor is aligned to one goal, to serving their unique purpose, astounding results can be achieved, reminding each of us of the possibilities in life.

Brand messages don’t stop at the corporate level.  Each department, team and level in the organization has a specific role to fulfil.  When that purpose is known, communicated and understood, alignment happens.  People know who to go to and for what.  In the age of technology and less and less face time, understanding and fulfilling unique differences is crucial.

A team effort is more than a bunch of people working on the same thing.  Genius team effort is a synergy of individual specialized excellence.  On a hockey team, you would not expect the goalie to make strategic decisions, you expect him to keep the puck out of the net.  Strategy is the role of management.

Each individual has a specific, unique role to play that defines their individuality.  The puck is passed from one player to another, as each performs their contribution.  Alignment to one goal and the meshing of one individual contribution into the next is what defines genius teams.  A strong team comes from strong specialized performance.

With each team member contributing their piece of the puzzle, no role is any more important than any other role, different, but equal to delivering success.  A bottle of pop cannot arrive in the customer’s hands without each Coca-Cola employee performing excellently, from ensuring the right preventative maintenance to guard against equipment failure, to having quality sorting and loading of transport trucks and vending machines, to hiring and retaining people committed to serving the customer, to name just a few.

The Bottom Line

Everyone has a unique identity, individually and collectively, which needs to be chosen consciously, deliberately, and clearly.