Book Review: Alchemy
Human behaviour does not run on objective reality. It runs on contexts and meaning. Adman Rory Sutherland is a master storyteller who convinces you to start believing in magic.
A business leader once invited me to run a “Team Building” workshop for his leadership team. When I shared with him the design of the program, he told me that he already had worked out the design. He wanted the workshop to be held at a golf resort where the people would stay overnight. They would play golf for the two days that was intended to be for “team building”.
While the CEO would have never sponsored a two day golfing trip, calling it a team-building workshop was simply creative accounting.
Human beings are irrational. Yet when we try to solve real life problems, we tend to ignore the irrational side of people. I believe that HR comes in for so much flack because it assumes that people are rational. That assumption may be the problem that HR must address.
Rory Sutherland @rorysutherland is the Vice Chairman of Ogilvy & Mather Group, which is one of the largest and most renowned advertising agencies in the world. I just finished reading his book Alchemy. Based on behavioural science, Rory Sutherland through a mix of brilliant storytelling and examples (with some data points thrown in) establishes beyond doubt that there are easier solutions possible to many wicked problems.
An alternative to Coke?
In science there is one right answer. When it comes to human beings there are many answers. Sometimes these solutions can be puzzling.
If you were asked to create an alternative to Coke, the rational response would be to offer an alternative drink that is cheaper, tastes better and is put in a bigger bottle. What if the successful alternative was something that was sold in a tiny can, overpriced (so overpriced that they can sponsor a F1 team with the profits) and tastes TERRIBLE. Yes I am speaking about Red Bull. How do you explain the success of Red Bull?
A faster train
To cut down the travel time between two cities, the engineers would recommend building a faster train that runs on a separate pathway so it does not have to wait for other trains to pass. The cost of the solution was $6bn. What if the current train offered free wifi instead and not change anything else? That is cheaper than increasing the speed of the train. Sutherland calls it the “psycho-logical” solution.
Investing in building a stronger Employer Brand is a great way to attract better talent. The more famous the company the more the people want to work for that employer. When I was at Pepsi, I would ask applicants if they had a choice between a job offer from PepsiCo and a famous Indian company that makes savouries and snacks, how would they decide? You guessed the answer, they had seen far more number of commercials of PepsiCo and they wanted to work for a “cool brand” (their words). You probably made irrational choices yourself.
In 2014, a study conducted by researchers at Cornell University found that diners rated a restaurant buffet meal much higher when the bill was higher. In a 2005 study of painkillers published in the Journal of Marketing Research, study participants took the same painkiller, but the research showed that those who thought it cost more actually seemed to experience more benefits. Read more
I absolutely loved reading Alchemy and I think you will enjoy reading it too. Go ahead and buy it. I bet you will start viewing human behaviour with a different lens.
Another book I would recommend: The Honest Truth About Dishonesty
And here is Rory Sutherland building the case for magic.
Love to know what you think of the idea of solving problems with Psycho-Logic… leave a comment below
