Strategy. Innovation. Brand.
Innovation and Bananas
Start from the top.
We’ve all heard the admonition, “If it ain’t broke don’t fix it.” We often take it at face value – if something is working, don’t make changes. On the other hand, we usually roll our eyes when a colleague justifies a process by saying, “Well, we’ve always done it that way.”
So which is it? Should you accept a process simply because it’s traditional? Should you assume that it doesn’t need attention? If your business processes are working reasonably well, should you never review them? Should you never seek to improve a process that’s fulfilling its basic objective? Is it OK to accept that we’ve always done it that way?
When I think about these questions, I think about bananas. I’ve always peeled bananas from the stem. It works reasonably well most of the time. But occasionally the stem breaks off awkwardly and mashes the end of the banana. I’ve also noticed recently that snapping the stem can aggravate the arthritis in my thumbs. But, hey – it’s not a big deal. I’ve always done it that way. Why would I change something that’s not broken?
Then I learned that monkeys peel a banana from the opposite end. This is actually the top since bananas grow “upside down”. You simply pinch the top and the peel separates; then you pull it back. It’s simple, easy to do, essentially foolproof, and it doesn’t hurt arthritic thumbs. (Here’s an illustrated guide).
Now I peel bananas from the top rather than from the bottom. Each time I do, I think about innovation. It’s a simple thought – I should ask more questions about how I do things. Why do we things the way we do? It’s a simple process – we just observe and question. It’s so simple, in fact, that we can learn it from monkeys.
How To Kill The Lottery
Great idea!
I’ve reached the conclusion that Americans actually enjoy paying taxes. While that may seem counter-intuitive, I see it happen every time I gas up my car. In the gas station, I usually see at least two or three people (often many more) lined up to pay their taxes. They don’t seem grumpy like they do at the DMV. Rather, they seem eager to plunk down their money to help support the American way of life.
It’s the lottery, of course. Or rather, the lotteries. I’ve just read (in The Atlantic) that Americans spent $70.1 billion on state and regional lotteries in fiscal year 2014. By comparison, we spent roughly $30 billion on the federal gasoline tax, $17.8 billion on sports tickets, $14.6 billion on books, and $13.1 billion on video games. (I was pleasantly surprised to learn that we spent more on books than video games).
On a per capita basis, we spent $280 per person on lotteries in 2014. If we exclude children from that number, the figure rises to about $300 per person.
Who is spending that money? Poor people account for a disproportionate share. According to a study by Elizabeth McAuliffe, the poorest third of Americans buy more than half of all lottery tickets. The Washington Post ran the numbers and estimates that “…households making less than $28,000 a year are dishing out $450 a year on lotteries.” In other words, poor people are paying about 50% more than average people.
Lotteries have essentially addicted state and local politicians. People willingly play them, no well-organized lobby opposes them, and they raise oodles of cash with minimal bureaucracy. So, can we ever change this system?
Actually, there may be hope in the form of prize-linked savings accounts (PLSAs). Some smart people asked the question, “Why don’t poor people save more money?” An important part of the answer seems to be that people believe that they’ll never get ahead by putting their money in small savings accounts. By comparison, a lottery offers some hope of getting ahead – not much but more than a small savings account. In other words, it’s a rational choice.
So, why not add lottery-like features to saving accounts? Presto! It’s the PLSA. Like any other savings account, a PLSA offers interest. In a PLSA, however, a good chunk of that interest is swept into a lottery and awarded as prizes. If you win the prize, then bully for you – it’s like winning a lottery. If you don’t win the prize, then you still have the money in your account plus (usually) a small amount of interest. It’s a lottery with virtually no downside.
Does it work? According to Wikipedia, various forms of PLSAs are now available in at least 17 countries. In the United States, Michigan’s Save To Win program enrolled 36 credit unions and gave away prizes based on random drawings. By saving more, participants could increase their chance of winning. A study found that 56% of the participants had been non-savers prior to the program, 39% were considered asset-poor, and 44% had low-to-moderate household incomes. By 2010, participants had opened 16,833 accounts with an average balance of $1,673 or a total of $28.1 million. The program has now spread to Nebraska, North Carolina, and Washington.
Why don’t we have more PLSAs? In some states, it’s against the law – only the state can offer a lottery. In other cases, it’s probably just lack of awareness. If you think it’s a good idea, it’s time to talk it up.
(Though this idea is new to me, it’s not such a new idea. You can find out more about current Save To Win programs here. The Save to Win website is here. Peter Tufano, formerly of Harvard Business School, and now the Dean of the business school at Oxford, has written about it here. Stephen Dubner of Freakonomics fame has written about it here.)
Hate, Happiness, Imagination
Failure of imagination.
In The Power and The Glory, Graham Greene tells the story of a “whisky priest” who tries to keep his ministry alive during the Cristero War in Mexico. After the revolution of 1917, the Mexican government, seeking to suppress the power of the Catholic Church, seized church property, desecrated churches, and forced priests to renounce their vows and even to marry.
In 1926, some 50,000 peasants – many from the state of Tabasco – revolted against the government. They became known as Cristeros because their rallying cry was Viva Cristo Rey! During the war, which lasted until 1929, no Catholic mass was given in Mexico and many priests and nuns were summarily executed.
Against this backdrop, Greene tells a morally ambiguous tale. The whisky priest is no paragon of virtue. The lieutenant who doggedly pursues him is idealistic but violent. The lieutenant hates the church, believing it to be thoroughly corrupt. Does the priest hate the lieutenant? It’s an interesting question that allows Greene to write a brief meditation on the nature of hatred:
When you visualized a man or a woman carefully, you could always begin to feel pity . . . that was a quality God’s image carried with it . . . when you saw the lines at the corners of the eyes, the shape of the mouth, how the hair grew, it was impossible to hate. Hate was just a failure of imagination.
In 2005, David Foster Wallace picked up the same thread in his commencement speech at Kenyon College. Wallace spoke of banal platitudes and the dreary rhythms of daily life. Life, he suggested, is often frustrating, infuriating, irritating, and just plain stupid. We’re surrounded by stupid, cowlike people and deal with petty, frustrating crap, day in and day out.
After painting a dismal picture of daily adult life, Wallace reminds us that that’s not the point. The point is that we get to choose. We can choose how to think and what to pay attention to. Our natural default setting is egotism. It’s all about me. Why are these people in my way?
Or we can imagine. We might imagine that the checkout clerk has a more tedious and painful life than even we do. Or that she’s just done something wonderfully generous and kind for another person. We can imagine that the person driving slowly ahead of us is tired from caring for a sick child. If we can see “the lines at the corners of the eyes”, then we can’t hate. It’s our choice.
I doubt that Greene and Wallace are compared very often in literature classes. But they’re mining exactly the same vein. We need to learn how to think and how to imagine. We don’t have to imagine new products or great art. We simply have to imagine how it is to be another person.
Another great novelist, Saul Bellow, wrote that imagination is “eternal naïveté”. We need to be naïve to imagine what another’s life is like. If we can be eternally naïve, we can stop being angry — at other people and at ourselves. Perhaps we can even be happy. It’s our choice.
(You can find a video of a portion of David Foster Wallace’s commencement speech by clicking here).
Habit Forming, Compulsive Products
Modern slot machines.
Here’s a good business model: create a habit-forming product or service that entices you to behave compulsively. Sex is probably the mother of all such operating models (both literally and figuratively). Other products that use the habituation model include tobacco, illicit drugs, gambling, alcohol, ERP software, and lately … mobile phones.
Here’s the good news: the list of products that are truly habit forming is fairly short. Here’s the bad news: it’s about to get much longer.
Product managers are now studying exactly what it is that makes products compulsive. They’re literally designing compulsion into their products.
We’re familiar with the habituation concept as it’s applied to gambling. Slot machines are no longer just clunky combinations of dials and gears. They’re now highly programmed devices that manage your behavior and entice you to linger longer. They sound like the same old clunky devices to lull you into forgetting who is managing whom.
We understand slot machines and, being the smart people that we are, we’re unlikely to be fooled by them. But what if wily product managers take the same concepts and apply them to, say, the websites you use regularly? Could they manage your behavior in the same way a slot machine does? You bet.
As Technology Review pointed out in a recent article:
Forging new habits has become an obsession among technology companies. In an age when commercial competition is only a clcik away, the new mandate is to make products and services that generate compulsive behvior. … The rise of mobile computing has intensifed that imperative. The small screen crowds out alternatives, focusing a person’s attention on a limited number of go-to apps.
So we can expect more “compulsive products” especially on our hand-held devices. How does compulsion work? According to Nir Eyal, a behavior engineer, it’s a four-step process. Think about your mobile phone.
- Trigger – a trigger prompts you and starts a process. Your phone buzzes in your pocket …
- Action – the buzzing phone causes you to interrupt whatever else you’re doing, take the phone out of your pocket, and look at it.
- Reward – the phone provides rewarding information. You find out that you favorite team won its game or that your boyfriend wants to take you to dinner.
- Investment – you invest yourself in the process by taking a further action, like responding to a message or adding a comment on a social media page. Your investment becomes a trigger from someone else.
All this may sound new and scary but, really, we’ve been preparing ourselves for this brave new world for a long time. When we had but one telephone in our house, my entire family jumped whenever it rang. It was the beginning of a long habituation process.
What to do? First, be aware that behavior engineers are designing experiences that promote compulsive behavior. I now think of my mobile phone as a slot machine in my pocket. Second, set limits on your behavior. When I go to a casino, I set a strict limit on how much I’ll lose. Then I stop. We can do the same with our devices. We can turn them off or set a timer that tells us when to stop.
Finally, we can also create our own, alternative rewards. I know my mobile phone creates compulsive behavior on my part. I check it often. But I’ve also created an alternate reward. When I check my phone, I remind myself to smile for at least ten seconds. Sure, it’s compulsive. But it brightens my day considerably.
What Is Consciousness Good For?
My subconscious is driving the car.
Can you solve a moderately difficult arithmetic problem (say, 3 + 6 – 2 + 5) in your head? Sure, you can. You just need to think about it for a moment.
Could you do the same problem in your head if a researcher were flashing an incredibly annoying bright light in your eye? The light is so bright and flashes so quickly that it’s impossible to focus your attention. Yet, you can still solve the problem. How can that be?
The short answer is that your subconscious (aka System 1 in this website) does the work. It can process arithmetic problems or word puzzles that you’re not consciously aware of.
Professors from the Hebrew University in Jerusalem figured this out with an ingenious experiment. They presented the bright flashing light to one eye and arithmetic or word problems to the other eye. The light was so distracting that subjects didn’t realize that a problem was entering their brain. Yet, they were able to solve it just fine, without realizing that they were doing so. (Here’s the original research article; here’s a less technical summary from the BBC).
The subjects weren’t able to “think about it for a moment”. They couldn’t engage their conscious (System 2) thinking. So, how did they do it? It had to be their subconscious, or System 1.
This finding starts to challenge our long-held beliefs about the differences between our conscious and subconscious processes. We believed that certain skills – like arithmetic and word puzzles – require higher order processing. We need to engage System 2 and focus our attention. But this experiment, and many others like it, demonstrates that System 1 can do a lot more than we expected on its own. (For another example of how your brain can absorb information subconsciously, click here).
Ran Hassin, one of the authors of the flashing light study, went on to create a “Yes It Can” (YIC) model of the subconscious. Hassin asks the simple question, “Which high level cognitive functions can the unconscious perform, and which are uniquely conscious?” After reviewing numerous experiments, he argues, “…that unconscious processes can perform the same fundamental, high-level functions that conscious processes can perform.” (Click here for the article).
Let’s assume for a moment that Hassin is right – our subconscious mind can perform essentially the same functions as our conscious mind. Why, then, do we need consciousness?
Hassin points out that, “Good sprint runners can run 100 meters in less than ten seconds, but more often than not they choose not to.” Similarly, we might be able to use our subconscious for many tasks but – for one reason or another – we choose not to.
When I learned to drive, for instance, I was very conscious of the car itself, the dials on the dashboard, speed, road conditions, and so on. Today, driving is second nature to me. I can drive for miles without being consciously aware of it. It’s often called highway hypnosis.
My subconscious drives the car just fine until something out of the ordinary happens. When something novel (and perhaps dangerous) occurs, I instantly revert to conscious mode. According to Hassin’s argument, my subconscious might be able to handle the novel situation on its own. But, for one reason or another, my conscious mind can handle it better.
Perhaps the main role of consciousness, then, is to practice and master novel skills or to react to novel situations. As our skills improve, our subconscious takes over much of the task. Our conscious mind can move on to new things.
Perhaps our conscious mind continually hungers for novelty. We get bored when there is nothing new for our consciousness to work on. This could even explain the hedonic treadmill. New things engage us and make us happy. Old things fade into the (subconscious) wallpaper.
Consciousness, then, may be a fundamental force driving us toward creativity and innovation. Seen in this light, creativity is not simply a “good thing.” Rather it’s a “necessary thing.” We should pay more attention.
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