Anand Damani – Page 9 – Behavioural Design

When should you admit that you are wrong?

Published February 15, 2016 by Anand Damani

Imagine you are the Marketing Director of one of the reputed airlines and your airline has frustrated hundreds of passengers due to lack of preparation and poor decision-making in the face of severe winter weather. All other airlines cancelled flights in anticipation of severe weather and returned to normal service within few days. In contrast the airline that you are the Marketing Director of, gave hope to passengers that the planes would fly – yet remained out of service for many days. In short your airline let customers down. Would you focus the blame on external weather conditions or on internal factors relevant to the company’s operation?

If you chose external weather conditions, you should leave your job and join an airline like Air India. You will probably find a lot of like-minded people there. Or may be the organization you work with is like Air India and would not support your decision. But if you chose to focus on internal factors relevant to the company’s operations, consider yourself a brave person, with a good sense of humility, to have admitted one’s mistake. Indeed a very rare thing amongst people and organizations. And if you would have chosen to acknowledge internal factors, not only would it benefit your organization, it would benefit your career too. Let me tell you why.

Says behavioural scientist Fiona Lee and her colleagues say that “Organizations that attribute failures to internal causes make it appear as having greater control over its own resources and future. The public might assume that the organization has a plan to modify the internal features of the organization that may have led to the problems in the first place.”

Lee and colleagues have tested this idea by conducting a study in which participants read one of the two annual reports of a fictitious company, both of which explained why the company performed poorly over the last year. For half of the participants, the annual report blamed internal (but potentially controllable) factors for the poor performance and for the other half, the annual report blamed external (and incontrollable) factors for the poor performance. Turned out that the first group viewed the company more positively on a number of different dimensions than did the second group.

Not just that, the researchers collected statements from actual annual reports of 14 companies over a 21-year period and discovered that companies that pointed to internal factors to explain failures had higher stock prices one year later than those that pointed to external factors.

Organizations that attribute failures to internal causes come out ahead not only in public perception, but also in terms of profit line. No reason to believe why it should not work for individuals. So next time you make a mistake, admit it and follow it up with an action plan demonstrating that you can take control of the situation and rectify it.

Source: Lee, F., & Peterson, C., & Tiedens, L. – Mea culpa: Predicting stock prices from organizational attributions – Personality and Social Psychology Bulletin 30(12): 1-14 (2004)

Mirroring others behaviour can get you likes

Published January 19, 2016 by Anand Damani

Often during a meeting or a negotiation we subconsciously mirror our colleagues’ or negotiators’ posture. The typical response is to change our posture, as if there were something wrong with being influenced by the other. However the following research suggests the exact opposite: Mirroring behaviour results in better outcomes for both.

Researcher William Maddux and colleagues conducted an experiment wherein MBA students were instructed to subtly mirror their partner during negotiation (e.g. lean back if the other person does) or not asked to mirror their partner. When one party was instructed to mirror the other, the two parties reached a deal 67% of the time. When they weren’t told to mirror the other, the parties reached a deal only 12.5% of the time.

Based on additional data from the research, they concluded that mirroring behaviour led to increased trust, and that increased trust typically led one negotiator to feel comfortable disclosing details that were ultimately necessary to break a stalemate and create a win-win situation for both parties.

Another research by Rick van Baaren and colleagues found that waiters at a restaurant increased their tip size by nearly 70% simply by matching their customers’ verbalizations, repeating back word for word the customer’s order, as opposed to saying “okay” or merely nodding.

Social psychologists Tanya Chartrand and John Barg say that matching behaviour of others creates feelings of liking and strengthens bonds between two people. It makes us say “yes” and do nice things for people we like.

At the same time, you don’t want your interaction to come across as mocking the other person. So the key is subtlety.

Sources: William Maddux, Elizabeth Mullen and Adam Galinsky – Chameleons bake bigger pies and take bigger pieces: Strategic behavioral mimicry facilitates negotiations outcomes – Journal of Experimental Social Psychology 44, no. 2: 461-68 (March 2008)

Rick van Baaren, Rob Holland, Brejge Steenart, Ad van Knippenberg – Mimicry for money: Behavioral consequences of Imitation – Journal of Experimental Social Psychology 39, no. 4:393-98 (July 2003)

Tanya Chatrand and John Bargh – The chameleon effect: The perception-behavior link and social interaction – Journal of Personality and Social Psychology 76, no. 6: 893-910 (June 1999)

Organizations have bad habits too (and they can be changed)

Published December 1, 2015 by Anand Damani

“Individuals have habits; groups have routines. Routines are the organizational analogue of habits”, wrote Geoffrey Hodgson, who spent a career examining organizational patterns. And as we know habits can be good or bad. Not just that, they can be dangerous, because while performing routines, employees yield decision-making to a process that occurs without actually thinking, automatically – habit.

Paul O’Neill who is known to have turned around the fortunes of a company called Alcoa – Aluminum Company of America understood this really well. Alcoa was going through troubled times when it hired Paul O’Neill as CEO. Investors, executives and workers were unhappy. Quality was suffering. And competitors were stealing customers and profits.

O’Neill believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization. These are keystone habits. The habits that matter the most. These are the ones that, when they start to shift, dislodge and remake other patterns.

So O’Neill figured he needed a focus that everybody – unions and executives – could agree as being important, so that he could bring people together. He said, “So I thought everyone deserves to leave work as safely as they arrive, right? You shouldn’t be scared that feeding your family is going to kill you. That’s why I decided to focus on: changing everyone’s safety habits.” So he made SAFETY his top priority and set an audacious goal for a manufacturing company of that size: zero injuries.

The approach was brilliant because unions had been fighting for safety rules for years. And managers were happy since injuries meant low productivity and low morale. What most people didn’t realize was that O’Neill’s plan for getting zero injuries entailed the most radical realignment in Alcoa’s history.

According to O’Neill’s safety plan, any time someone was injured, the unit president had to report it to him within 24 hours and present a plan for making sure the injury never happened again. The reward: people who got promoted, were those who embraced and cracked this system.

If unit presidents had to contact O’Neill within 24 hours with a plan, they needed to hear about the accident from their vice presidents as soon as it happened. So vice presidents had to be in constant communication with floor managers, who in turn needed to get workers to raise warnings as soon as they saw the problem. Meanwhile in those 24 hours everyone in the chain had to generate a list of suggestions for their immediate superior, so that there was an idea box full of possibilities for the unit president to choose from. This changed the company’s rigid hierarchy as communication had to make it easy for the lowliest worker to get an idea to the loftiest executive, as fast as possible.

As Alcoa’s safety patterns shifted, productivity skyrocketed, quality improved, costs came down and autonomy improved. If molten metal was injuring workers when it splashed, then the pouring system was redesigned, which led to fewer injuries. It also saved money because Alcoa lost less raw materials in spills. If a machine kept breaking down, it was replaced, which meant there was less risk of broken gear snagging an employees arm. It also meant higher quality products because, as Alcoa discovered, equipment malfunctions were a chief cause of subpar aluminum.

By the time O’Neill retired after 13 years, Alcoa’s annual income was five times larger than before he arrived. Its market capitalization had risen by $27 billion. Alcoa became one of the safest companies in the world – the keystone habit that changed it all.

Source: The Power of Habit by Charles Duhigg

Stop planning. Start testing.

Published October 26, 2015 by Anand Damani

Corporate organizations have a habit of planning, strategizing, forecasting, debating extensively before moving ahead on projects. Entrepreneurs on the other hand care little about market research and more about testing the idea. Corporate executives want to predict the future and control it. Entrepreneurs favor testing. An entrepreneur once said, “Instead of asking all the questions, I’d try and make some sales.”

That’s exactly what Bill Gross did. Bill Gross started Idealab in 1996. Idealab has prototyped and tested hundreds of ideas, and from those, has formed and operated more than 125 companies.

Carsdirect.com was one of ideas that he wanted to roll out in late 90s – early 2000. He was excited about selling cars directly to consumers online in the US. As he envisioned it, customers could search quickly for the exact car they wanted and have it delivered right to their door. He could offer discounted price online, because he wouldn’t have to maintain an expensive car lot filled with inventory, but even a discounted car is still a huge purchase to conduct online. Would people spend so much money online on a car?

He believed the idea could work but it was risky. So he hired Andy Zimmerman and gave him a mission – sell one car online. They put up a website with couple of pages that looked like it would allow you to order a car. But actually the message went to a clerk who looked up the price and sent it back to the user. The next morning Bill discovered we had sold three cars. They had to quickly shut down the site because they were offering a heavy discount.

So rather than debating about the plan and the uncertainty, they simply tested it. Within three years Carsdirect.com became the largest auto dealer in US.

By making decisions through experimentation, the best idea can prove itself. Does your company promote this kind of experimentation?

Haath laga ke dekh (Try touching me)

Published March 29, 2016September 25, 2015 by Anand Damani

Hello from New York. We’re here to attend MakerCon and MakerFaire and meet interesting people like authors, professors, makers, inventors, innovators, chip designers, product designers, design thinkers and of course behavioural scientists. More on that later.

Continuing with the blogpost, translated in English ‘Haath laga ke dekh’ means ‘Try touching me’, used here in a challenging tone and manner. You’ll hear a lot of it at crowded places like railway stations, bus stops, inside trains and buses where people jostle for space and there’s an invariable brushing of elbows and shoulders. Leading to mock fights of the ‘Hungama’ Bollywood movie-type, where men challenge one another saying ‘Haath laga ke dekh’.

But in this post we’ll be focusing on the positive aspect of touching. How and why touching can sub-consciously lead to positive outcomes. By touching we mean, a gentle brief touch to the forearm, for example, not the touchy-feely kinds.

In the study ‘The Effect of Touch on Women’s Behaviour’ by N. Gueguen, French men randomly approached 240 young women by saying, “Hello. My name is Antoine. I just want to say that I think you’re really pretty – I need to go to work now – but if you’d give me your number – I’ll call you later – and we could have a drink together someplace.” If the women refused, they’d say, “Its not my day. Have a good evening.” If they got her number, they’d tell her it was just a study, and the women would laugh. With half the women, the young men added a light one-second touch to the woman’s forearm. The other half were not touched. I know what you are thinking – what would happen if it were India? But stay with me on this one. I’ll give you other examples to illustrate the point too.

Outcome: When the young men didn’t touch, their success rate was 10% and when they touched, it was 20%. Why did it happen? Women didn’t think like Antoine is such a good toucher. It happened because on a sub-conscious level, touch imparts a subliminal sense of caring and connection. Social neuroscientist pioneer Ralph Adolphs says that nerve fibers especially in the face and arm are directly connected to areas of the brain such as the insular cortex, which is associated with emotion.

Subtle touching, like briefly on the arm, has provided a positive outcome in many researches and experiments – from increasing tips for servers in restaurants and bars, to the servers suggestion to order a particular dish being accepted more often, to the increase in percentage of shoppers in a supermarket purchasing the food they sampled, to the proportion of shoppers in a mall willing to answer a survey, to a 2010 study of Basketball in Berkeley that found that the number of high fives, chest bumps, hugs, etc. correlated significantly with the degree of cooperation among teammates and wins.

Haath laga ke dekh. Try touching, this time used in a persuasive manner 🙂

Why focus groups cannot be relied upon

Published September 2, 2015 by Anand Damani

Marketers rely a lot on traditional research like focus groups to understand consumer’s motivations toward their brand, product and category. Researchers ask people for their opinion about their product, packaging or concepts to pick insights about their appeal, and get wonderful feedback that is sincere, detailed, and emphatic but has little relation to the truth.

Imagine you’re coming back from a party that was at a lavish penthouse of an industrialist. You say you had a lovely time and I ask you what you liked about it. You say “the drinks”. But did your joy really come from talking to the attractive woman who wrote the latest fictional best seller? Or was it something you really relished like the food? Or was it something subtler, like the quality of the music? Or the scent of citrus that filled the house? Or was it the fact that you got to network with influential people?

Leonard Mlodinow, author of many books including ‘Subliminal’ says, when we come up with an explanation for our feelings and behaviour, our brain searches our mental database of cultural norms and picks something plausible. In the above case, your brain might have asked ‘Why do people enjoy parties?’ and chosen ‘the drinks’ as the most likely hypothesis, if ‘drinks’ happen to conform to a set of standard reasons, expectations, cultural and societal explanations for a given preference.

In a study mentioned in ‘Subliminal’, women were shown four pairs of silk stockings that were absolutely identical, except that each had a different and very faint scent applied to it. The women were asked to choose their favourite and they found no difficulty in telling why one pair was better than the other. They spoke of perceived differences in texture, weave, feel, sheen and weight. Everything but the scent. In reality, stockings with one particular scent were rated the highest, much more often than the others, but the women denied using scent as a criterion. In fact only 6 out of the 250 women even noticed that the stockings had been perfumed.

Truth is we most often don’t understand our own preferences. Despite that, we usually think that we do. And when asked to explain why we feel a certain way, most of us, after giving it some thought, have no trouble supplying many reasons that sound plausible.

It’s a market researchers nightmare – you can’t even trust people to know what they prefer, leave alone why. That’s why we rely on the knowledge of the human brain, human physiology, cognitive neuroscience, behavioural economics and proven experiments conducted by the best in the world to understand human behaviour and create Behavioural Design solutions.

Why 99% of Austrians donate their organs

Published August 11, 2015 by Anand Damani

Eric Johnson and Dan Goldstein conducted an interesting online experiment in 2003, asking people whether they would be willing donors. Some people were told that the default was not to be an organ donor, and they were given the option of confirming or changing the default status. Others were told that the default was to be an organ donor, and again, they were given the option of confirming or changing the default status. When participants had to opt in to being an organ donor, only 42% did so. But when they had to opt out, 82% agreed to be donors.

To get a sense of the power of the default rule, consider the difference in organ donation rates between two similar European countries, Germany and Austria. In Germany, which uses an opt-in system, only 12% of citizens gave consent, whereas in Austria which uses an opt-out system, nearly everyone (99%) did.

Of course a successful organ donation program needs the infrastructure of the medical system in matching donors with recipients, transporting organs and performing successful transplants. But keeping everything constant, default option still plays a major role in increasing the donation rate.

In some countries like France, though the default rule is to be a donor, doctors still ask the family members for permission. Even then the default rule matters. As Childress and Liverman put it, “The next of kin can be approached quite differently when the decedent’s silence is presumed to indicate a decision to donate, rather than when it is presumed to indicate a decision not to donate.”

How many of you have changed the default settings of your mobiles? This power can be harnessed to change behaviour. Setting default options can have huge effects on the outcomes, from increasing organ donations to increasing personal savings to making better investments. Never under-estimate the power of inertia.

Sources: Eric J. Johnson & Daniel G. Goldstein – Do Defaults Save Lives? Science, Vol. 302, pp. 1338-1339 (2003)

Alberto Abadie & Sebastien Gay – The Impact of Presumed Consent Legislation on Cadaveric Organ Donation: A Cross Country Study – Journal of Health Economics 25, 599–620 (2006)

Smoking – the toughest habit can be broken

Published July 14, 2015July 14, 2015 by Anand Damani

We’re non-smokers, but we empathize with those who want to quit after years of smoking. It’s not easy. People try lots of things to quit smoking – nicotine patches, cold turkey, replacing the cigarette with something to keep them busy, avoiding the spots where smokers congregate, making new year resolutions, promising their kids/wives/girlfriends, what not. Few succeed, most fail.

We’ve chanced upon something that has proved to be more successful than any other way to quit smoking. CARES – Committed Action to Reduce and End Smoking – is a savings program offered by the Green Bank of Caraga in Mindanao, Philippines. Here’s how the savings program works. The smoker opens an account with a minimum balance of $1. For 6 months, the smoker deposits the amount of money he (includes ‘she’) would otherwise spend on cigarettes into the account. After 6 months, the client takes a urine test to confirm that he has not smoked. If he passes the test, he gets his money back. If he fails the test, the account is closed and the money is donated to charity.

Results of this program have been evaluated by MIT’s Poverty Action Lab and look better than other anti-smoking tactics. Opening an account makes those who want to quit 53% more likely to achieve their goal. In a study done by Xavier Gine, Dean Karlan and Jonathan Zinman, those who were offered CARES, including those who turned it down, were about 45% more likely to pass the nicotine test than the control group. Would smokers relapse once the 6 months were over and the pressure was off? After another six months of the 6-month program, researchers found that customers who took up CARES and even those who were offered but didn’t enroll, did markedly better than the control group.

If you wish to quit smoking in the same manner by depositing money with us, email us at anand@brief-case.co Seriously, no kidding. We’ll do a test after around 6 months. We can agree to donate to a charity you don’t like. So that adds to your motivation to quit. And, if you want to commit to any other self-improvement, we’re open provided it can be verified whether you have achieved it or not.

Source: Xavier Gine, Dean Karlan, Jonathan Zinman – Put your money where your butt is: A commitment contract for smoking cessation – American Economic Journal: Applied Economics 2(4):1-26 (2010)

Small ideas make a big difference

Published May 5, 2015 by Anand Damani

There are lots of small everyday things that could benefit from being designed better. Things we take for granted in everyday life. But when designed well, things just work, leading to enhanced experience, satisfied customers, appropriate actionability, increased sales, etc. This post is about few of such small everyday ideas.

Like handles on doors. If there is a handle on the door, the tendency is to pull it. But almost all doors have a handle on the side it says push, too. If the door needs to be pushed, why have a handle? Simply keep it flat and we’ll push it.

When composing emails, wish there was a reminder to attach our files, when words like ‘attached’ or ‘attachment’ were found in the composed email.

‘No Parking on Odd dates 1 3 5’ and ‘No Parking on Even dates 2 4 6’ tend to be so cumbersome. We need to first think about what date it is today, then figure that its ‘No Parking’ on that side, which means we can park on the opposite side. Instead what if we had ‘Parking on Odd dates only’ and ‘Parking on Even dates only’.

Because there are two traffic signals in view at all times, one after the zebra crossing and one much ahead on the other side of the junction, we Indians always push ahead wanting to be first (in whichever race that is) therefore not stopping at the zebra crossing and not allowing pedestrians to cross. So to get cars to stop at the zebra crossing, only one traffic signal needs to be there, placed just before the stripes begin.

Instead of having to choose from financial retirement plans with complicated numbers, what if we could choose, by looking at pictures of different homes (1, 2, 3, 4 BHK) that could be bought with different levels of retirement income.

I often get asked about what mega-pixel camera on the phone is good. Fact is that we don’t understand what mega-pixels mean. What will be useful to us is the information of what mega-pixel matched what size of print. But we know this one won’t happen, else phone and camera manufacturers won’t be able to convince us to mindlessly upgrade.

Remember using the plastic card key in your hotel room to start and switch off the power. Wouldn’t it be convenient to have one in our home, so that we could start/switch off the power with one stroke and do away with the nagging feeling of not having turned off the geyser or gas or some other appliance after leaving home?

The tendency is to think of these design ideas as small (insignificant) ideas, but they are the ones that make for the most awesome product, service experiences and of course get us to behave.

The way a restaurant bill gets split affects what’s ordered

Published March 31, 2015March 31, 2015 by Anand Damani

How do you split the bill while eating out at a restaurant with friends? Equally? Or depending on whose had what?

In Germany diners usually figure out the price of their individual bills and no one feels bothered. But in Israel or US or India for that matter, such behaviour may be considered rude. Irrespective, the interesting part is how splitting the bill affects ordering behaviour.

Behavioural economist Uri Gneezy and colleagues divided students who didn’t know each other, into 3 groups of diners, based on how they paid the bill. In the first group, six diners (three men and three women) paid individually. In the second, they split the bill evenly. In the third, the researchers paid for the whole meal.

Turns out, the way you split the bill affects what you order. Of course people ate the most when the researchers paid. But when it came to the equal bill-splitting group, people tended to order more expensive items, than they did when each person paid for his or her own meal. Because for every rupee/dollar they ordered, they had to pay only one-sixth of the cost. So why not order the most expensive dishes? It’s about the incentives, not about individual personalities.

Uri Gneezy, says, “This is an example of negative externality – someone else’s behaviour affects your well-being. Let’s say you are a non-smoker, and a smoker sitting next to you decides to light up. He enjoys his cigarette, but you are also ‘consuming’ his smoke. The guy smoking has bestowed a negative externality on you. The party consuming the goods is not paying all of its cost. In the bill-splitting situation, the person enjoying the large, expensive lunch is doing the same thing. People simply react to the incentives they are facing.”

Source: Uri Gneezy, Ernan Haruvy and Hadas Yafe – The inefficiency of splitting the bill – Economic Journal 114, no. 495: 265-280 (April 2004)

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