Author: David Greenwood

💎 Our tendency to underestimate the variance – or noise – in business

In a well-run insurance company, if you randomly selected two qualified underwriters or claims adjusters, how different would you expect their estimates for the same case to be? Specifically, what would be the difference between the two estimates, as a percentage of their average?

We asked numerous executives in the company for their answers, and in subsequent years, we have obtained estimates from a wide variety of people in different professions. Surprisingly, one answer is clearly more popular than all others. Most executives of the insur­ance company guessed 10% or less.  When we asked 828 CEOs and senior executives from a variety of industries how much variation they expected to find in similar expert judgments, 10% was also the median answer and the most frequent one (the second most popular was 15%). A 10% difference would mean, for instance, that one of the two underwriters set a premium of $9,500 while the other quoted $10,500. Not a negligible difference, but one that an organization can be expected to tolerate.

Our noise audit found much greater differences. By our measure. the median difference in underwriting was 55%, about five times as large as was expected by most people, including the company’s executives.

Excerpt from: Noise: A flaw in human judgement by Daniel Kahneman, Olivier Sibony and Cass R. Sunstein

💎 The four steps that lead to the quantification fallacy

The first step is to measure whatever can be easily measured. This is okay as far as it goes. The second step is to disregard that which can’t be easily measured, or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can’t be measured easily really isn’t important. This is blindness. The fourth step is to say that what can’t be easily measured really doesn’t exist. This is suicide.

Excerpt from: Tarzan Economics: Eight Principles for Pivoting through Disruption by Will Page

💎 Putting safety before profit

the largest impact-would come not from Detroit but from Sweden. In the mid-fifties, Volvo hired an aeronautical engineer named Nils Bohlin, who had been working on emergency ejection seats at Saab’s aerospace division. Bohlin began tinkering with a piece of equipment that had been largely an oversight in most auto­mobiles up until that point: the seat belt. Many cars were sold with­ out any seat belts at all; the models that did include them offered poorly designed lap belts that offered minimal protection in the event of a crash. They were rarely worn, even by children.

Borrowing from the approach to safety restraint used by military pilots, Bohlin quickly developed what he called a three-point de­sign. The belt had to absorb g-forces on both the chest and the pelvis, minimizing soft tissue stress under impact, but at the same time it had to be simple to snap on, easy enough that a child could master it. Bohlin’s design brought together a shoulder and lap belt that buckled together in a V formation at the passenger’s side, which meant the buckle itself wouldn’t cause injuries in a collision. It was an elegant design, the basis for the seat belts that now come standard on every car manufactured anywhere in the world. An early prototype of the shoulder strap had decapitated a few crash dummies, which led to a rumor that the seat belt itself could kill you in a crash. To combat those rumors, Volvo actually hired a race-car driver to perform death-defying stunts-deliberately rolling his car at high speeds-all the time wearing Nils Bohlin’s three-point seat belt to stay safe,

By 1959, Volvo was selling cars with the three-point seat belt as a standard feature. Early data suggested that this-one addition was single-handedly reducing auto fatalities by 75 percent. Three years later, Bohlin was granted patent number US3043625A by the US Patent and Trademark Office for a “Three-point seat belt systems comprising two side lower and one side upper anchoring devices.” Recognizing the wider humanitarian benefits of the technology, Volvo chose not to enforce the patent-making Bohlin’s design freely available to all car manufacturers worldwide. The ultimate effect of Bohlin’s design was staggering. More than one million lives-many of them young ones-have been saved by the three-point seat belt. A few decades after it was awarded, the Bohlin Patent was recognized as one of the eight patents to have had “the greatest significance for the humanity” over the preceding century.

Excerpt from: Extra Life: A Short History of Living Longer by Steven Johnson

💎 People acclimatise to greater wealth meaning enough is never enough

A team led by psychologist Professor Michael Norton contacted over two thousand people whose net worth started at one million dollars and rose to an awful lot more. They were asked to rate their happiness on a ten-point scale, then say how much cash they’d need to be perfectly happy. ‘All the way up the income-wealth spectrum,’ Norton reported, ‘basically everyone says two or three times as much.’

Excerpt from: The Status Game: On Social Position and How We Use It by Will Storr

💎 The power of reframing costs in a B2B context

In the same way, in the early stages of a food delivery brand (now worth over £1bn), the proposal was to pay the restaurant directly for each meal it supplied and then to invoice them monthly for the commission on the month’s past sales. A marketing thinker pointed out that this was a mistake. “We should keep the money from each meal sold, deduct commission, and then send them a payment every month”. He or she understood that, if the restaurant saw the new business as a source of incremental revenue they would value it; if they saw it primarily as a cost, they would look for ways to avoid it. Again, in economic terms, there is no difference between the first proposal and the second, but the psychological effect on the business will be dramatically different.

Excerpt from: The Objectivity Trap by Rory Sutherland

💎 Even short breaks can disrupt habits

Recent research suggests that anything more than a short lapse in a behavior we hope to make habitual (say, multiple missed visits to the gym rather than just one) can be costly. Seinfeld’s mantra “Don’t break the streak” is astute. It also helps explain the logic behind twenty-eight-pill packages of birth control. Scientifi­cally speaking, the pills are necessary only on the first twenty-one days of a twenty-eight-day menstrual cycle. However, most birth control packages include seven sugar pills along with twenty-one hormone pills to ensure that people on birth control won’t fall out of the bit.

Excerpt from: How to Change: The Science of Getting from Where You Are to Where You Want to Be by Katy Milkman

💎 How attempting to multitask damages our attention 100 things

Many times, we think we are multitasking well and we aren’t. A study by Ira Hyman (2009) showed that people walking while talking on cell phones ran into people (literally) more often, and were less likely to notice what was around them than people who were not talking on cell phones. The researchers had someone in a clown suit ride by on a unicycle. The people talking on a cell phone were much less likely to notice or remember the clown than those who were not multitasking,

Excerpt from: 100 Things Every Designer Needs to Know About People (Voices That Matter) by Susan Weinschenk

💎 How Noma surprise diners and create a peak moment

4.5.3 Camouflage

“Your first two courses are already on the table.” Yes, that’s what the diners are told by the waiter at Noma after being seated. This all seems very strange however, as there is nothing on the table. Well, nothing that is other than a collection of plant pots in the center (the clue being the fact that there are exactly as many flowerpots as there are diners at the table). The diner is expected to bring the pot closer and then to start digging with nothing else but their hands into the ‘soil’, eating everything they find, including the roots! This starter, camouflaged as it is in a terracotta flower pot, consists of carrots and radishes planted in a dark brown, crunchy edible mixture of malt and hazel· nut flour (which gives a pretty good visual impression of soil) and a greenish yoghurt-based sauce lying at the very bottom (see Figure 4.9a). As a friend who was lucky enough to try this dish put it: “The crunch malt crumble hit the palate followed by the creamy dip and the spicy and fresh crunchy radish. It was a good harvest.” This dish, in the way that it is presented and in the given hidden conceptual incongruity as we’ll discuss in Chapter 7.

Excerpt from: The Perfect Meal: The Multisensory Science of Food and Dining by Betina Piqueras-Fiszman, Charles Spence and Heston Blumenthal

💎 How saying it strange can make it more memorable

Say it strange

Why did Apple say ‘Think different’ and not ‘Think differently’? Why did they follow this with ‘The funniest iPod ever’ rather than something like ‘The most enjoyable iPod we’ve ever made’? Why does Aleksandr the meerkat – spokes animal for price-comparison website comparethemarket.com – say ‘Simples’ and not ‘Simple’? Why did 7UP promote itself as ‘The Uncola’? Why did Budweiser decide ‘Whasssup”’ was the perfect way to build their brand? We’ll tell you why: they’re all examples of a linguistic quirk used to create a mighty meme. By twisting language just, a little they achieved maximum memorability. It’s a powerful technique but be warned, it’s easy to get wrong.

Excerpt from: Read Me: 10 Lessons for Writing Great Copy by Roger Horberry and Gyles Lingwood

💎 On the power of a deadline

Prospective borrowers must complete a lengthy online application to be considered for a loan. Many of them begin the application but don’t finish it. Kiva enlisted the Common Cents Lab, a behavioral research laboratory, to come up with a solution.

Their suggestion: Impose an ending. Give people a specific deadline a few weeks away for completing the application. On one level, this idea seems idiotic. A deadline surely means that some people won’t finish the application in time and therefore will be disqualified for the loan. But Kiva found that when it sent applicants a reminder message with a deadline, compared with a reminder message without a deadline, 24 percent more borrowers completed the application.” Likewise, in other studies, people given a hard deadline—-a date and time—are more likely to sign up to be organ donors than those for whom the choice is open-ended.

Excerpt from: When: The Scientific Secrets of Perfect Timing by Daniel Pink

💎 The full text of the 1996 Apple Think Different ad

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them.

But the only thing you can’t do is ignore them. Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward. Maybe they have to be crazy.

How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that’s never been written? Or gaze at a red planet and see a laboratory on wheels? We make tools for these kinds of people.

While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

Excerpt from: Actionable Gamification: Beyond Points, Badges and Leaderboards by Yu-kai Chou

💎 On the importance of updating our beliefs when presented with new information

My colleague Phil Tetlock finds that forecasting skill is less a matter of what we know than of how we think. When he and his collaborators studied a host of factors that predict excellence in forecasting, grit and ambition didn’t rise to the top. Neither did intelligence, which came in second. There was another factor that had roughly triple the predictive power of brainpower.

The single most important driver of forecasters’ success was how often they updated their beliefs. The best forecasters went through more rethinking cycles. They had the confident humility to doubt their judgments and the curiosity to discover new information that led them to revise their predictions.

Excerpt from: Think Again: The Power of Knowing What You Don’t Know by Adam Grant

💎 The prospect of parenthood makes people more law-abiding

Using data on more than 1m babies born in Washington state between 1996 and 2009, and records of thousands of crimes committed there between 1992 and 2015, the authors find that when women become pregnant, they are much less likely to be arrested, for a wide range of crimes. The effective most marked for “economic” crimes, such as theft and burglary, but is also true of assaults, vandalism, and alcohol and drug offences. Arrest rates fall by 50%, almost as soon as women become pregnant and fall much further as the pregnancy goes on. Although they bounce back somewhat after childbirth, arrest rates stabilize at about half pre­ pregnancy levels.

More surprisingly, the same pattern holds for fathers. Men are much likelier than women to commit crimes of all sorts in the first place, and the decline in some types of crime is less dramatic for dads than for mums. But arrest rates drop by around 15% once their partners become pregnant, and stay around this mark even after birth. In a blog post commenting on the paper, Alexander Tabarrok of George Mason University described the effect as “astoundingly large”. A study by Mr. Tabarrok published in 2007 concluded that the threat of an additional 20 years of prison made criminals 17% less likely to reoffend; the prospect of fatherhood, it seems, is more salutary than that of two decades of incarceration.

Excerpt from: Unconventional Wisdom: Adventures in the Surprisingly True by Tom Standage

💎 On how humour boosts trust

In one study, researchers Alan Gray, Brian Parkinson, and Robin Dunbar had pairs of strangers sit together for five minutes and watch a movie clip. Half watched a blooper reel from a popular TV comedy—one that had been pretested to get lots of laughs. The rest watched an emotionally neutral clip—think a nature channel documentary, or the lesser-known “Fifty Shades of Grayscale.”

When researchers asked participants to write a message to the person they had just met, the pairs who had watched the blooper clip disclosed significantly more personal information. And when a panel of observers watched these pairs converse, they rated their reactions between the blooper clip pairs as 30 percent more intimate than the ones between the pairs who had watched the neutral clip.

Excerpt from: Humour, Seriously: Why Humour Is A Superpower At Work And In Life by Jennifer Aaker and Naomi Bagdonas

💎 Three rules for writing (do you know them?)

I suppose if I had to pick a favorite rule, I would paraphrase a man with a particular genius for scattering the alphabet on the page, W Somerset Maugham: there are three rules for copywriting. Unfortunately, no one knows what they are.

Excerpt from: Copywriting Is…: 30-or-so Thoughts on Thinking like a Copywriter by Andrew Boulton

 

💎 On steering clear of the thesaurus when writing copy (simplicity)

Likewise, Roddy Doyle’s quip about keeping your thesaurus in a shed or behind the fridge – ‘somewhere that demands travel or effort’ – is a handsome piece of copywriting advice. Doyle’s belief that the word you think of first is most often the best is reinforced by the kind of anxious copy that reads as if every word has been ground through the synonym sausage machine.

Excerpt from: Copywriting Is…: 30-or-so Thoughts on Thinking like a Copywriter by Andrew Boulton

💎 On strategic padding to set expectations

researchers at the Kellogg School of Business. The researchers found that published flight times had increased over 8 percent in the past twenty years. But this increase was due not to changes in the time it actually takes to get from point A to point B. Rather, they found that this extra time was “strategic padding.” Airlines intentionally reported flight times as being longer than expected so that they could positively surprise customers in flight when they announced the early arrival time (which was-actually the: real estimated arrival time all along). On-time or ahead-of-schedule flight arrivals result in happy customers. And our idea about what is on time or ahead of schedule has everything to do with the expectations that are set.

Excerpt from: Blindsight: The (Mostly) Hidden Ways Marketing Reshapes Our Brains by Matt Johnson and Prince Ghuman