After our rather successful “Most Interesting People in the World” call with Rory Sutherland last week, we had a high volume of requests for follow-ups.
As a reminder, Rory is the Vice Chairman of ad agency Ogilvy. He has boldly argued that “It seems likely that the biggest progress in the next 50 years may come not from improvements in technology but in psychology and design thinking.”
Insights from his book Alchemy are attached. He also suggested the book “When More is Not Better: Overcoming America’s Obsession with Economic Efficiency” by Roger Martin.
Here are four of the areas he talked about that sounded fascinating and worthy of further study. I suspect most of these insights will be most useful for those of you who are business operators, innovators, and owners.
1. The SCARF Model.
Rory thinks David Rock’s SCARF model can help explain a lot of seemingly-counterintuitive human behavior. It involves five domains of human social experience:
- Status is about where you are in relation to others around you. Like a peacock’s plumage, we pay more for costly luxury goods to signal status to others around us.
- Certainty concerns being able to predict the future. We “satisfice” with brands. We know that a particular branded tablet may not be the best on offer, but it’s certainly not going to be terrible. Brands have skin in the game because they have repeat customers.
- Autonomy provides a sense of control over events. Uber was successful because it gave you a sense of when your car would arrive. Airlines are better off saying how long your plane is going to be delayed for. “The single best investment ever made by the London Underground in terms of increasing passenger satisfaction was not to do with money spent on faster, more frequent trains – it was the addition of dot matrix displays on platforms to inform travelers of the time outstanding before the next train arrived.”
- Relatedness is a sense of safety with others, of friend rather than foe.
- Fairness is a perception of impartial and just exchanges between people. Relative compensation is often as important as absolute. For one of the funniest examples of this, search the capuchin cucumber experiment.
2. W. Edwards Deming
Both Rory and our previous “Most Interesting” speaker Jaron Lanier have emphasized the work of W. Edwards Deming. That seems noteworthy! Lanier in particular emphasized the need for modern internet companies to re-focus on Deming’s concept of quality. The Deming Institute has a section on their website outlining his principles and theories.
3. Paradoxical thinking: “the opposite of a good idea can be a good idea”
Rory’s observation was, “if something isn’t selling well, try raising the price.” KFC in Australia advertised that patrons were only allowed 4 portions of fries per customer. They saw a material increase in sales and in people buying 4 portions at once. Rory has also noted the counterintuitive benefits of emphasizing perceived weakness. For example Avis’ slogan “When you’re only No. 2, you try harder.”
His general point is about the resolution of creative tension, which often first presents as a paradox. As physicist Niels Bohr said, “How wonderful that we have met with a paradox. Now we have some hope of making progress.”
I’ve tried for literally years to get my head around this concept, and I know it’s important, but I’m still not quite there. The consistently wonderful Kyle Kowalski at Sloww very recently put out a primer on polarity thinking with an introductory video to the concept that he recommends.
4. The TRIZ Model.
TRIZ is the Russian acronym for the "Theory of Inventive Problem Solving," a system of creativity developed in the USSR between 1946 and 1985 by engineer and scientist Genrich Altshuller.
What’s especially interesting is that TRIZ’s massive research into innovation across 2 decades and hundreds of thousands of patents found that inventive solutions typically require overcoming a dilemma or trade-off between two contradictory elements. So very resonant with paradoxical thinking!
I’ll be digging into it, but first blush it looks both intriguing and insanely complicated. I was intrigued by the comment on Wikipedia that examples of its application are rare because it’s regarded as a source of competitive advantage.
As the meta-takeaway, something that’s important to note about Rory is that he is extraordinarily adept at using anecdotes, stories, and humor to illustrate his examples. Prepping for the interview, I listened to many hours of his podcast appearances. Unlike a lot of “this sounds smart” factual or insightful content that is then immediately forgotten, I noticed I retained about 80% of what Rory said afterwards. He has also emphasized that anecdotes and humor are key ways to indicate the presence of creative tension or opportunity. His rhetorical technique is also hugely informative as to how to communicate your own ideas effectively.
Rory recommended registering for Nudgestock on the June 11, where he is one of a number of wildly impressive speakers.
Hope you enjoyed it, and please keep your eyes peeled for future speakers!
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