Give More: Lagniappe

The Big New Idea for Retail, Service and Hospitality: Lagniappe.

A ‘word worth travelling for’ is something I have always enjoyed. Mark Twain writes about just such a word, ‘lagniappe’ in a chapter on New Orleans in Life on the Mississippi (1883). It’s origin is probably Spanish. It’s meaning is special and for companies striving to make a difference – or merely to survive – its value is enormous. As Mark Twain explained,

It is the equivalent of the thirteenth roll in a ‘baker’s dozen’ … something thrown in, gratis, for good measure.

In other words, lagniappe (pronounced “LAN– yap”) is about making an extra effort … about going the extra mile … about doing something extra special. It is a gift. It is a courtesy. It is a way to stand out in a positive way. For companies like Ben & Jerry’s, Zales, Starbucks and Sodexho … it is a way of life.Successful companies know how to run successful businesses. They know how to win over and keep customers. They know how to hire and inspire their workforces. They know the importance of giving MORE THAN. They know lagniappe.

We can learn from this well travelled word in retail, service and hospitality. Lagniappe then is a small gift given to a customer by a merchant at the time of a purchase. It is the basis of the Gift Encomy and comes from our long history in tribes. For over 99% of the history of mankind we’ve lived in small tribes. These tribes consisted of between 10 to 50 individuals that lived by hunting and gathering. Existing through a concept called by anthropologists as a gift economy. Each member provided for others and status was achieved through the concept of gifting. Cooperation was the route to success as a whole.

Status was not a consequence of how much you had, but rather how much you gave away. Giving for the benefit of others with no expectation of immediate return. Trade existed, but only with outside groups. This trading was inherently competitive and thus only done with strangers.

Today we are firmly entrenched in an exchange based economy. With the adoption of money, almost everything is now traded freely. Trading involves trying to get the best deal, typically at the expense of others. The basis of exchange is inherently antagonistic with the aim of giving less and getting more. The market economy is a zero sum game. You give me A and I give you B. Transactions strive to be equal, leaving no additional place left to go in the relationship. So how can you “wow” consumers with lagniappe? Consider these ideas:

  • Greet consumers enthusiastically at the door – You had me at hello – is a famous line from the movie Jerry Maguire. Rather than saying next or wave the person forward, start your welcoming process by opening the door for them.
  • Metro bank in the UK give dog biscuits to their customers (those with dogs rather, than just feeding the queues).
  • Providing cold bottled water on a hot summer day—It’s simple but it works.
  • Walking a consumer to their car with an umbrella on a rainy day—No one likes getting wet when they are running their banking errands. Go that extra mile on rainy days.
  • Writing on lovely note paper (in ink) a thank you note after the transaction to thank them for their business. Follow-up is they key to success in any business.
  • Or Just Pick Up The Phone and leave a message; It takes all of 20 seconds to leave a thank you voice mail yet that message can brighten someone’s day.

As a business why would you want to incorporate lagniappe into your marketing mix? I believe there are at least 3 distinct reasons and corresponding benefits of giving more to exceed expectations (in service, retail and hospitality).

  • Better Positioning– stand out from your competition. If everyone is providing x, the fact that you provide x + y (gift) differentiates your offering. Less than 30% of consumers buy on price. You want to tap into the 70+% who are looking for value and a strong customer experience. Business Benefit: Differentiation
  • Increased Loyalty– giving the little extra (gift) enhances the customer experience. It creates a bond between the business and the customer. The benefit of that bond include increased loyalty and ultimately patronage as a form of repayment. Business Benefit: Retention
  • Increased Reciprocity– Part of giving extra is to create goodwill (inequality).  That inequality is repaid by positive word of mouth or word of mouse. The best form of marketing is via positive word of mouth.  By giving a signature extra (gift) you provide something for your customers to talk, tweet, blog, or Facebook about. Business Benefit: Referrals

The gift or little extra is about the respect for the relationship.  It becomes a beacon, a sign that shows you care. It’s a physical sign of goodwill and customer appreciation. Let’s be honest. Most people see retail or service as boring.

Spice it up with a little lagniappe.

 Be Amazing Every Day

Sisu – The Beating Heart of being Amazing Every Day

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Sisu – The Beating Heart of being Amazing Every Day

While I am very grateful for his gift, it has caused my mind to begin to explore it’s vast potential and it has distracted me from doing anything else. On a Saturday. You see as part of my Be Amazing Every Day programme, there is an instruction (buried within it, as an embedded command), to read more (and watch) more than you thought possible. It works for me too and James has woken this desire to fully understand this word. My reading has created new neural pathways, new thought processes and is a paradigm shift.

So I invite you to begin your journey of discovery by reading the amazing poem, Invitation by Oriah Mountain Dreamer (even if you have read it before). Buried within this inspiring and challenging poem are the beautiful lines,

It doesn’t interest me to know where you live or how much money you have. I want to know if you can get up, after the night of grief and despair, weary and bruised to the bone, and do what needs to be done to feed the children.

This could be described as a form of Sisu, a Finnish word that cannot be translated properly into the English language. If you had to translate it, it might evoke determination, bravery, resilience, perseverance and hardiness. It also could mean to act rationally in the face of adversity and remain functional when the only logical thing would be to run away or hide. Staying top left for those in the know.

There is no doubt that the term Sisu dates back hundreds of years – it has a bleak tradition. The modern and more positive concept of Sisu arose originally out of the harsh and violent conditions under which Finns had to survive throughout their history, and it can be seen as a product of these conditions.

It is often described as the essential character of the Finnish nation. Mika Hakkinen (one of the world’s greatest motor racing and Finnish through and through). He describes Sisu in an episode of the now defunct BBC programme, Top Gear. He is training James May (aka Captain Slow) to drive a rally car and takes time out to define the term (you can skip to 4:30 to 5:10).

 

The origins and etymology of the word is derived from ‘sisus´, which quite literally refers to the physical internal organs of a human or animal body (literally its ‘guts’), or it can simply mean the interior of an object.Whereas ‘having guts’ primarily refers to displaying the courage and audacity to do something risky, ‘having Sisu’ has the added dimension of doing so with integrity, honesty and humility.

Eminem – Guts Over Fear ft. Sia (contains some (strong) swear words) – is a powerful, visceral description of Sisu.

Sisu is about taking action against the odds and displaying courage and resoluteness in the face of adversity. Sisu is not so much about individual acts but is an entire way of life, a life philosophy. It is often used (sometime inappropriately) to refer to athletes, soldiers and national heroes. More generally to anyone who endures stress in their daily lives or who chooses to stand up against injustice. From Rosa Parks and Nelson Mandela to the recent Noble prize winner Malala Yousafzai – take the time to watch and listen to her amazing Nobel Peace Prize Speech (contains no swear words and is amazing in every way):

The surprising thing is that hardly any empirical research has been done to explore the meaning of this construct as a possible psychological strength resource, and it has long seemed to have a somewhat elusive nature. Sisu might be at the basis for the growth of aspects of Positive Psychology. Sisu as a psychological power potential was introduced for the first time in the 3rd World Congress on Positive Psychology in Los Angeles on 29 June 2013. Sisu is described as a psychological key competence which enables extraordinary action to overcome a mentally or physically challenging situation. Malala would surely be the very definition of Sisu.

Sisu also contributes to very understanding and being of Amazing Every Day. It needs noble discipline, a consistent, courageous approach toward challenges which at first seem to exceed our capacities. At the very heart of Sisu seem to be equanimity, something akin to vital force  and relatively high emotion regulation. Sisu is about fighting through a wall but without boasting about it.

The term ‘guts’and Sisu may be described as twins who were raised the same family, but who then wandered off on their own and developed their own unique characteristics. Maybe you need to have both to be Amazing every day.

So thank you James. You have changed my brain forever and you are Amazing. Lucky it’s a long weekend.

Ask Better Questions

Stop asking a dumb questions like, ‘what do you do?’.

Ask better questions. Every day. In my earlier years when I was naive I thought that my success would increase in proportion to the number of business cards I handed out. I handed them out in droves (printers loved it…) but I couldn’t figure out why I wasn’t getting any business. After a few years of experience under my belt I realised that it wasn’t the numbers that count, but the quality of relationships that I nurtured.

To be a great networker you must become “you” centred rather than “me” centred. Recognise that people want to talk about themselves more than anything. They are their own favourite subjects. Take advantage of that and learn these 10 questions that will make people feel warm, appreciated, and important.

Zig Ziglar, the famous sales trainer once said,

You can get everything in life you want if you just help enough other people get what they want. 

This is so true. Thanks Mr. Ziglar.

The following are ten questions that Bob Burg, author of the book, “Endless Referrals” gives to help you get to know potential referrers and leave a lasting positive impression. Try using them today and see this amazing thing happen.

You’ll notice something in common with each of these questions. They all centre around the person you are talking to and allows them an opportunity to talk about themselves. Don’t expect to ask your Centre of Influence each of these questions, but do have a few ready when you talk to others. Think of it as a game – watch Brian Walters brilliant explanation…

 

 

Be Amazing Every Day
 

Radical Leadership Wisdom

  • Leaders who don’t think like leaders.
  • Leaders who look for blame
  • Leaders who think like managers
  • Leaders who devalue their leadership
  • Leaders limited by their belief structure

So it is time to create some new Radical Leaders, right now. Why? Well looking up the dozens of Google synonymous or conceptual triggers of this word, consider these as applied to radical leadership: Amazing, Innovative, Uncompromising, Profound, Rigorous, Far-reaching and Essential.

Radical is in fact an amazing word, contaminated by it’s evil cousin ‘radicalisation’, which has a connections to extremism, which, in turn has a connotation of extreme violence. However the good version of radical can be twinned to the biochemical version ‘radical’: group of atoms behaving as a unit in a number of compounds. So radical leadership seems to induce alignment, one team, synergy of hearts and minds.

Using the principle of my knowledge leadership ‘still’ (and modeled on my memories of synthesis biochemistry), I have ‘distilled’ a potentially precious droplet of Radical Leadership Wisdom (RLW). Great abstractions are the distillation of an ideal and can be formed with just that ideal in mind, devoid of specific assumptions. Starting from what we see now and abstracting from there is not unlike solving a maze backwards. The best way to explore these radical leadership ideas is to start from a blank slate with lots of research behind it. Starting with an abstraction allows you to research and explore with that abstract solution grounding your explorations.

So my radical droplet proposition for leaders, is that leadership knowledge, wisdom and insight may sound like synonyms, but they are not. Though they all refer to the mind and an accumulation of thoughts and experiences, they have some very real differences in the essence of their meanings and their applications for Leadership.

Radical Leadership Wisdom is the ability to discern and judge which aspects of that knowledge are true, right, lasting, and applicable to your business. It’s the ability to apply that knowledge to the greater scheme of life. It’s also deeper because it is the knowing the true meaning or reason. RLW is all about knowing your why and what it means to your business.

Wisdom is the result of the distillation of your experiences 

-Adamus Saint-Germain

Insight is the deepest level of knowing and the most meaningful radical leadership. Insight is a deeper and clearer perception of life, of knowledge, of wisdom. It’s grasping the underlying nature of knowledge, and the essence of leadership wisdom which changes everything. So Radical Leadership Wisdomwould be uncompromising leadership that is rooted in integrity, authenticity and the ability to create (biochemical) ‘radicals’ of commitment.These radical leaders would be also uncompromising travellers in search of the truth, with high levels of antibodies to bullshit, and determined to make a profound difference.

Discussion is always good and here we could debate what Radical Leadership Wisdom (RLW) might look like:

  • RLW always creates more leaders (not just) followers
  • RLW change from the old (management) style of ‘I Leadership’ to ‘We Leadership’. Radical Leadership begins with We.
  • RLW moves from controlling people to aligning passions. Successful leaders align the passions of their teammates with organisational mission.
  • RLW enables people to simplify, edit and amplify. Some leaders enjoy the feeling of importance that complexity creates. But, any fool can make something complex. Leaders always simplify.
  • RLW requires change from deciding who was right to what is right. In the world of RLW, it doesn’t matter who comes up with solutions.
  • RLW create pursuing clarity and abstraction of truth. Most people don’t have the discipline or endurance to bear the frustration of pursuing clarity. They just want to get something done.
  • RLW is massive movement from receiving praise to giving it.

To have this Radical Leadership Wisdom means to have a new powerful positive vision in life and be able to see beyond the ordinary. This radical vision when combined with massive action can truly change the world. Now is the time to re-take the word ‘radical’ and use it for new breed of leaders. It’s time for Radical Leadership Wisdom to be at the core of the curriculumSince we can’t simply carry on applying exhausted leadership to our vibrant enterprises, the time of Radical Leadership Education (RLE) has also come. [Ask me how]. It is my experience that RLW and RLE combined with discipline and perseverance, are the most important skills you can have.

Individually, we have one drop of Radical Leadership Wisdom. Together, we are an ocean.

Be Amazing Every Day. 

Innovate and Cry

I made someone cry at work the other day. I did not mean to, in fact I was trying to encourage them. I am sorry, I was wrong.

I have seen something more dramatic happen in the last few months. The truism innovate or die is being challenged. Lasting success is more rare than ever, as the innovation rate rises and competition gets tougher. So, how do you keep up with the increasing complexity and innovation in the market? The most natural way, of course, is to unleash the innovative potential of the organisation. Which can be very painful. To do so, a creative climate is a necessity, but far from enough. Innovation excellence requires shared language, processes and platforms too.

Explore, play and create novelty.Innovation as an expression of human creativity and lateral thinking, is not the result of economic development, but rather the source of sustainable economic and social progress. I am privileged to be working at the cutting edge of empirical service innovation and it is very exciting. In restaurants and hotels I work closely with, I see that they are constantly attempting to find innovative ways to serve customers more effectively and efficiently. My experience of seeing innovating in a service business, is that it seems to work best if the innovations are:

  • aligned with you why or purpose,
  • meet (and predict) a future consumer need and
  • can be delivered by empowered staff.

Now more than ever, innovation is seen as key to growth, to acquiring and sustaining competitive advantage, and to building shareholder value for the long term. But is innovation deflecting us away fro giving excellent service? Of course service systems are the dynamic configurations of people, technologies, organisations and shared information that create and deliver value to customers, providers and other stakeholders.

I see the innovation process fast becoming more open and more global. Setting up shop in local markets around the world and getting customers more involved in innovation efforts are now a vital part of any successful innovation effort.The rising significance of service and the accelerated rate of change mean that service innovation is now a major challenge to all business sectors. Innovation is forward looking. Solving yesterday’s problems is important, but not innovative. Copying what others do well is often a good approach, but not innovative.

Hotels, restaurants and the service industry form a growing proportion of the world economy and are becoming central to the way businesses, governments, families and individuals work. Innovation, a term applied almost exclusively to technologies in the past, is increasingly used in relation to service systems. Ideas of service are, of course, not new. However, the scale, complexity and interdependence of today’s service systems have been driven to an unprecedented level, due to globalisation, demographic changes and technology developments. Over the course of modern history, innovation has proved fundamental for formal organisations. In the past decades, as market competition intensified and the business environment grew in complexity and uncertainty, innovation became essential not only to an organisation’s performance, as several studies have demonstrated, but to its very existence and survival.

Innovation can be seen as a new or improved ways of designing and delivering services. This may include innovation in service delivery systems, though often this will be regarded instead as a service product innovation. Innovation of this sort may be technological, technique or expertise-based. While radical innovation can be viewed as market driving idea which comes from the leader’s vision of market opportunity, the incremental innovation from the service team is equally powerful. Just don’t make them cry.

It is surely true that every company, in every industry, needs an innovation strategy. This can be a high-tech product innovation, packaging innovation in consumer goods, or process innovation at financial services companies. But this requires a zoom out then zoom in approach. This results in a new challenge to service innovation, the real-time nature of introducing new services. The service cannot be tested in a laboratory. At minimum it must be pilot tested with real guests in a real hotel. Real clients in the restaurant. Even though innovations are desirable, the customers and organisation may resist them. And that can be dangerous ground and can produce some negative feedback on social media.

My passion for excellence requires that innovation is most successful in service operations that seek the support of employees for innovations and, beyond that, encourage employees to participate in a culture of innovation. Many individual strands of knowledge and expertise relating to service systems already exist, but they often lie in unconnected silos. Perhaps my favourite expression,

Learn, Love, Laugh, Cry and Innovate.

I will try not to make anyone else cry tomorrow.

Be Amazing Every Day.

Brain Impulse Buying

If you’re reading this thinking that you aren’t susceptible to impulse buying, think again. In truth, we aren’t always rational thinkers when we buy things (online or in store). The fact of the matter is that your unconscious mind is often driving your behaviour as a consumer. It is under the influence of our basic evolutionary drives and the clever tactics of retailers. It is so easy to feel compelled to buy something that you may regret or justify later with some retro-fitted reasoning.

So what’s going on inside your head and what can you do to make fewer purchases that will turn out to be wasteful? Impulse buying can be defined as, a stimulus-controlled, spontaneous buying behaviour that is accompanied by strong positive emotions and low cognitive control. Bit of a mouthful, so to quote Lindsay Lohan, My mum says, ‘Go with your first instinct,’ but this can lead to impulse buying!

Research shows that a huge amount of our decision making is actually based on subtle subconscious factors. These tend to be accentuated when we are not focussing or distracted (sometimes deliberately). Indeed it appears that a wandering mind can not only lead to accidents and lost productivity but to powerful impulse buying. Yet the brain is the most complex organ in the Universe. It produces our every thought, action, memory, feeling and experience of the world. New research is indicating that focus is a crucial mindful choice and ideas of control (in retail) may be an illusion. Indeed real-time brain monitoring can be used to help people regain focus and might lead consumers to be more selective buyers as a result.

In the animal kingdom, humans are known for our big brains. This jelly-like mass of tissue, weighing in at around 1.4 kilograms, contains a staggering one hundred billion nerve cells, or neurons. The pattern and strength of the neural connections is constantly changing and no two brains are alike. Yet it’s structure determines how memories are stored, habits learned and personalities shaped, by reinforcing certain patterns of brain activity, and losing others. Researchers have uncovered genetic variations that help determine the size of key brain regions. These variants may represent the genetic essence of humanity and choice. Maybe.

This supposed free choice is deeply influence by some simple external factors. Most shopping is far too dull and time consuming to carry out with conscious attention. Imagine if every item you bought was cross-referenced with every other product available in the market; you would need to look at price, product composition, reviews and maybe even the quality of customer service supporting it. Even if you could find all the information in comparable formats it would take hours to buy one item. So instead we use heuristics [unconsciously held rules and short cuts] that help us make quick decisions that we’ve learned generally work out well.

However, these shortcuts when combined with loss of concentration and focus may lead to the idea of how we make poor decisions to buy. Neuroscientists at Princeton University monitored the brain activity of students who were asked to perform a repetitive task that required close attention. The findings, published in the journal Nature Neuroscience, show that people can learn to stop their minds from wandering if they are made aware it is happening. This means if we (as consumers) can use real time brain activity as a basis of feedback (the app must be round the corner) we might be able to train our brains to be more sensitive to when their attention is starting to wane and gain real focus.

Another article in ‘Science Daily’ looks at the research on how what’s going on inside our head affects our senses. Children from more challenging economic communities think coins are larger than they are, and hungry people think pictures of food are brighter. (Science Daily, 3 March 2012). They found that when words were flashed very fast on a screen (too fast to read, but slow enough to imprint on the brain), hungry people saw the food related words as brighter and were better at identifying the food-related words when shown on a list after they were flashed. This research indicates is that our perceptions increase toward items that our body wants or needs. Our illusion of control and that idea we have a choice in buying is being further challenged.These exciting pieces of research indicate that we can all become neurosales savvy (whether to sell or to buy sensibly). The secret is by asking 2 questions:

  • How do we get more focus?
  • What we are really lacking, or hungry for, in our day to day lives?

It all start by telling a good story. By turning percentages and figures into a good tale capture and keeps your customers’ attention. Statistics are great but you need people to pay attention to your numbers to help drive sales. Our brains are wired to process stories in a more engaged way. Brain scan work shows that when people read a story with a lot of action elements, their brains actually mimic the motions.

Another area some retailers have learned to focus on is that we’re very susceptible to the loss aversion switch. Loss aversion, if you’re unfamiliar with the term, describes our innate concern to avoid feeling bad in the future. Normally this would affect our purchase decisions by causing us to prevaricate over a purchase: “Might I feel bad if I buy this and don’t have the money for something else?” But add in a discount that we’re told or we assume won’t last forever and our unconscious focus switches to the fear we’ll miss out on the deal. Retailers take advantage of this by packaging up products as bulk buys, or they include ‘free’ extras. We get the impression that it must be good value, and we go with this feeling rather than researching any further.

Our heuristic susceptibility to value and apparent discounts isn’t just down to the loss aversion switch; many of us have an innate desire to save. Retailers and manufacturers play on this by telling us how much money we could save by buying and using their product. Perhaps thousands of years ago, knowing that it was important to store up food and wood for the winter would be the difference between life and death. These days most of us no longer need to worry about our day-to-day survival, but the evolutionary drive remains. In short, we find it hard to resist the idea that we’ll be saving money or time.

Though we have already discovered an enormous amount about the brain, huge and crucial mysteries remain. One of the most important is how does the brain produces our conscious experiences? The vast majority of the brain’s activity is subconscious. But our conscious thoughts, sensations and perceptions, what define us as humans, cannot yet be explained in terms of brain activities.

Objectivity is an elusive virtue in buying.

Be Amazing Every Day.

Samsung, Big Data & Dumb Heuristics

Gerd Gigerenzer is a strong advocate of the idea that simple heuristics can make us smart. Yet heuristic might be the root cause of our deep fear of big data, big brother and our data being misused. Imagine you’re a turkey at Christmas. Every day you are approached by a man with a bucket of corn who feeds you. What kind of mental model of what happens when he appears, do you think you will build up? Gigerenzer is the Director of the Max Plank Institute for Human Development and might use this story to demonstrate how high tech firms approach big data to predict the future from past decisions. These organisation make predictions based on the past that are only ever correct by chance and we believe them in order to absolve ourselves of responsibility for when things go wrong. According to many it’s a waste of time, money and talent. Because systems will always go wrong. Because, of course, Christmas always comes.

In psychology, heuristics are simple, efficient rules which people often use to form judgments and make decisions. They are mental shortcuts that usually involve focusing on one aspect of a complex problem and ignoring others. This occurs when you talk with groups about Big Data. People’s gut reactions (heuristics) to things tell them that information about themselves or their loved ones, collected and disseminated, is bound to be used for evil rather than good. But how valid are their concerns about big data and this digital collection of our thoughts? Collecting information on us might fuel the fear of big data. Or as in this brilliant tweet, suggesting Samsung SmartTV instruction manual is taken from George Orwell’s 1984.

The Samsung revelation on Monday 19th February 2015 in the Daily Telegraph,

‘Samsung SmartTV customers warned personal conversations may be recorded. Voice recognition software could transmit ‘personal or sensitive’ information Families are being warned that modern televisions are recording their conversations and could transmit the messages to “third parties”. Many of the latest sets have microphones so viewers can change channel, turn on a DVD or browse the internet by speaking at the screen or remote.But the small print of the privacy policies for these so-called Smart TVs contain warnings that general conversations are also being recorded.Television companies advise users who are concerned to avoid discussing “personal” matters in their livings rooms.The practice, which emerged on internet forums yesterday, led customers on social media to draw comparisons to George Orwell’s 1984. It is unclear whether the information is used for marketing purposes or held on computer that could be hacked by criminals.’

Count on the great Isaac Asimov to have presaged it, much like he did online education, the fate of space exploration and even the rise of Smart TVs. In his legendary Foundation trilogy, Asimov conceives his hero, Hari Seldon, as a masterful mathematician who can predict the future through complex mathematical equations rooted in aggregate measurements about the state of society at any given point in time. Like Seldon, who can’t anticipate what any individual person will do but can foreshadow larger cultural outcomes, big data is the real-life equivalent of Asimov’s idea, which he termed psychohistory, an invaluable tool for big-picture insight into our collective future.
But here comes the irrational fear again. The human brain comprises two distinct parts (if not 3): the old simple brain in the back, which produces impulses and instincts that help us to survive, and the new brain in the front of the head, which we use to control those impulses.The problem is that, sometimes, the two conflict. For example, we might crave fast food even while knowing it’s bad for us. Or we might feel fear when standing on top of the Shard even though we know we’re not going to fall. New research challenged the idea that human beings are rational actors, but provided a theory of information processing to explain how people make estimates or choices.

Heuristics mean we (traditionally) don’t need complex models of the world to make good decisions. These rules work well under most circumstances, but they can lead to systematic deviations from logic, probability or rational choice theory. The resulting errors are called cognitive biases and many different types have been documented. Heuristics usually govern automatic, intuitive judgments but can also be used as deliberate mental strategies when working from limited information.

No matter how much I know about heuristics and concentrate on avoiding the sunk cost fallacy, I still naturally gravitate towards it. The term sunk cost refers to any cost (not just monetary, but also time and effort) that has been paid already and cannot be recovered. So, a payment of time or money that’s gone forever. The reason we can’t ignore the cost, even though it’s already been paid, is that we wired to feel loss far more strongly than gain. Psychologist Daniel Kahneman explains this in his book, Thinking Fast and SlowOrganisms that placed more urgency on avoiding threats than they did on maximising opportunities were more likely to pass on their genes. So, over time, the prospect of losses has become a more powerful motivator on your behaviour than the promise of gains

The sunk cost fallacy plays on this tendency of ours to emphasise loss over gain. A brilliant 1985 (nearly 1984) research study by Hal Arkes and Catherine Blumer is a great example of how it works. They asked subjects to assume they had spent £1000 on a ticket for a ski trip in the Switzerland, but soon after found a better ski trip in France for £500 and bought a ticket for this trip too. They then asked the people in the study to imagine they learned the two trips overlapped and the tickets couldn’t be refunded or resold. Which one do you think they chose, the £1000 good vacation, or the £500 great one?

  • Over half of the people in the study went with the more expensive trip. It may not have promised to be as fun, but the loss seemed greater.

The sunk cost fallacy leads us to miss or ignore the logical facts presented to us, and instead make irrational decisions based on our emotions (see the news and big data fears) without even realising we’re doing so. The fallacy prevents you from realising the best choice is to do whatever promises the better experience in the future, not which negates the feeling of loss in the past.

Could it be that our fear of Big Data emanates from this short cutting old brain structure? What exactly are we really afraid of? If big data can help us overcome these heuristic brain errors, it holds the promise of righting the balance of quality over quantity in our culture of information overabundance, helping us to extract meaning from (digital) matter. Just as the old brain interprets images in art and film as being real (this is why we feel afraid when watching horror movies) perhaps it conflates our hypothetical big data fears with reality.

Our best bet is to try to separate the current facts we have from anything that happened in the past. In a society that tweets more words every hour than all of the surviving ancient Greek texts combined, we certainly could use that.

Samsung can only hope we can separate the two very quickly.

Be Amazing Every Day.

Big Idea: Trivial Bikeshedding Management

Did you know that today is National Trivia Day* and 50 years ago (last Wednesday 5th February, 1965) trivia was invented? Well sort of true; a Columbia Spectatorarticle appeared on this day and used the term trivia to topics like,

  • Who played the Old Gypsy Woman in The Wolfman?
  • Answer: Maria Ouspenskaya (I did not know this either).

Columbia University students Ed Goodgold and Dan Carlinsky, who had proposed the new use of the term in their original article swiftly created the earliest inter-collegiate quiz bowls that tested culturally (and emotionally) significant yet essentially unimportant facts, which they dubbed trivia contests. The expression has also come to suggest information of the kind useful almost exclusively for answering quiz questions, hence the brand name Trivial Pursuit (1982).

The word originates from the Latin neuter noun trivium (plural trivia) is from tri- “triple” and via “way”, meaning a place where three ways meet. The word trivia was also used to describe a place where three roads met in Ancient Rome. Often misquoted with the comedic line that 2 are irrelevant (trivial) as only the one leading back to Rome is important. They did not, as some wag (Frank Skinner) suggested, pin pieces of rubbish information at these cross roads.

More accurately trivia are the three lower Artes Liberales: grammar, logic andrhetoric. These were the topics of basic education, foundational to the quadrivia of higher education, and hence the material of basic education and an important building block for all undergraduates. In management terms I came across Parkinson’s law of triviality on my MBA course years ago. It also known as ‘bikeshedding’ and was first described by C. Northcote Parkinson in 1957. His argument was that organisations give disproportionate weight to trivial issues.

Parkinson observed and illustrated that a committee whose job is to approve plans for a nuclear power plant spent the majority of its time with pointless discussions on relatively trivial and unimportant but easy-to-grasp issues, such as what materials to use for the staff bike-shed, while neglecting the less-trivial proposed design of the nuclear power plant itself, which is far more important but also a far more difficult and complex task to criticise constructively. As he put it:

The time spent on any item of the agenda will be in inverse proportion to the sum [of money] involved.

A reactor is used because it is so vastly expensive and complicated that an average person cannot understand it, so one assumes that those that work on it understand it. On the other hand, everyone can visualise a cheap, simple bicycle shed, so planning one can result in endless discussions because everyone involved wants to add a touch and show personal contribution.

Thus bike shedding involves discussions about relatively unimportant issues which result in extensive debate. Know that feeling at many a management meetings?

It may be the result of individuals who wish to contribute feeling that they do not have the knowledge or expertise to contribute on more significant issues. Bike shedding can result in discussions that, whilst on-topic, nevertheless effectively drown out other discussions on more significant issues.

My top 7 favourite pieces of trivia are currently:

  1. On Good Friday in 1930, the BBC reported, “There is no news.” Instead, they played piano music.
  2. In the 1980s, Pablo Escobar’s Medellin Cartel was spending $2,500 a month on rubber bands just to hold all their cash.
  3. M&M’s actually stands for “Mars & Murrie’s,” the last names of the candy’s founders.
  4. In 1907, an ad campaign for Kellogg’s Corn Flakes offered a free box of cereal to any woman who would wink at her grocer.
  5. The Arkansas School for the Deaf’s nickname is the Leopards.
  6. The Vatican Bank is the world’s only bank that allows ATM users to perform transactions in Latin.
  7. The unkempt Shaggy of Scooby-Doo fame has a rather proper real name of Norville Rogers.

*There is a National Trivia Day, but it is January 4th.

Be Amazing Every Day

Silence Your Brain!

Peter was after a talking parrot, so he went to the local pet shop in the hope of securing such a find. He was in luck. The shop assistant assured her that the parrot would learn and repeat any word or phrase it heard. Peter was delighted. However, a week later, the parrot still hadn’t spoken a word. Peter returned to the shop to complain, however, it appeared that the assistant was accurate in what he had said and refused a refund. Why didn’t the parrot talk? [answer at the end, but remember the parrot repeats every single word it hears].

Shut up! Like the mute button on the TV remote control, our brains filter out unwanted noise so we can focus on what we’re listening to. Most of us will be familiar with the experience of silently talking to ourselves in our head. That inner monologue usually conducted in silence. Self doubts, insecurities and a general soundtrack or commentary to life.

Have you ever been at the supermarket and realise that you’ve forgotten to pick up something you needed. You might say (outloud), ‘saugages!’ or whatever your temperoary lapse of recall was. Or maybe you have got an important meeting with your boss later in the day, and you’re simulating, (silently in your head) how you think the conversation might go, possibly hearing both your own voice and your boss’s voice responding. This is the phenomenon that psychologists call inner speech, and they’ve been trying to study it pretty much since the dawn of psychology as a scientific discipline.

Our Brain’s have a built in filter for unwanted noise. When it comes to following our own speech, a new brain study from the University of California, Berkeley, shows that instead of one homogenous mute button, we have a network of volume settings that can selectively silence and amplify the sounds we make and hear. They discovered that neurones in one part of the patients’ hearing mechanism were dimmed when they talked, while neurones in other parts lit up. Their findings, published in the Journal of Neuroscience, offer clues about how we hear ourselves above the noise of our surroundings and monitor what we say. Previous studies have shown a selective auditory system in monkeys that can amplify their self-produced mating, food and danger alert calls, but until this latest study, it was not clear how the human auditory system is wired.

With this in mind it might make more sense when we need to really listen to something that is important. Say you have to listen to fill a prescription or enter data that is potentially life threatening if you get it wrong. When we want to listen carefully to someone, the first thing we do is stop talking. The second more surprising thing we do is stop moving altogether. This strategy helps us hear better by preventing unwanted sounds generated by our own movements.

This interplay between movement and hearing also has a counterpart deep in the brain. Indeed, indirect evidence has long suggested that the brain’s motor cortex, which controls movement, somehow influences the auditory cortex, which gives rise to our conscious perception of sound. A new study, in Nature, combines cutting-edge methods in electrophysiology, optogenetics and behavioural analysis to reveal exactly how the motor cortex, seemingly in anticipation of movement, can tweak the volume control in the auditory cortex. The findings contribute to the basic knowledge of how communication between the brain’s motor and auditory cortexes might affect hearing during speech or musical performance.

And the parrot? The parrot was deaf. Therefore it couldn’t repeat a single word it had heard – as it had heard no words at all.

Be Amazing Every Day

Innovation is full of Paradox.

Whoever Makes the Most Mistakes Wins.

Tom Peter’s again, right on the money. Paradox can prove to be very revealing about human nature and leadership. Nobel Prize winner Niels Bohr was a Danish physicist who made foundational contributions to understanding atomic structure and quantum theory. He once said, ‘Now that we have met with paradox we have some hope of making progress.’ 

At the most basic level, a paradox is a statement that is self contradictory because it often contains two statements that are both true, but in general, cannot both be true at the same time. What generates real innovation is actually understanding why (and how) paradox can inspire people.

The origins of innovation can be found in the evolution and development of the neocortex. These higher centres of the human brain are the source of abstract thought and also our very human quality of learning from failure. The ability to Explore, Play and Create Novelty in a safe environment becomes critical. The word ‘innovate’ can be traced all the way back to 1440. It comes from the Middle French word [which apparently on my Linkedin profile is something I am an expert in] ‘innovacyon’, meaning ‘renewal’ or ‘new way of doing things’. This echoes Peter Drucker’s brilliant reflection on innovation,

Change that creates a new dimension of performance.

The act of introducing something new (innovation) begins with an internal brain process. We can look at where by using tools like fMRI to determine which areas ‘light up’ during the process but it’s origin is unclear. Somewhere there is spark, a neuro-chemical reactions and the beginning of the fascination over an idea. This state of innovation, constant fascination and being intensely interested in something, is a primitive survival mechanism that might not help survival (you might eat the wrong killer berry). Yet by making a safe environment, where we can explore, play and create novelty we create a spark that both motivates and innovates.

Daniel Pink beautifully describes (in his book Drive) the paradox of money as a motivator (watch the surprising results it delivers). Companies need to allow more autonomy and self direction. That’s why Google gives its workforce 20% of their time to explore projects on their own. That’s why 3M and W.L. Gore do something similar. They know that the root of innovation is fascination and failure.

Wise leaders accept their setbacks as necessary footsteps on the path towards success. In The Innovation Paradox, Richard Farson and Ralph Keyes argue that failure has its upside, success its downside. These two are not as distinct as we imagine. They co-exist, are even interdependent. Both are steps toward achievement.

It’s not success or failure, but success and failure.

Every company worth knowing has identified innovation as a core competency needing to be developed. However a large percentage of our time and our organisation’s energy is necessarily spent on activities that don’t require innovation. We also know that scaling up an innovation depends on the operation of relatively routine tasks and processes, many of which are in place and already have been proved effective. What’s needed in organisations whom aspire to a culture of innovation, is the energy to create a spark and then embrace success and failure as equals.

The key to the innovator paradox then is the development of this neurochemical spark within people. So what sparks people? If you do some analysis of the most creativity and innovate people in history, you will find that the spark lies deep in their brain. They are able to be curious and creative. They become fascinated, even obsessed by ideas. While it can certainly be supported by systems, it can never be reduced to systems. Because that’s where innovation starts, with the innovator and the inspired individual, compelled by their DNA to make a difference. Then all that person needs is from you is time, some resources, meaningful collaboration, and periodic reality checks from someone who understands what fascination is all about.

One’s only rival is one’s own potentialities. One’s only failure is failing to live up to one’s own possibilities. In this sense, every man can be a king, and must therefore be treated like a king. – Abraham Maslow

If you study the lives of people who have had those Eureka moments, you may well note that their breakthroughs almost always came after extensive periods of intense, conscious effort. They worked, they struggled, they explored, played and created novelty. They gave up, they recommitted and then the breakthrough came, often at unexpected moments. The conscious mind works overtime in an attempt to solve a problem or achieve a goal. Unable to come up with the breakthrough, the challenge gets turned over to the subconscious mind, which then proceeds to figure it out in its own, without time pressure and focus.

Coming up with the right question is at least half of getting the right answer. If you want a breakthrough idea, begin by coming up with a breakthrough question. Find the one that communicates the essence of what you’re trying to create. Perhaps Einstein said it best when he declared, Not everything that can be counted counts; and not everything that counts can be counted. He was referring, of course, to the part of the human brain that ‘knows’ intuitively; the part that is tuned in, connected, and innately creative.

If you, or the people who report to you, are not currently in a state of innate fascination, it’s time to turn things around. That is, of course if you really want to spark some innovation. Throughout history, the best managers and leaders always have allowed this special space of paradox and innovation to exist. Since failures so often lead to successes, and vice-versa, rather than try to sort these two out, wise managers focus on the innovation process and what can be learned from it.

What exists on the other side of failure, is fuel for your untapped creativity.

Be Amazing Every Day.

[If you don’t get this message, call me; if you do get it, don’t call. Spread the word.]