Alchemy - The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life.md

Cracking the (Human) Code

• Alongside the inarguably valuable products of science and logic, there are also hundreds of seemingly irrational solutions to human problems just waiting to be discovered, if only we dare to abandon standard-issue, naïve logic in the search for answers.

• To reach intelligent answers, you often need to ask really dumb questions.

• There is an ostensible, rational, self-declared reason why we do things, and there is also a cryptic or hidden purpose.

• Irrational people are much more powerful than rational people, because their threats are so much more convincing.

• It is perfectly possible to be both rational and wrong.

• While in physics the opposite of a good idea is generally a bad idea, in psychology the opposite of a good idea can be a very good idea indeed

• There are five main reasons why we have evolved to behave in seemingly illogical ways, and they conveniently all begin with the letter S.* They are: Signalling, Subconscious hacking, Satisficing and Psychophysics.

• We do not have full access to the reasons behind our decision-making because, in evolutionary terms, we are better off not knowing; we have evolved to deceive ourselves, in order that we are better at deceiving others. Just as there are words that are best left unspoken, so there are feelings that are best left unthought.* The theory is that if all our unconscious motivations were to impinge on our consciousness, subtle cues in our behaviour might reveal our true motivation, which would limit our social and reproductive prospects.

• Imagine a world where we had no capacity for deception, and where people on dates directly asked prospective partners about their earning power and career prospects, without even pretending to be interested in their personalities. Where would we be then?

• The reason we do not ask basic questions is because, once our brain provides a logical answer, we stop looking for better ones; with a little alchemy, better answers can be found.

• Most valuable discoveries don’t make sense at first; if they did, somebody would have discovered them already.

• Ideas which people hate may be more powerful than those that people like, the popular and obvious ideas having all been tried already.

• ‘There are two key steps that a mathematician uses. He uses intuition to guess the right problem and the right solution and then logic to prove it.’

• it doesn’t always pay to be logical if everyone else is also being logical.

• conventional logic is a straightforward mental process that is equally available to all and will therefore get you to the same place as everyone else.

• you can’t create energy in one place or form without destroying it somewhere else. While all this is perfectly true in the narrow sphere of physics, it is hopelessly wrong when it comes to the very different business of psychology.

Business Lessons:

• Dyson added a degree of excitement to the transaction. Before he invented them, there was no public clamour for ‘really expensive vacuum cleaners that look really cool’, any more than people before Starbucks were begging cafés to sell really expensive coffee.

• Logic always gets you to exactly the same place as your competitors.

• People are much more comfortable attributing the success of a business to superior technology or better supply-chain management than to an unconscious, unspoken human desire.

• For a business to be truly customer-focused, it needs to ignore what people say. Instead it needs to concentrate on what people feel.

• Weird consumers drive more innovation than normal ones.

• If you simply say ‘this washing powder is better than our old powder’, it is a hollow claim. However, if you replace the powder with a gel, a tablet or some other form, the cost and effort which have gone into the change make it more plausible to the purchaser there may have been some real innovation in the new contents.

• placebos need to be slightly absurd to work.* All three elements that seem to make Red Bull such a potent mental hack* make no sense from a logical point of view. People want cheap, abundant and nice-tasting drinks, surely? And yet the success of Red Bull proves that they don’t. Something about these three illogicalities may well be essential to its unconscious appeal, or to its potency as a placebo.

Evolution

• Evolution is like a brilliant uneducated craftsman: what it lacks in intellect it makes up for in experience. Be careful before calling something nonsense. human appendix was thought to be nonsense,

• To ensure your survival, it is much more reliable for evolution to give you an instinctive fear of snakes at birth than relying on each generation to teach its offspring to avoid them. Things like this aren’t in our software – they are in our hardware.

• Nature cares a great deal about feelings, and feelings largely drive what we do, but they do not come with explanations attached – because we are often better off not knowing them.

• Nature spends a great deal of resources on what might be called ‘perception hacking’ or, in business terminology, marketing. Berries and fruits that want to be eaten develop a distinctive colouration and an attractive taste when they ripen. By contrast, caterpillars that don’t want to be eaten have evolved to taste disgusting to their predators. And some butterflies produce what look like eyes on their wings because many animals react more cautiously in their presence. Such are examples of how nature is able to hack perception rather than changing reality.

On the Uses and Abuses of Reason

• A new lens can allow you to see (and solve) problems from a more psycho-logical perspective.

• People may be accurate commentators on their emotional state, but the causes of that emotional state (in this case, uncertainty) are often a complete mystery to them.

• ‘It is difficult to get a man to understand something, when his salary depends on his not understanding it.’

• This means that attempting to change behaviour through rational argument may be ineffective, and even counterproductive. There are many spheres of human action in which reason plays a very small part. Understanding the unconscious obstacle to a new behaviour and then removing it, or else creating a new context for a decision, will generally work much more effectively.

• the best way for evolution to encourage or prevent a behaviour is to attach an emotion to it.

• if a behaviour is beneficial, we can attach any reason to it that we like.

• inability to change perspective is equivalent to a loss of intelligence.

Society/Team building:

• you can either create a fairer, more equitable society, with opportunities for all but where luck plays a significant role, or you can create a society which maintains the illusion of complete and non-random fairness, yet where opportunities are open to only a few – the problem is that when ‘the rules are the same for everyone’ the same boring bastards win every time.
• By applying identical criteria to everyone in the name of fairness, you end up recruiting identical people.
• One great problem with metrics is that they destroy diversity because they force everybody to pursue the same narrow goal, often in the same narrow way, or to make choices using the exact same criteria.
• ‘Find one or two things your boss is rubbish at and be quite good at them.’ Complementary talent is far more valuable than conformist talent.

Consumer Behaviour:

• when you are buying mass-produced goods, such as toasters, it generally pays to cultivate mainstream tastes. But when choosing things in scarce supply it pays to be eccentric.

• we have no real unitary measure of what is important and what is not – the same quality (such as not having a lift) can be seen as a curse or a blessing, depending on how you think of it. What you pay attention to, and how you frame it, inevitably affects your decision-making.

• there is no reason to assume that something is more important just because it is numerically expressible.

• it seemed that if you sent out an email promoting a play or musical, you sold fewer tickets if you included an offer for reduced-price tickets with the email. Conversely, offering tickets at the full price seemed to increase demand. According to economic theory, this makes no sense at all, but in the real world it is perfectly plausible. After all, any theatre selling tickets at a discount clearly has plenty to spare, and from this it might be reasonable to infer that the entertainment on offer isn’t all that good. No one wants to spend £100–£200 on tickets, a meal, car-parking and babysitting, only to find that you would have had more fun watching television at home; in avoiding discounted theatre tickets, people are not being silly – they are showing a high degree of second-order social intelligence.

• our tendency to attribute our successes to a planned and scientific approach and to play down the part of accidental and unplanned factors in our success is misleading and possibly even limits our scope for innovative work.

• People’s motivations are not always well-aligned with the interests of a business: the best decision to make is to pursue rational self-justification, not profit.

• ‘Nothing is as important as we think it is while we are thinking about it. Marketers exploit the focusing illusion. When people are induced to believe that they “must have” a good, they greatly exaggerate the difference that this good might make to the quality of their life.

  • while looking to buy a Porsche, we perhaps should imagine ourselves sitting in it while stuck in London traffic – something that will happen many times – rather than on a drive through the Cotswolds on a summer’s evening – something that will happen only once or twice.

• Never denigrate a behaviour as irrational until you have considered what purpose it really serves.

  • Take the control panels in elevators. One of the buttons found on them, the ‘door close’ button, is quite interesting, because on many (and perhaps most) elevators, it is actually a placebo button – it is connected to nothing at all. It is there simply to make impatient people feel better by giving them something to do and the illusion of control.
  • only possible purpose of a ‘door close’ button is to make impatient people relax, perhaps it makes no difference whether it achieves this end through mental or mechanical means.

Why Magic Really Still Exists

• You can create (or destroy) value it in two ways – either by changing the thing or by changing minds about what it is.

  • Wine tastes better when poured from a heavier bottle. Painkillers are more effective when people believe they are expensive. Almost everything becomes more desirable when people believe it is in scarce supply, and possessions become more enjoyable when they have a famous brand name attached.

  • you don’t need to tinker with atomic structure to make lead as valuable as gold – all you need to do is to tinker with human psychology so that it feels as valuable as gold.

• If you declare something highly exclusive and out of reach, it makes us all want it much more – call it ‘the elixir of scarcity’.

  • Merely adding a geographical or topographical adjective to food – whether on a menu in a restaurant or on packaging in a supermarket – allows you to charge more for it and means you will sell more.

• The desire to make good decisions and the urge not to get fired or blamed may at first seem to be similar motivations, but they are, in fact, never quite the same thing, and may sometimes be diametrically different.

Affordances

• By reducing the possible applications of the device to a single use, it clarified what the device was for. The technical design term for this is an ‘affordance’,

• When affordances are taken advantage of, the user knows what to do just by looking: no picture, label, or instruction needed.’

Signalling

• signalling, the need to send reliable indications of commitment and intent, which can inspire confidence and trust.

• If it is costly and time-consuming to join one, the only people who enter are those with a serious commitment to a craft.

• all powerful messages must contain an element of absurdity, illogicality, costliness, disproportion, inefficiency, scarcity, difficulty or extravagance – because rational behaviour and talk, for all their strengths, convey no meaning.

• someone with a reputable brand identity has more to lose from selling a bad product than someone with no reputation at risk.

• we all spend a considerable amount of time and money essentially signalling to ourselves: many of the things we do are not be intended to advertise anything about ourselves to others – we are, in effect, advertising to ourselves.* The evolutionary psychologist Jonathan Haidt refers to such activities as ‘self-placebbing.’

• Meaning is disproportionately conveyed by things that are unexpected or illogical, while narrowly logical things convey no information at all. And this brings us full circle, to the explanation of costly signalling.

Conducive conditions

• As with getting to sleep, the trick in generating bravery lies in consciously creating the conditions conducive to the emotional state.

• With sleep this might mean fluffy pillows, darkness and silence;* in the case of bravery it might involve trumpets, drums, banners, uniforms, camaraderie and so on.

• For something to be effective as a self-administered drug, it has to involve an element of illogicality, waste, unpleasantness, effort or costliness.

Problem Solving

• The problems occur when people try to solve ‘wide’ problems using ‘narrow’ thinking. Keynes once said, ‘It is better to be vaguely right than precisely wrong’, and evolution seems to be on his side.

• GPS answers a narrow question like ‘How long will it take to drive to Gatwick?’ brilliantly, but the wider questions like ‘How should I get there and when should I set off?’ still remain.

• We fetishise precise numerical answers because they make us look scientific – and we crave the illusion of certainty. But the real genius of humanity lies in being vaguely right

• Like many things that emerge from the technology sector, we become so drunk on the early possible benefit of a technology that we forget to calculate the second-order problems.

• Big data makes the assumption that reality maps neatly on to behaviour, but it doesn’t. Context changes everything.

• If you optimise something in one direction, you may be creating a weakness somewhere else.

• if you design something in a certain way, people can perceive something which doesn’t exist in reality.* What really is and what we perceive can be very different.

• what determines the behaviour of physical objects is the thing itself, but what determines the behaviour of living creatures is their perception of the thing itself.

• if you never do anything differently, you’ll reduce your chances of enjoying lucky accidents.

• if we can honestly acknowledge the gulf between our unconscious emotional motivations and our post-rationalisations, many political disagreements may be easier to solve.

Decision making:

• Conventional wisdom about human decision-making has always held that our attitudes drive our behaviour, but evidence strongly suggests that the process mostly works in reverse: the behaviours we adopt shape our attitudes. Perception may map neatly on to behaviour, but reality does not map neatly onto perception. Behaviour comes first; attitude changes to keep up.

• ‘Defensive Decision-Making’ – making a decision which is unconsciously designed not to maximise welfare overall but to minimise the damage to the decision maker in the event of a negative outcome.

• Make something too cheap without sufficient explanation and it simply might not be believable – after all, things which seem too good to be true usually are.