I really like the story-telling genre of books, typified by Malcolm Gladwell (Blink, Tipping Point, Outliers). Sway (Ori Brafman & Rom Brafman) is another book in the same category, and a good one. The stories are helpful to bring the insights to life, and the insights are powerful to bring life… to life.
I wanted to pull out some key points for myself, and then I thought I would share them and some of my additional insights. It’s rationale to share. So my key take-aways:
Behaviors and decision making are influenced by an array of irrational, psychological forces. And like streams, these various forces combine and become very powerful.
Key ‘hidden’ forces are:
– Loss Aversion – tendancy to go to great lengths to avoid possible loss
- also has notion of commitment – once started down a path, one feels obligated to continue, despite evidence
– Value Attribution – inclination to ascribe to a person or thing certain qualities based on initial perceived value, rather than objective data
- this can be helpful to us as a mental shortcut to determine what is worthy of attention, but in some cases, very misleading
- value attribution can be arbitrary, with no link to any actual value of any sort
– Diagnosis Bias – propensity to label people, ideas or things based on our initial opinions, blindness to evidence that contradicts our initial assessment of a person or situation
– concept of fairness in terms of irrationality is mostly driven by the process rather than the outcome
- cultural bias of fairness is interesting (Americans & Russians think differently!)
– Money & compensation use a special part of the brain… that is the opposite of the altruistic brain
- The nucleus accumbens enjoys the thrill (first date, gambling), loves highs, and deals with the notion of gains and losses for money (the ‘pleasure center’
- The posterior superior temporal sulcus looks after social interactions, how we perceive and relate with others (the ‘altruistic center’)
- The key driver is the anticipation of reward in driving addictive behavior and surpressing altruism
– Group dynamics form an important part of irrational behavior, particularly allowing and handling dissent
- Four types of person: initiator (starts things, excites people), blocker (questions things, critic), supporter (takes a side), and observer (neutral)
Some implications for Innovation and Idea Management:
1) Danger of Financial Rewards & Likely Reasons for Practical Failures of Prediction Markets
As we know, financial rewards are very damaging to Idea Management and innovation initiatives. Most people contribute out of a desire to help and engage with others. As soon as you add a financial component to the process, people’s brains think differently.
This is especially the case in the emergent area of prediction markets, typified by Spigit and NewsFutures. Individuals are encouraged to spend their time helping others (the ‘…sulcus’ part of the brain) by reading through ideas and making judgments. The ‘market’ component of the Prediction Market then triggers the more powerful ‘pleasure center’ part of the brain, and then surpresses one’s desire to help others. This is made even more damaging when the company highlights the potential benefits in scoring or spending time doing evaluations. Why spend two hours’ worth of time for someone else’s benefit… and all I get is a lousy T-shirt?
2) Personality Styles
The work on dissent matches closely to our work on the Orchid Model and the instrument we use to identify personality styles regarding handling new things. One can intuitively see the connection between:
– initiator = creator
– blocker = inquisitor
– supporter = helper
– observer = doer (stays out of the issue, just wants to know what to do)
I like the work on irrational behavior a lot – it makes a lot more sense than the hopeful expectation that people are mostly rational. I do believe that even this body of work is missing in a trick in not encompassing the work on complex systems, emergent behavior, and particularly the importance of feedback loops. For instance, the heuristic ‘rule’ of “follow what your peers are doing” would explain why one person could do an irrational thing, and then other people follow. It does not immediately imply that everyone is irrational, more than the feedback loop is taking hold.
Sway is a great book and I recommend you take a look, whether rationally (it’s good for you) or irrationally ( I ask you to :).