TEDBlog December, 2011 Archive
08 December 2011
Listen to creative people: Q&A with Rory Sutherland
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Advertising impressario Rory Sutherland has given TEDTalks on the general life lessons to take from advertising, and the incredible importance of seemingly small details for producing big results. Now, he’s released “Rory Sutherland: The Wiki Man,” a collection of essays and interviews on the art, science, and life of advertising. TED’s Ben Lillie called him in London to talk about his take on new developments in psychology, and how his insights can be applied to the current state of the economy.
You’re a big fan of the new science of behavioral economics.
Enormously, yes.
Given how complicated and hard-to-understand humans are, how do you tell that the new science is, in fact, doing a better job? Is there a real way to tell that?
Well, first of all, I suppose you might argue that if all it does is challenge the old science, it’s worthwhile in that.
Because what it will do, it will prevent what I call dumb assumptions being made. In many cases, I think that people in business assume that people behave in ways defined by neoclassical economics, with individual rational actors going around and trying to maximize utility. Now, that leads to a definition of value creation that has very little to do with what people actually value. And that may cause extraordinary misdirection of investment, expenditures, and so forth. If you can just encourage people to actually consider the psychological angle a little bit more, and consider the behavioral economic angle …
If you think of the billions, for example, spent on the high-speed rail, it’s based on an assumption of value that may actually have nothing to do with what human beings actually value about taking a journey, or what discourages human beings from taking a journey. It’s based on an assumption made by a load of engineers—who secretly, you know, actually like engineering solutions, we have to be candid here—if you’re an engineer, you’re more likely to come up with a solution that involves building enormous great train tracks than you are to come up with a solution that involves, say, some sort of neat psychological manipulation, or better customer service, or better ordering processes for train tickets, all that.
So you get to what I think is the dangerous point, which is that, in a way, the people, you know—we’ve developed a society where actually, people are allowed to define human problems without, actually, any reference to human beings at all. And that, that rubs me a little bit.
My contention is simply that what you’re doing by spending 24 billion is you’re reducing the duration of the only part of the journey which isn’t crap! Everything about a train journey is crap: getting to the station is crap, getting through the station is shit, buying your ticket is fucking awful; everything about it is awful except for when you actually sit on the train and look out the window. That bit’s okay. You know, if you put wi-fi and TV on, that’s pretty much what you’d be doing at home anyway. Okay? I don’t really have a problem with that bit at all. It doesn’t really matter if it’s three hours or one-and-a-half. Really. Who cares?
My second example is, if you take the train travel example, okay. If you work in any sort of creative industry: if you’re a copywriter, or you’re, you know, an inventor, if you’re in any kind of creative process, it’s absolutely assumed that you have to present your thinking to people who are much more rational and practical than you. Does it stack out, what are the cost benefits, blah-de-blah-de-blah. Okay?
Now, that’s kind of all right. However, what’s interesting is, it never happens the other way around. If you’ve got a bunch of rational people, like engineers, sitting there, deciding, “What I think we’ll do is spend 24 billion to increase the speed of trains through London and Birmingham.” What interesting is that no one ever asks those people and says, “Okay. Well, you’ve done all your rational work, but before we allow you to go and put that into practice, let’s just show your solution to loads of wacky crazy people to see if they can come up with something better.”
So what you have is evidence of a double standard. You have an example where you have a double standard where crazy people have to present their work to rational people, but this does not apply the other way around.
Do you buy that argument, that you should just as soon temper rational thinking as you do crazy thinking? The same should apply backwards.
Absolutely. And I’m wondering if you see this changing, with more attention focused on the creative design aspects of technology, with Apple and companies like that.
Well, the way I look at it is, the real sweet spot, which is if you find something which has a valuable economic insight, a psychological insight, and a technical insight behind it — if you can marry those three, you can really produce things Apple-style, which are remarkable. One of the best examples, which would embrace all three, is in the London Underground: the idea of putting dot matrix display boards to tell you how long you have to wait for a train. That’s an use of technology which is also extremely economical, in terms of improving the passenger experience, but it’s based on sort of brilliant psychological insight, which is that the pain of waiting for a train is more about the uncertainty than it is about the delay.
I think that’s a very important point, because I think you could easily go to someone, and they would have solved this problem by effectively making trains more frequent. Now, by the way, I’m not dismissing the engineering approach entirely; I think it has valuable potential. Let’s face it, engineering has done great, great things for humanity over the last few centuries. But if you look at the typical board of directors nowadays, that is pretty much a group of people who are extraordinarily adept at reading a balance sheet. There is no one on a board of directors who represents what you might call the psychological side of problem solving.
And by psychological people, are you looking for people trained in behavioral economics, or more flat-out artistic creative types?
To be absolutely honest, I think that I would favor a few very good academics from a behavioral economics background. There’s a—possibly the first person you might put on the board is a good marketing director, who has a very good understanding of behavioral economics. Someone should be there on board level whose job is to question the assumptions of the prevalent financial, logical model.
Let me continue a point: Actually quite a lot of things are counterintuitive, in many ways. Metrics are also dangerous because, in particular, with relation to humans, very few metrics are linear. If you have anything involving either groups of people or networks of people, or just human stuff in general, you may, for example, notice that there’s a huge difference in personal satisfaction, in changing a train service from hourly to half hourly. You may also notice there’s a big improvement in satisfaction between getting it down from half hourly to, let’s say, every 20 minutes. However, what you will probably find, then, is that beyond that point, not necessarily that point, but beyond some point, it becomes pretty much irrelevant. See, quite a lot of metrics in terms of human psychology and satisfaction and value, are actually non-linear. I’m very intrigued to see that actually a lot of companies are spending a fortune on things they believe to be valuable, which consumers don’t value very much at all. I did a very interesting exercise here, which—do you stay in hotels much?
Sometimes, yeah.
If you ask a room full of 200 people, “Do you know that business where you go to an expensive hotel and they try and take your luggage from you when your car arrives? Or as soon as you get to the door, the doorman tries to take your luggage? How many of you hate that?” About three-quarters of people hate it. The hotel’s presumably doing it partly so you can give a tip to the doorman, but partly really thinks that people value that. In reality, people don’t like it.
I think a lot of service organizations actually do fairly elaborate shit that, actually, people don’t want! The possibility, I think, to use new technology like smartphones and apps and so forth to absolutely streamline customer service to leave a hotel where you check in yourself, and they don’t bother you unless you specifically ask.
It’s very interesting to see how many really successful businesses and business ideas depend on some sort of psychological insight. McDonald’s had this great insight that people don’t want the best burger in the world; they want a burger that’s just like the one they had last time. We value consistency, predictability, and avoidance in disappointment more than we value perfection. I think that’s a very, very valuable insight, that in some ways gave rise to McDonald’s. The other thing that McDonald’s realizes is that, even though when you talk to people in research about food, they talk endlessly about the quality of the food, actually the speed of delivery is probably more important than most people would say. Instant gratification is more important to us than we’re willing to admit. I think that’s another McDonald’s insight.
You could equally look at something like yield management, which is one of the most important ideas in the past fifty years. Which is the business where you have perishable goods, in particular airline seats, train seats, etc., and you sell them off at highly variable prices in order to marry demand with supply and maximize the value.
The interesting point about that, is that requires technology: Yield management’s been made much more possible by the web, because I can actually look at forty-seven different possible flights and decide which combination of departure time, departure date, and price suits me best. I couldn’t do that, really, over the phone, talk to a travel agent. The conversation would become unbelievably tedious, you know. You’d have to be on the phone saying, “And would it be all right if I went on Wednesday via Pittsburgh.” Basically, at that point, human embarrassment is going to take over a problem. It also depends on human permission. Forty years ago, or even twenty-five years ago, if you were sitting on a plane next to somebody, and you discovered they’d paid less than you had, you’d blame the airline. Now you blame yourself.
Now, that in itself is a very, very important business process that’s been made possible by, to some extent, psychological progress into the human understanding of price. Originally, the system was the later you book, the less you paid. Now, of course, it’s the earlier you book, the less you pay— it’s actually not as simple as that by any means, but because there’s a certain rule to it that’s individually transparent and comprehensible, people tend to accept it.
You talk in your book a lot about how a lot of these problems are basically social anxieties.
(more…)
08 December 2011
Get happy: New TED Book on the mystery and magic of smiling
How can something as simple as a smile be so deceptively complex? That’s the mystery and magic explored in Smile: The Astonishing Powers of a Simple Act, a new TED Book by Ron Gutman about the sensation and science of the smile. From the broad beaming grin of a toddler to the oily smirk of a used car salesman, smiles convey an enormous range and depth of emotions. Grins also have radically varied meanings in different cultures, as the author learned during his many worldwide trips to explore the complicated but ubiquitous act of smiling. We recently spoke with Gutman about his book.
Why is smiling so important?
Smiling is central to what makes us human. We’re the only species that smiles, and we do it from birth. It has an immense impact on how we feel, because smiling triggers our biological pleasure receptors. It also positively impacts how others see and perceive us, and can be a powerful way to improve social situations. Best of all, smiling is important because it’s natural, always available, and easy.
How long have people been researching the act of smiling?
In the book I mention a French neurologist Guillaume Duchenne, whose research in the mid 1800′s was focused on the different types of facial expressions, including smiles. Duchenne created an extensive catalogue of smiles and other facial expressions, but found one in an entirely different class from all the others. He called it the “genuine” smile—the smile that arrives spontaneously and reflects pure delight. Duchenne also inspired Charles Darwin to conduct research into smiling. Darwin detailed the early smiling behavior of his own children and wrote the facial feedback response theory, which noted that facial expression intensified emotion, and the suppression of facial expression lessened emotional response.
You’ve traveled the world quite a bit talking about this. Have you discovered cultural differences in relation to smiling?
When you are in a new place, where you don’t speak the language and don’t have a knowledge of the cultures and customs, you’re left with what’s universal and what transcends the things that make us different. Smiling is one of those great unifiers. Still, it’s still subject to regional norms. Different cultures are more or less accepting of smiles in different situations. For example, in the United States, smiling at strangers is commonplace. In some other countries, however, smiling at a stranger might arouse suspicion. But, generally, we’re all likely to smile for the same reasons: we’re happy.
Does a smile have to be real to be effective? The nervous counterfeit smile of Miss America, for instance, seems to go a long way.
Smiles are highly effective in activating the reward mechanisms of our brains, so even forced smiles, the so-called “social” smile, can be effective at communicating. But they don’t offer the truly great effects that genuine smiles. The full spectrum of the benefits of smiling are found in real, genuine, big smiles. These are the ones that make us feel great inside, and make others around us smile. They make us look not just friendly in the eyes of others, but also competent. As studies examining the health and well-being benefits of smiles show, the real benefits are reserved for real smiles.
Can someone smile too much? I’m thinking of the creepy smirk of a used-car salesman.
There’s no such a thing as too much genuine smiling. The beautiful thing about smiles is that we are hardwired to detect smiles that are genuine and smiles that aren’t. We know that we can trust genuine smiles, but we don’t have the same feelings about fake smiles. There’s a bunch of research that I’m mentioning in the book that shows how we detect the authenticity of smiles, and they’re mostly based on mimicking the smiler to experience the same feelings and emotions she/he does. So smile much, smile often, and smile genuinely.
Smile: The Astonishing Powers of a Simple Act is part of the TED Books series, which is available for the Kindle and Nook as well as on Apple’s iBookstore.
06 December 2011
TED Prize 2012 goes to … The City 2.0
For the first time in the history of the TED Prize, it is being awarded not to an individual, but to an idea. It is an idea upon which our planet’s future depends:
The City 2.0.
The City 2.0 is the city of the future… a future in which more than ten billion people on planet Earth must somehow live sustainably.
The City 2.0 is not a sterile utopian dream, but a real-world upgrade tapping into humanity’s collective wisdom.
The City 2.0 promotes innovation, education, culture and economic opportunity.
The City 2.0 reduces the carbon footprint of its occupants, facilitates smaller families and eases the environmental pressure on the world’s rural areas.
The City 2.0 is a place of beauty, wonder, excitement, inclusion, diversity, life.
The City 2.0 is the city that works.
The TED Prize grants its winner $100,000 and “one wish to change the world.” How will this prize be accepted on behalf of the City 2.0? Through visionary individuals around the world who are advocating on its behalf.
We are listening to them and giving them the opportunity to collectively craft a wish. A wish capable of igniting a massive collaborative project among the members of the global TED community, and indeed all who care about our planet’s future. (Individuals or organizations who wish to contribute their ideas to a TED Prize wish on behalf of The City 2.0, please write to tedprize@ted.com.)
The wish will be unveiled on February 29, 2012, at the TED Conference in Long Beach, California. On a Leap Year date, we have a chance, collectively, to take a giant leap forward.
Learn more about The City 2.0 >>
06 December 2011
Massive-scale online collaboration: Luis von Ahn on TED.com
After re-purposing CAPTCHA so each human-typed response helps digitize books, Luis von Ahn wondered how else to use small contributions by many on the Internet for greater good. At TEDxCMU, he shares how his ambitious new project, Duolingo, will help millions learn a new language while translating the Web quickly and accurately — all for free. (Recorded at TEDxCMU, April 2011, in Pittsburgh, PA. Duration: 16:40)
Watch Luis von Ahn’s talk on TED.com, where you can download it, rate it, comment on it and find other talks and performances from our archive of 1,000+ TEDTalks.
02 December 2011
Don’t regret regret: Kathryn Schulz on TED.com
We’re taught to try to live life without regret. But why? Using her own tattoo as an example, Kathryn Schulz makes a powerful and moving case for embracing our regrets. (Recorded at TEDSalon NY 2011, November 2011, in New York, New York. Duration: 16:51)
Watch Kathryn Schulz’s talk on TED.com, where you can download it, rate it, comment on it and find other talks and performances from our archive of 1,000+ TEDTalks.
01 December 2011
TED Book maps a new age of creativity and invention: “Launching the Innovation Renaissance”
Build a better mousetrap, the adage goes, and the world will beat a path to your door. That may sound good if you’re into killing small rodents—and many are: more than 4,400 patents for new mousetraps have been issued by the US Patent and Trademark Office—but in the rough-and-tumble world of business, it’s not so easy to gain competitive advantage and customer satisfaction. Alex Tabarrok, professor at economics at George Mason University, says that only one thing will provide an edge: innovation. In response, Tabarrok has come up with a plan to launch a new “Innovation Renaissance,” powered by such diverse elements as patent reform and an educational overhaul. He maps it out in his exciting new TED Book: Launching the Innovation Renaissance: A New Path To Get Smart Ideas to Market Fast. We recently spoke with Taborrak about his new book.
Why do we need a new path to innovation? What’s wrong with the old path?
Economists tell us that the recession ended in 2009, but unemployment, fear, and fitful growth tell us that the economy is still stagnating. That’s because we have deeper problems that we need to examine. The only way to thrive is to innovate. It’s that simple. So a reexamination of the motivations, foundations, and achievements of our innovation policy is in order. That’s what Launching the Innovation Renaissance is all about. None of us can rest on our past accomplishments.
How much of a roadblock is the patent system?
Rather than a roadblock, I’d said the current patent system is a thicket. It’s a thorny bramble of regulation and litigation that is slowing things down. Isaac Newton famously said that if he had seen further than others it was only by “standing on the shoulders of giants.” Today, Newton would have to pay dearly for that privilege and, as a result, I don’t think he would have seen so far.
Are patents even necessary?
Patents are like fertilizer. Applied wisely and sparingly, they can increase growth. But if you apply too many chemicals, or make patents too strong, then you can leach the land, making growth more difficult. We definitely need some serious patent reform to prune back the thicket and make more growth possible. Let’s consider one of the most important and innovative firms today. This company has revolutionized its industry and done more than any other for the American consumer. No, it’s not Apple. The iPad is cool but over the last several decades the most important and productive firm has been Walmart. In fact, Walmart alone was responsible for a large share of the productivity improvements in the late 1990s. Walmart is a very innovative firm but it holds almost no patents—only about 60 in total, including one for a convertible shoe box. In fact, most innovations in most industries are not patented, and many industries are innovative with few or no patents; fashion and jazz for example. So patents aren’t necessary for innovation.
What else can be done to spur innovation?
The most important is education. Consider the following: A typical worker will work for about 30 years, most US workers are educated in public schools, and a majority of GDP is worker compensation. So even a small improvement in education benefits a lot of workers for a long period of time. In this way even a small improvement in education can create trillions of dollars worth of value. It’s hard to think of another policy where small changes can be worth trillions of dollars.
But improving education isn’t easy. Many have tried and failed.
Getting better teachers into the classroom is incredibly important. It’s interesting to me that this approach is neither a left- nor right-wing approach. In contrast with many pundits on the right, though, I think cutting teacher salaries is nuts. We should pay teachers more, perhaps even a lot more if this means we can improve teacher quality. In contrast with many on the left, however, I think we need to test teachers in a better way and to use that information in hiring, firing, pay, promotion and training decisions. We do almost none of that now, and that is a scandal.
What is at stake if we don’t launch a new Innovation Renaissance?
It used to be that almost all innovation came from the U.S. and a small number of other developed countries. That’s no longer the case, and as China and India grow it’s changing even more. Expect a lot more Chinese and Indian Nobel prizes in the future. Our relative status in the world is falling. Some people see this as pessimistic. But, overall, I am optimistic about this change. You know, it would be really great if I discovered a cure for cancer ,but it would only be a little bit less great if my neighbor did. So I am pretty happy when my neighbor becomes wealthier, better educated and more innovative. I feel the same about China and India.
Launching the Innovation Renaissance is part of the TED Books series, which is available for the Kindle and Nook as well as on Apple’s iBookstore.
01 December 2011
18 ideas that will shape 2012: Counting down TEDTalks on Huffington Post
Today, TED and The Huffington Post are launching a year-end collaboration around 18 groundbreaking ideas that premiered on TED.com in 2011 and may very well reshape the world in 2012. For 18 days, The Huffington Post will count down these big ideas from TED in a list curated by Chris Anderson, with essays from each speaker exploring the idea they came to TED (or a TEDx) to share with the world. Bloggers from The Huffington Post are invited to write about the idea’s world-changing potential as we look toward the New Year.
Head to The Huffington Post’s TED in 2011 page to:
+ Watch each TEDTalk in high-res video
+ Explore the ideas behind the talk through an essay from the speaker and posts from HuffPost bloggers.
+ Join in conversation about the idea’s relevance as we look ahead to 2012.
And follow the countdown on Twitter using the #18ideas hashtag.
Throughout the month, you can follow the countdown from featured blogs on the home page of Huffington Post or by clicking TED in the main navigation.
Read Chris Anderson and Arianna Huffington’s introduction to the countdown >>
Explore the first idea >>
01 December 2011
Building the musical muscle: Charles Limb on TED.com
Charles Limb performs cochlear implantation, a surgery that treats hearing loss and can restore the ability to hear speech. But as a musician too, Limb thinks about what the implants lack: They don’t let you fully experience music yet. (There’s a hair-raising example.) At TEDMED 2011, Limb reviews the state of the art and the way forward. (Recorded at TEDMED 2011, October 2011, in San Diego, California. Duration: 16:00)
Watch Charles Limb’s talk on TED.com, where you can download it, rate it, comment on it and find other talks and performances from our archive of 1,000+ TEDTalks.
Learn more about our content partner TEDMED >>
Watch more talks from our friends at TEDMED on TED.com >>
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