Measurbation –shifting responsibility
Rory Sutherland often talks about measurbation as the obsession with metrics and the tendency of measuring objective reality, while the perceptual reality might be different.
He says that focusing on KPIs (key performance indications) is sometimes used as a way for offloading responsibility for making decisions – it has to do with loss aversion. People tend to go the whole length to avoid losses and acquiring gains become less important.
Being innovative and creative and maybe irrational has a certain element of risk and failure – subjective decisions carry the risk that you may be blamed for them – but it’s sometimes the only way to succeed and gain benefits. People love to fall back on mathematical formulae to duck responsibility for a decision – but these formulae rarely capture all the true drivers of human social behavior.
Next Revolution May Not Be Technological But It Could Be Psychological
It is possible, says Rory, that the next revolution may not be technological, it could be psychological. Better understanding of what people value, how they behave and how they choose could generate just about as much value as the invention of some new form of electronics and could massively improve the efficiency of business and government.
Understanding how the SCARF model works is very useful, too. The SCARF model was introduced by David Rock in 2008, and it’s a summary of important discoveries from neuroscience that involves five domains of human social experience: Status, Certainty, Autonomy, Relatedness and Fairness.
Status is about relative importance to others.
Certainty concerns being able to predict the future.
Autonomy provides a sense of control over events.
Relatedness is a sense of safety with others, of friend rather than foe.
Fairness is a perception of fair exchanges between people.
By understating what is important to a human being we can use technology to create new products and solutions. Take for example, Hailo, an application which allows you to find and book a nearby cab using a mobile phone, A Hailo app tells you exactly how long you need to wait for a cab, where is your cab, etc. Builders of this application understood perfectly well that certainty is the important factor in our life and that people are unhappy when they feel uncertain and that’s why of the reasons why this app is so popular.
Game Theory-Consistent brand building is more important than “going viral”
In game theory there are two separate things; there’s the short game where you just grab as much as you can immediately and the long game where you try and build up some sort of reputational currency.
The same counts in branding. Consistent brands have been investing in different kinds of advertisement for many years, and it is this upfront investment that tells customers that this brand is for a long game. It builds trust. If you spent a lot of money on reputation building, it is probably not in your interest to make a quick buck by selling something that is rubbish.
Consumers know this instinctively, and hence shrewdly pay a premium to buy from brands which have a reputation at stake.
Advertising and brand investment is a little like an engagement ring. Think about it this way: if all I were planning a one night stand it is unlikely that I would have invested money in buying jewelry upfront: jewelry is a commitment device – upfront expense as proof of long-term commitment. it means you are there for long term, so it inspires trust in your motives. The same counts for branding.
Rory Sutherland is really a great thinker and speaker; don’t hesitate to attend events where he will be presenting his ideas.