Billion dollar behaviours – Rory Sutherland

Summary

In this thought-provoking video, the speaker challenges the tendency to settle for simple explanations, emphasizing the importance of asking 'why' instead of just 'what.' Using examples from commemorative benches, retail sales, and transportation, the speaker illustrates how behavioral science can uncover deeper insights and drive creative solutions. By questioning assumptions and reframing problems, businesses and individuals can unlock innovative approaches to solving complex issues. The speaker advocates for more speculative, exploratory thinking and behavioral science-driven decision-making to foster true creativity and better outcomes.

Takeaways

• 😀 Social media is often oversaturated with opinions without useful solutions, and a potential solution could involve creating a platform where each opinion must be accompanied by a practical contribution to society before it can be published.
• 😀 The abundance of commemorative benches in Deal contrasts with the lack of seating at London's expensive London Bridge Station, highlighting a mismatch between needs and availability of resources.
• 😀 Commemorative benches often pose a logical problem: if someone loved sitting in a spot, they likely already had a seat, thus not needing another bench there, whereas spaces without seating should be prioritized.
• 😀 Billionaire success can often be attributed to behavioral science rather than technological innovation alone, suggesting that understanding human behavior is key to success in business.
• 😀 Businesses often focus on quantifying 'what' happens rather than exploring the deeper 'why' behind actions, which limits creativity and innovation.
• 😀 The 'lazy why' phenomenon refers to the tendency to settle for the first plausible explanation for something, rather than considering multiple causes and deeper insights.
• 😀 Behavioral science could lead to breakthroughs not only in consumer behavior but also in understanding institutional and collective behavior, which is often overlooked.
• 😀 In sales, a combination of lower prices, scarcity value, and social proof explains why sales events are successful, showing that human behavior is influenced by multiple factors beyond price alone.
• 😀 The concept of '50% extra free' offers shows that consumer behavior may be driven more by the perception of a deal than by actual savings, a realization that businesses sometimes stumble upon by accident.
• 😀 The 'lazy why' approach to problem-solving in business leads to misdirected efforts and missed opportunities for creativity, emphasizing the need for deeper exploration into causality and explanations.
• 😀 David Metz's research into transport behavior challenges the traditional assumption that people want faster transport merely to save time, revealing that people often use faster transport to maximize their opportunities for travel, work, and leisure.
• 😀 Understanding alternative 'whys' behind decisions in business and life can open up new creative solutions and avoid the trap of oversimplifying complex human behavior, allowing for more innovative approaches.

Q & A

What is the main idea behind the speaker's suggestion for improving social media?

The speaker proposes creating a new social media platform where every opinion posted must be accompanied by a useful solution. Only after receiving enough votes for the solution, the opinion would be published. This would add a level of accountability and usefulness to expressing opinions.

What is the problem the speaker identifies with commemorative benches in Deal?

The speaker argues that commemorative benches often honor people who loved sitting in places that already had benches, creating an imbalance in public seating. In contrast, places like London Bridge station, which are crowded and lack seating, are ignored in favor of commemorating spots that were already furnished.

How does the speaker connect behavioral science to the success of tech companies?

The speaker highlights an epiphany shared by behavioral scientist John Kenny, who observed that the success of tech companies like Google and Facebook is more often explained by behavioral science rather than just technology. Behavioral science helped these companies understand human decision-making and optimize their products accordingly.

What is meant by the 'lazy why' mentioned in the script?

The 'lazy why' refers to the tendency to accept the first plausible explanation for something and move on without further investigation. The speaker criticizes this approach, suggesting that more effort should be invested in understanding the underlying causality and multiple potential reasons for a phenomenon.

How does the speaker differentiate between 'what' and 'why' in business decision-making?

The speaker points out that businesses tend to focus heavily on 'what' (quantifying data and measuring outcomes), but spend less time exploring 'why' something is happening. Understanding the deeper reasons ('why') can lead to more innovative solutions and insights, while focusing solely on 'what' often limits creativity.

How does the example of sales illustrate the importance of asking 'why' in understanding human behavior?

The example of sales highlights that while the lower prices in a sale are a valid explanation for increased demand, there are other factors at play, such as scarcity, social proof, and the sense of urgency. By understanding the 'why' behind the sales, businesses can uncover a more nuanced view of consumer behavior beyond just price reductions.

What is the significance of 'Dobzhansky's law' as referenced in the script?

Dobzhansky's law in evolutionary science states that 'nothing in biology makes sense except in the light of evolution.' The speaker extends this idea to business, suggesting that nothing in business makes sense unless viewed through the lens of behavioral science. This perspective is crucial for understanding complex human behavior and decision-making.

How does the speaker suggest transportation policy has been misguided for decades?

The speaker explains that for decades, transportation policy has assumed that people want faster transportation primarily to save time. However, research by Dr. David Metz revealed that people actually use faster transportation to travel further, increasing opportunities rather than simply saving time. This insight could lead to more thoughtful and effective transportation solutions.

What is the speaker's stance on how businesses should approach data collection?

The speaker criticizes the overemphasis on data collection and quantification in business, suggesting that it is often done without exploring causality or alternative explanations. The speaker believes that more attention should be paid to understanding the 'why' behind data, as this can uncover deeper insights and more creative solutions.

Why does the speaker believe that behavioral science has yet to reach its full potential in business?

The speaker believes that while behavioral science has been widely applied to understand individual consumer behavior, its true potential lies in understanding social and institutional behavior. By applying behavioral science to these areas, businesses can better understand collective decision-making and improve organizational effectiveness.