The Diary Of A CEO (Steven Bartlett)
Praise for The Diary Of A CEO
‘I’ve watched Steven Bartlett’s journey from the start, always knowing he had that raw, fiery spark. Seeing him harness it. seeing him succeed, damn, it fills me with pure, undiluted pride. I’m on the sidelines, cheering him on, because this guy embodies the entrepreneur’s spirit.’
Gary Vaynerchuck, author of Twelve and a Half
‘Steven Bartlett has overcome seemingly insurmountable odds to become a mega-successful serial entrepreneur. Along the way, he has learned some valuable lessons about the importance of following a different and unconventional path to power, synthesizing his experience into practical laws that will challenge and guide you in the harshly competitive world we live in.’
Robert Greene, bestselling author of Mastery
‘Weaving the latest research, his own experiences, and captivating stories, Steven guides readers to redefine success and achieve their potential. This is a must-read for anyone dreaming of doing something audacious.’
Jay Shetty, New York Times bestselling author and award-winning host of On Purpose
‘Surprising and persuasive in equal measure. Steven’s advice will supercharge your chances of achieving your biggest dreams.’
Marie Forleo, author of the #1 New York Times bestseller Everything Is Figureoutable
‘From “never disagree” to “don’t attack beliefs, inspire new ones,” this book contains surprising wisdom that will move you forward personally and professionally. I highly recommend.’
Scott Galloway, Professor of Marketing at NYU Stern School of Business and author of Adrift
‘It’s about time that we read about success in our modern world as seen by one who’s navigated the path to success like no other. Intelligent, insightful, and real. I am humbled by how much I learned from Steven’s work.’
Mo Gawdat, bestselling author and founder of OneBillion Happy
‘There is a new breed of CEO taking over the business world. The blustery, chest beating CEOs who act like they make no mistakes are being replaced by CEOs who talk about their feelings, lead with curiosity and are willing to work on themselves…and Steven Bartlett is leading the revo- lution! The Diary Of A CEO is an essential companion for any leader who wants to take themselves on and lead us into the next generation.’
Simon Sinek, Optimist and New York Times bestselling author of Start with Why and The Infinite Game
INTRODUCTION:
WHO AM I TO WRITE THIS BOOK?
I’ve been the CEO, founder, co-founder or board member of four industry-leading companies that collectively – at their peaks – reached a cumulative valuation of more than $1 billion.
I’m currently the founder of Flight Story, an innovative marketing agency; thirdweb, a software company; and an investment fund called Flight Fund.
My companies have employed thousands of people in every corner of the world. I’ve raised almost $100 million of investment for my companies.
I’m an investor in more than 40 companies. I’m on the board of four companies, two of which are currently at the forefront of their respective industries, and I’m 30 years old.
Being the founder of two successful marketing groups that have risen to the top of their industry, within their market, has meant that I spend much of my professional life in boardrooms working with and advising the CEOs, CMOS and leaders of the biggest brands in the world on how to do marketing and how to tell their story online; Uber, Apple, Coca-Cola, Nike, Amazon, TikTok, Logitech, you name it – they have been my clients.
Additionally, I’ve spent the last four years interviewing the world’s most successful individuals from business, sports, entertainment and academia. I have 700 hours of recordings where I’ve interviewed your favourite authors, actors and CMOs; the world’s leading neuroscientists; the captain of your favourite sports team; the manager of your favourite sports team; the CEOs of the billion-dollar companies you use every day; and more of the world’s leading psychologists than I could possibly name.
I published these conversations in the form of a podcast called The Diary Of A CEO, and that podcast quickly became the most downloaded podcast here in Europe and one of the top business podcasts in the USA, Ireland, Australia and the Middle East. It is arguably one of the fastest-growing podcasts in the world right now, increasing its listenership by 825 per cent last year alone.
I’ve been lucky enough to be exposed to some unique experiences, and a few years ago it dawned on me how much valuable and powerful information I’ve gained and only a handful of people on earth have access to that information. I also realised that at the very heart of all the success and fail- ure I’ve seen, both in my own entrepreneurial journey and the hundreds of interviews I’ve conducted, were a set of laws that could stand the test of time, transfer to any industry, and be used by anyone who is trying to build something great or become someone great.
This is not a book about business strategy. Strategy changes like the seasons. This is a book about something much more permanent. This is a book about the fundamental, enduring laws of building great things and becoming great yourself.
These laws can be used by anyone, regardless of your industry or occupation.
These laws will work now or 100 years from now.
These laws are rooted in psychology, science and centuries of research, and to further validate these laws I surveyed tens of thousands of people across every continent, every age group and every profession.
The design of this book is based on five core beliefs:
- I believe most books are longer than they need to be.
- I believe most books are more complicated than they need to be.
- I believe pictures paint a thousand words.
- I believe stories are more powerful than data, but both are important.
- I believe in nuance and that the truth is often somewhere in the middle.
In short, it aims to embody a quote often attributed to Einstein:
‘Everything should be as simple as possible, but not simpler.’
To me, this means giving you the fundamental truth and understanding of each law, in the exact number of words necessary to do so no less, no more and using power- ful imagery and incredible real stories to bring the key points to life.
★ THE FOUR PILLARS OF GREATNESS
Becoming great, and building great things, requires mastery within four pillars. I call these the four pillars of greatness.
PILLAR I: THE SELF
As Leonardo da Vinci asserted, ‘One can have no smaller or greater mastery than mastery of oneself; you will never have a greater or lesser dominion than that over yourself; the height of your success is gauged by your self-mastery, the depth of your failure by your self-abandonment. Those who cannot establish dominion over themselves will have no dominion over others.’
This pillar is about you. Your self-awareness, self-control, self-care, self-conduct, self-esteem and self-story. The self is the only thing we have direct control over; to master it, which is no easy task, is to master your entire world.
PILLAR II: THE STORY
Everything that stands in your way is a human. Science, psychology and history have shown that there is no graph, data or information that stands a greater chance of positively influencing those humans than a truly great story.
Stories are the single most powerful weapon any leader can arm themselves with – they are the currency of human- ity. Those who tell captivating, inspiring, emotional stories rule the world.
This pillar is about storytelling and how to harness the laws of storytelling to persuade the humans that stand in your way to follow you, to buy from you, to believe you, to trust you, to click, to act, to hear you and to understand you.
PILLAR III: THE PHILOSOPHY
In business, sports and academia, an individual’s personal philosophies are the single biggest predictors of how they’ll behave, now and in the future if you know someone’s philosophy or beliefs, you can accurately forecast how they’ll behave in any situation.
This pillar is about the personal and professional philosophies that great people believe and live by and how those philosophies result in behaviour that leads to greatness. Your philosophy is the set of beliefs, values or principles that guide your behaviour – they are the fundamental beliefs that underpin your actions.
PILLAR IV: THE TEAM
The definition of the word ‘company’ is ‘group of people’; at its essence, every company, project or organisation is just a group of people. Everything the organisation produces, good or bad, originates from the minds of the members of your group of people. The most important success factor in your work is who you choose to work with.
I’ve never seen anyone build a great company, project or organisation without a group of people, and I’ve never seen anyone reach personal greatness without the support of a group of people.
This pillar is about how to assemble and get the best out of your group of people. Assembling any group of people is not enough; for your group of people to become a truly great team, you need the right people, bound together by the right culture. When you have great people bound by a great culture, the whole team becomes greater than the sum of its parts. When 1 + 1 = 3, great things happen.
PILLAR I THE SELF
LAW 1
FILL YOUR FIVE BUCKETS IN THE RIGHT ORDER
This law explains the five buckets that determine your human potential, how to fill them and, crucially, in which order you should fill them.
My friend David was in the front garden of his home, enjoying his morning espresso, as a sweaty, confused-looking, panting man in tired gym attire jogged towards him slowly.
The jogging man paused in his stride and greeted my friend David as he struggled to catch his breath. He cracked an unintelligible joke, appeared to laugh frantically at it, then began erratically talking about the spaceship he was building, the microchips he was going to put in monkeys’ brains, and the AI-powered house robots he was going to create.
Moments later, the jogging man said goodbye to David, and continued his slow, sweaty trudge down the street.
That sweaty jogging man was Elon Musk. Billionaire founder of Tesla, SpaceX, Neuralink, OpenAI, Paypal, Zip2 and The Boring Company.
Before I revealed the identity of the sweaty jogging man, you may have understandably assumed he was an escapee of the local psychiatric facility, or suffering from some psychotic break. But once you heard his name, all those extraordinary aforementioned ambitions suddenly became believable.
So believable, in fact, that when Elon tells the world of his ambitions, people will blindly give billions of dollars of their children’s inheritance to back him, they’ll quit their jobs and relocate to work for him, and they’ll pre-order his products before he’s even created them.
This is because Elon has filled his five buckets in fact all of the people I’ve met that possess the power to build truly great things have five brimming buckets.
The sum of these five buckets is the sum of your profes- sional potential. The fullness of these buckets will determine how big, believable and achievable your dreams are to you, and to those that hear them.
Those that achieve great things have spent years, often decades, pouring into these five buckets. Someone fortunate enough to have five full buckets has all the potential needed to change the world.
When you’re seeking employment, selecting the next book you want to read or deciding what dream to pursue, you must be aware of how full your buckets are.
★ THE FIVE BUCKETS
- What you know (your knowledge)
- What you can do (your skills)
- Who you know (your network)
- What you have (your resources)
- What the world thinks of you (your reputation)
What you know
What you can do
Who you know.
What you have
What they think of you.
At the start of my career, as an 18-year-old start-up founder, I was haunted by a moral question that I couldn’t seem to shake: is focusing my time and energy on building a company (which would ultimately enrich me) a more noble pursuit than going back to where I was born in Africa and investing my time and energy in saving even one life?
This question remained at the front of my mind for several years until one chance encounter in New York granted me some much-needed clarity. I attended an event hosted by Radhanath Swami, a world-renowned guru, monk and spiritual leader, at an event he was holding in New York.
As I squeezed in among a sea of Swami’s mesmerised followers, who were starry-eyed and hanging on to his every word in a perfectly still, appreciative silence, the guru asked if anyone in the crowd had a question for him.
I raised my hand. The guru gestured at me to deliver my question. I asked, ‘Is building a business, and enriching myself, a more noble pursuit than going back to Africa to try and save lives?”
The guru stared at me as if he could see into the depths of my soul, and after a long, blinkless pause he proclaimed: ‘You cannot pour from empty buckets.’
Almost a decade on from that moment, it’s never been clearer what the guru meant. He was telling me to focus on filling my own buckets, because someone with full buckets can positively bend the world in any way he or she desires.
Having now built several large companies, worked with the biggest organisations in the world, become a multimillionaire, managed thousands of people, read hundreds of books and spent 700 hours interviewing the world’s most successful people, my buckets are sufficiently full. Because of this, I now possess the knowledge, skills, network, resources and reputation to help millions of people all over the world, which is exactly what I intend to spend the rest of my life doing, through my philanthropic work, the donations I make, the organisations I create, the media companies I build and the school I’m working to launch.
These five buckets are interconnected – filling one helps to fill another – and they are generally filled in order from left to right.
What you know.
What you can do.
Who you know.
What you have.
What they think of you.
We usually start our professional life acquiring knowledge (school, university, etc.), and when this knowledge is applied, we call it a skill. When you have knowledge and skills you become professionally valuable to others and your network grows. Consequently, when you have knowledge, skills and a network, your access to resources expands, and once you have knowledge, skills, a valuable network and resources, you will undoubtedly earn a reputation.
With these five buckets and their interconnected relationship in mind, it’s clear that an investment in the first bucket (knowledge) is the highest-yielding investment you can make. Because when that knowledge is applied (skill), it inevitably cascades to fill your remaining buckets.
If you truly understand this, you’ll understand that a job that pays you slightly more cash (resources), but gives you far less knowledge and fewer skills, is a lower-paying job.
The force that clouds our ability to act upon this logic is usually ego. Our ego has an incredible ability to persuade us to skip the first two buckets – convincing us to take a job simply for more money (bucket 4) or a job title, status or reputation (bucket 5), without the knowledge (bucket 1) or skills (bucket 2) to succeed in that role.
When we succumb to this temptation, we’re building our career on weak foundations. These short-term decisions your inability to delay your gratification, be patient and invest in your first two buckets will ultimately catch up with you.
In 2017, a very talented 21-year-old employee called Richard walked into my office and told me he had some news to share with me. He told me that he had been offered a job as CEO of a new marketing company halfway across the world, and that he wanted to leave my company where he had been flourishing to take it. He told me the role offered him an enormous pay rise (almost double what we paid him), an equity package and a chance to live in New York City – a far cry from the dreary village he was raised in and an apparent step up from Manchester, England, where he worked for my company.
To be totally frank, I didn’t believe him. I couldn’t fathom that a legitimate business would offer a junior employee, with no management experience, such a prominent role.
Nonetheless, I accepted his claims and told him that we would support him in his transition out of our company.
It turns out I was wrong – Richard was telling the truth. The job offer did exist and a month later he became CEO of the company, moved to New York and started his new life as a C-suite executive in the Big Apple, leading a team of more than 20 people, in a rapidly growing marketing start-up.
Unfortunately, that is not where the story ends; as life would come to teach both me and Richard, there is no skipping the first two buckets of knowledge and skills if you’re playing for long-term, sustainable results. Any attempt to do so is equivalent to building your house on sand.
Within 18 months, the once-promising company Richard had joined had gone under, lost its key employees, run out of money and become shrouded in controversy relating to management practices. After the company closed, Richard was unemployed, far from home, and searching for a new, more junior role, in the same industry that we had employed him in.
When deciding which path to take in life, which job to accept or where to invest your spare time, remember that knowledge, when applied (skill), is power. Prioritise filling those first two buckets and your foundations will have the long-term sustainability you need to prevail, regardless of how life’s tectonic plates move and shake beneath you.
I define a professional earthquake as an unpredictable career event that adversely impacts you. This could be anything: a technological innovation that disrupts your whole industry, being fired by your employer, or if you’re a founder, your company going under.
There are only two buckets that any such professional earthquake can never empty – it can take away your network, it can take your resources, it can even impact your reputation, but it can never remove your knowledge and it can never unlearn your skills.
These first two buckets are your longevity, your foundation and the clearest predictor of your future.
★ THE LAW: FILL YOUR FIVE BUCKETS IN THE RIGHT ORDER
Applied knowledge is skill, and the more you can expand and apply your knowledge, the more value you’ll create in the world. This value will be repaid in a growing network, abundant resources and a robust reputation. Make sure you fill your buckets in the right order.
Those who hoard gold have riches for a moment.
Those who hoard knowledge and skills have riches for a lifetime.
True prosperity is what you know and what you can do.
LAW 2
TO MASTER IT, YOU MUST CREATE AN OBLIGATION TO TEACH IT
This law explains the simple technique that the world’s most renowned intellectuals, authors and philosophers use to become the masters of their craft and how you can use it to develop any skill, master any topic and build an audience.
★ THE STORY
It felt like the entire population of planet Earth had gathered to watch me melt on stage that evening, but in reality, it was just a handful of my fellow secondary school pupils, their parents and a few teachers.
I was 14 years old and had been tasked with saying a few closing remarks at my school’s exam awards evening. As I walked out onto the stage, the auditorium fell into an anticipatory silence.
And there I stood, frozen, terrified and mute, for one of the longest minutes anyone has ever endured, staring down at the trembling piece of paper clasped between my clammy, nervous hands, on the verge of urinating into my own underwear, experiencing what people refer to as ‘stage fright’.
The script I had planned to deliver was shaking with such ferocity that I couldn’t see the words. Eventually I blurted out some improvised, clichéd, nonsensical remarks before darting off stage and out of the door as if I were being followed by a firing squad.
Fast-forward ten years from that traumatic day and I’m speaking on stage 50 weeks a year in every corner of the globe – I’m headlining alongside Barack Obama in front of tens of thousands in São Paulo, I’m speaking in sold-out arenas in Barcelona, I’m touring the UK and speaking at festivals from Kyiv to Texas to Milan.
★ THE EXPLANATION
I went from being a train wreck of a public speaker, to rubbing shoulders with some of the very best to ever do it, and there is one simple law that I credit with this transformation.
This law is not just responsible for my on-stage compos- ure, performance and delivery (my skills), it’s also the reason why I have something interesting to share while I’m on stage (my knowledge):
I created an obligation to teach.
The late spiritual leader Yogi Bhajan once said, ‘If you want to learn something, read about it. If you want to understand something, write about it. If you want to master something, teach it.’
At 21 years old, I made a promise to myself that every day at 7pm, I would write a tweet or make a video delivering a single idea, and then post it online at 8pm. 17
Of all the things I’ve done in my life to advance my knowledge and skills to fill my first two buckets this is the thing that made the most difference. It’s no exaggeration to say that it has completely changed the trajectory of my life, and consequently it’s the piece of advice I urge most strongly upon anyone looking to become a better thinker, speaker, writer or content creator.
The key factor here is that I made learning, then writing/ recording and sharing it online, a daily obligation, not just an interest.
SKIN IN THE GAME
Soon after creating this obligation, I got feedback in the form of comments from my audience and analytics from the social platforms; this helped me to improve, and in turn, created a community of people that were following me purely for this daily idea. This started as tens of people and almost ten years later that community has grown to almost 10 million follow- ers across all channels.
From the first idea I shared, I created a ‘social contract’ with my audience-essentially a social obligation to the people who were following me specifically for this daily idea – which motivated me to continue posting and gave me something to lose their attention and my reputation if I stopped.
Having something to lose is fundamentally what an obli- gation is, and having something to lose is sometimes referred to as having ‘skin in the game’.
‘Skin in the game’ is an important psychological tool to harness if you want to accelerate your learning curve in any area of your life. Having skin in the game raises the stakes of your learning by building deeper psychological incentives
to perform a behaviour. The ‘skin’ can be anything from money to a personal public commitment.
You want to learn more about a specific company? Buy a few shares of the stock. You want to learn about Web 3.0?
Buy an NFT. If you want to be consistent in the gym, make a WhatsApp group with your friends where you share your workouts every day. In these three examples, either mone- tary or social currency is at stake.
‘Skin in the game’ works because across several global studies it’s been demonstrated that human behaviour is more strongly driven by the motivation to avoid losses than to pursue gains, which is what scientists call ‘loss aversion’.
Give yourself something to lose.
orm cial da is S
★THE FEYNMAN TECHNIQUE REVISED
So, if you want to master something, do it publicly and do it consistently. Publishing your written ideas forces you to learn more often and to write more clearly.
Publishing a video forces you to improve your speaking skills and to articulate your thoughts. Sharing your ideas on stage teaches you how to hold an audience and tell captivat- ing stories. In any area of your life, doing it in public, and creating an obligation that forces you to do it consistently, will lead you to mastery.
One of the most valuable elements of this obliga- tion was having to distil any idea I wanted to share down to its 140-character essence, so that it could fit within the constraints of a tweet.
Being able to simplify an idea and successfully share it with others is both the path to understanding it and
the proof that you do. One of the ways we mask our lack of understanding of any idea is by using more words, bigger words and less necessary words.
This challenge of simplifying an idea to its essence is often referred to as the Feynman technique, named after the renowned American scientist Richard Feynman. Feynman won a Nobel Prize in 1965 for his groundbreaking work in quantum electrodynamics. He had a gift for explaining the most complex, baffling ideas in simple language that even a child could understand.
‘I couldn’t reduce it to the freshman level. That means we really don’t understand it.’
Richard Feynman
The Feynman technique is a powerful mental model for self-development. It forces you to strip away unnecessary complexity, distil a concept to its purest essence, and develop a rich, in-depth understanding of whatever discipline you seek to master.
The Feynman technique follows a few key steps, which I’ve simplified and updated based on my own learning experience:
STEP 1: LEARN
First you must identify the topic you want to understand, research it thoroughly and grasp it from every direction.
STEP 2: TEACH IT TO A CHILD
Secondly, you should write the idea down as if you were teaching it to a child; use simple words, fewer words and simple concepts.
STEP 3: SHARE IT
Convey your idea to others; post it online, post it on your blog, share it on stage or even at the dinner table. Choose any medium where you’ll get clear feedback.
STEP 4: REVIEW
Review the feedback; did people understand the concept from your explanation? Can they explain it to you after you’ve explained it to them? If not, go back to step 1; if they did, move on.
☆☆
As we look over history, this is the one thing that every great speaker, renowned author and prominent intellectual I’ve ever encountered or interviewed has in common.
When Prospect magazine released their list of the top 100 modern intellectuals, every name on the list followed this law.
When I researched the pre-eminent philosophers from history, every single one of them embodied and were often staunch advocates of this law.
At some point in their life, through intention or accident, they had created an obligation to think, write and share their ideas, consistently.
Whether it’s leading modern authors like James Clear, Malcolm Gladwell or Simon Sinek who write tweets, online blogs and create social media videos, or ancient philosophers
like Aristotle, Plato and Confucius, who wrote on papyrus scrolls and spoke on stages, they all abide by this crucial law, all of them have created an obligation to teach, and in turn they’ve become masters of both knowledge and delivery.
‘The person who learns the most in any classroom is the teacher.
James Clear
★THE LAW: TO MASTER IT. YOU MUST CREATE AN OBLIGATION TO TEACH IT
Learn more, simplify more and share more. Your consistency will further your progress, the feedback will refine your skill and following this law will lead to mastery.
You don’t become a master because you’re able to retain knowledge.
You become a master when you’re able to release it.
The Diary Of A CEO
LAW 3
YOU MUST NEVER DISAGREE
This law will make you a master of communication, negotiation, conflict resolution, winning arguments, being heard and changing people’s minds. It also explains why most of your arguments are never productive.
THE STORY
SN
For most of my childhood I witnessed my mother shouting heatedly at my father as he sat watching TV, apparently completely oblivious to her presence. These ear-piercing screaming marathons were like nothing I’d ever witnessed before and nothing I’ve witnessed since.
She could shout at him for five or six hours about the same thing – using the same words, without any apparent reduction in volume or enthusiasm. On occasion, my father might try and argue back for a brief moment, and when he inevitably failed to land his rebuttal, he would either continue to ignore her or flee to another part of the house, lock himself in his bedroom, or jump in the car and drive off.
It took me 20 years to realise that I’d learned this exact conflict-resolution strategy from him, while I was lying in bed at 2am as my angry girlfriend badgered me, on repeat, about something she was unhappy about. I rebutted her with
‘I disagree’ and attempted to make a convincing counter- argument. Needless to say, I failed. Like throwing petrol onto a bonfire, she carried on shouting at me with increased volume, making the same point, using the exact same words.
Eventually, I got up and tried to leave, and she followed me, so I locked myself inside my walk-in wardrobe, where I remained until almost 5am, being shouted at through the door – about the same thing, using the same words, like a broken record player without any apparent reduction in volume or enthusiasm.
She’s now my ex-girlfriend; unsurprisingly, that relation- ship didn’t last.
THE EXPLANATION
The truth is, in every interpersonal conflict in your life business, romantic or platonic – communication is both the problem and the solution.
You can predict the long-term health of any relationship by whether each conflict makes the relationship stronger or weaker.
Healthy conflict strengthens relationships because those involved are working against a problem; unhealthy conflict weakens a relationship because those involved are working against each other.
I sat down with Tali Sharot, professor of cognitive neurosci- ence at University College London and MIT, to understand what the science of the brain can teach us about the laws of effective communication, and what she shared with me changed my personal life, romantic relationships and busi- ness negotiations for ever.
Sharot and her team’s study, published in Nature Neuroscience, recorded the brain activity of volunteers during disagreements to find out what was happening inside their minds.
The experiment was based on asking 42 people, grouped into pairs, to make a financial evaluation. Each pair lay, separated by a glass wall, in a brain-imaging scanner. Their reactions to the experiment were recorded. They were shown pictures of real estate and asked, individually within their pairs, to guess its value and to place a bet on the accuracy of their valuation. Each volunteer was able to see the valuation of their partner on a screen.
When the couple agreed on a valuation, they each placed higher bets on its accuracy and the researchers monitoring their brain activity saw their brains light up, indicating that they were more cognitively receptive and open. However, if they disagreed about a valuation, their brains seemed to freeze and shut down, causing them to turn off to the other’s opinion and value that opinion less.
Sharot’s findings shed light on some recent trends around contentious areas of political discourse. An example being climate change: despite scientists presenting more and more irrefutable evidence over the last ten years showing that climate change is man-made, a survey conducted by
the Pew Research Centre indicates that the number of US Republicans who believe the scientific evidence has decreased in the same ten-year period. Furious arguing, regardless of evidence, is clearly not working.
So, here’s what needs to be done if we want to increase our chances of being heard by someone on an opposing side.
According to Sharot, if you want to keep someone’s brain lit up and receptive to your point of view, you must not start your response with a statement of disagreement.
When you find yourself disagreeing with someone, avoid the emotional temptation, at all costs, to start your response with ‘I disagree’ or ‘You’re wrong’, and instead introduce your rebuttal with what you have in common, what you agree on, and the parts of their argument that you can understand.
The strength of any carefully reasoned, logical argument isn’t likely to be recognised when you open with disagreement – regardless of how much evidence you have or how objectively correct you are.
Instead, if we start from a place of agreement, of common ground, we increase the chance that the strength of our arguments, the accuracy of our logic and the weight of the evidence will be received at all.
This third law to never disagree is the critical skill that will allow you to become an effective negotiator, speaker, salesperson, business leader, writer – and partner.
When I interviewed Julian Treasure, the speaking and communication coach whose TED talk has been viewed 100 million times, and Paul Brunson, the matchmaking and relationship expert known as ‘the love doctor’, they both
explained that the art of becoming a great communicator, conversationalist or partner is first listening so that the other persen feels heard, and then making sure you reply in a way that makes them feel ‘understood.
Tali Sharot’s studies in neuroscience now provide clear scientific evidence that shows why this approach of making someone feel heard and understood is so crucial in chan- ging someone’s mind. It’s no surprise that the people who are most likely to change our minds are the ones we agree with on 98 per cent of topics we feel that they fundamentally understand us, so we’re more open to listening to them.
★THE LAW YOU MUST NEVER DISAGREE
In the midst of a negotiation, debate or heated argument, try and remember that the key to changing someone’s mind is finding a shared belief or motive that will keep their brain open to your point of view.
Our words should be bridges to comprehension, not barriers to connection.
Disagree less, understand more.
The Diary Of A CEO
LAW 4
YOU DO NOT GET TO CHOOSE WHAT YOU BELIEVE
This law will teach you how to change any belief that you have – whether that’s your self-belief, beliefs about others or beliefs about the world-while also showing you how to change the stubborn beliefs of others.
Think of someone that you absolutely love: your mother, your father, your partner, your dog – the most important person (or animal) in your life.
Now visualise them tied to a chair, being held at gunpoint by an aggressive terrorist.
Now imagine that the terrorist says to you, ‘If you don’t believe that I’m Jesus Christ right now, I will pull the trigger and kill them!’
What do you do?
The truth is, the most you could do is lie – the most you could do is tell them that you believe they’re Jesus Christ, in the hope that your loved one would be spared. But you couldn’t, genuinely, make yourself believe it.
This thought experiment illuminates a profound and controversial point about the true nature of our beliefs. In my hypothetical scenario, when everything was on the line, you
still couldn’t choose to believe something that you don’t. So, what makes you think you can ‘choose’ any of your beliefs?
To investigate this concept further, I surveyed 1,000 people and asked them all the following question: ‘Do you think you choose your beliefs?’ Incredibly, 857 (85.7 per cent) of them said that they did.
On the next page of the survey, when I asked people if they could genuinely believe a terrorist holding their loved one at gunpoint was Jesus Christ if it meant it would save their loved one’s life, 98 per cent of people admitted that they couldn’t choose that belief the most they could do was lie.
The fundamental beliefs you hold about yourself, the fundamental beliefs you hold about others, the fundamen- tal beliefs you hold about the world – you’ve ‘chosen’ none of them.
When people hear this, they tend to have a visceral nega- tive reaction, because it sounds disempowering and attacks our sense of ‘free will’, control and independence. If I can’t choose a belief, how can I ever change a belief? Does that condemn me to the current beliefs I have about the world, others and myself?
Thankfully, it doesn’t.
Your life is a testament to the fact that your beliefs do continually change and evolve – I’m assuming you don’t still believe in Santa Claus?
Society too, continues to change its beliefs at an increas- ing speed; in the 1700s, people thought tobacco was healthy and doctors would blow tobacco smoke up the arse of a drowned person in an attempt to revive them; in the 1800s we believed clitoral orgasms were a sign of insanity and doctors would medically treat people who had them; as recently as the 1970s, people believed space aliens were
sending us coded messages by flattening our crops on farms in middle America; and medieval doctors pulled their cures out of their arses, literally poop was believed to be a cure for everything from headaches to epilepsy.
Thankfully, beliefs change.
Our brains consume a huge amount of energy and have therefore evolved strategies to preserve energy in order to survive. Because one of the brain’s main purposes is to predict by spotting patterns and making assumptions based on those patterns, it must do so as efficiently and in as little time as possible. Beliefs allow the brain to make such fore- casts quickly.
Having stubborn beliefs is a useful survival tool for humans because beliefs drive behaviour your ancestors, who stubbornly held the belief that lions are dangerous, fire is hot and deep water is to be avoided, survived long enough because of these beliefs to have babies who possessed the same stubbornness.
Going back to the example of the terrorist holding your loved one hostage under threat of execution; now imagine the terrorist grabbed a glass of water and turned it into wine (an act Jesus is known for). Would this change your beliefs about the terrorist? Would you now believe that the terrorist is in fact Jesus Christ?
In my survey, 77 per cent said that this would be enough to convince them that the terrorist was in fact Jesus Christ, and in total 82 per cent said their beliefs about the terrorist would change the act of witnessing someone turn water into wine was strong enough evidence to cause them to change their belief.
This thought experiment and the corresponding survey reveal a fundamental truth about the nature of all of our beliefs: the things you believe are fundamentally based on some form of primary evidence. However, scientific stud- ies have repeatedly proved that whether that evidence is objectively true or false doesn’t actually matter – we subject- ively accept evidence to be true based on our experiences and biases.
There are still 300,000 Americans who believe the earth is flat; in a recent Ipsos survey, 21 per cent of adult Americans said they believed Santa Claus is real; a disturb- ing number of people believe King Charles is a vampire; one in three Americans believe Bigfoot exists; and one in four Scottish people believe there is a giant monster living in a lake near Inverness.
To change their beliefs, simply telling them they’re wrong, as we’ve seen in Law 3, won’t work. Showing a flat-earther a legitimate picture of a round Planet Earth also doesn’t work, and despite what motivational coaches might say, telling someone who had their confidence destroyed at seven years old by vicious playground bullies (very strong evidence) to simply believe in themselves or to repeat affirmations in a mirror, won’t do anything to change their underlying beliefs about themselves either.
SEEING IS BELIEVING
Just showing a flat-earther a picture of the spherical Earth taken from space by NASA doesn’t work because in order to believe what they’re seeing, they have to trust not only the picture, but the credibility of the source from which the picture came NASA. Flat-earthers trust neither; they
believe NASA is fraudulent, astronauts are actors and the scientific community is in on it.
In Dr Robert Cialdini’s renowned book Influence, he explains that if we trust someone’s authority on a matter – if Lionel Messi tells us that Adidas football boots are better than Nike, if a personal trainer tells us we’re lifting a weight incorrectly or if a doctor tells us we need to take a pill – we’re very likely to defer to their authority, adopt their belief and do what they say.
‘For some of our most important beliefs we have no evidence at all, except that people we love and trust hold these beliefs. Considering how little we know, the confidence we have in our beliefs is preposterous and it is also essential.’
2002 Nobel Prize laureate Daniel Kahneman
Authority figures are powerful forces for belief change, but the most powerful force of all is first-party evidence from our own five physical senses. As the phrase goes, seeing is believing. Because the flat-earth community is so distrust- ful of science, astronomy and really anyone qualified, the
only conceivable way that you could upend their stubborn beliefs is to send them to space to have a look for themselves.
This need to see evidence with our own eyes explains why so many crazy conspiracy theories withstand the test of time – why people dismiss climate change, believe the earth is flat and question the efficacy of vaccines – these things are impossible for most of us to see for ourselves.
Likewise, someone lacking confidence in their speaking abilities is unlikely to become confident just because their mum tells them they’re a good speaker they will need to acquire first-party evidence themselves, by speaking on stage and getting positive feedback from bias-free sources they trust.
We believe ourselves and our own eyes to be trusted sources, making it important for scientists to involve our five senses to make their insights accessible to us. With this prin- ciple in mind, climate-change educators are now trying to translate scientific insights about the occurrence and speed of climate change into ‘local lessons’, for example showing the impact of climate change on things in our local area so that we can go and see it for ourselves.
★CONFIDENCE IN EXISTING BELIEFS
I asked Tali Sharot, who we met in the previous law, ‘How do we change our or someone else’s belief?’ She has spent years researching and conducting multiple studies on why beliefs exist, why they’re hard to change and how to change them.
She told me that the brain considers any new evidence alongside the current evidence it has stored. So, if I told you I had seen a pink elephant flying in the sky, your brain will compare this new evidence to your existing evidence that elephants aren’t pink and they can’t fly, and likely reject it.
However, if I told a three-year-old that I had seen a pink elephant flying in the sky, they would likely believe me because they have yet to form strong opposing beliefs about elephants, aviation and the laws of physics.
Sharot asserts that there are four factors that determine whether a new piece of evidence will change an existing belief:
- A person’s current evidence.
- Their confidence in their current evidence.
- The new evidence.
- Their confidence in that new evidence.
And as we learn from the widely discussed phenomenon called ‘confirmation bias’, whereby humans tend to search for, favour and recall information in a way that confirms or supports their existing beliefs or values the further the new evidence is from their current beliefs, the less likely it is to change their thinking.
WE CHANGE OUR MINDS IF IT SOUNDS LIKE GOOD NEWS!
All of this means that strongly held false beliefs are very hard to change, but there is one important exception: when the counter-evidence is exactly what you want to hear, you’re more likely to change your mind. For example, in a 2011 study in which people were told that others see them as much more attractive than they see themselves, they were happy to change their self-perception. And in a 2016 study in which people learned that their genes suggested that they were
much more resistant to disease than they thought, the partici- pants were again quick to change their beliefs.
What about politics? Back in August 2016, 900 American citizens were asked to predict the results of the presidential election by putting a little arrow on a scale that went from Clinton to Trump. So, if you thought Clinton was highly likely to win, you put the arrow right next to Clinton. If you thought the odds were 50/50, you put the arrow in the middle, and so on. They were first asked: ‘Who do you want to win?’ to which 50 per cent said they wanted Clinton to win and 50 per cent said they wanted Trump to win.
When they were asked who they thought was going to win, both groups of supporters put the arrow closest to Clinton indicating that they believed she would win. Then a new poll was introduced, predicting a Trump victory. And everyone was asked again who they thought was going to win. Did the new poll change their predictions?
Indeed, it did. But it predominantly changed the predic- tions of the Trump supporters – because it was exactly what they wanted to hear. They were elated that the new poll was suggesting a Trump victory, and were quick to change their predictions.
The Clinton supporters didn’t change their predictions much, and many of them ignored the new poll altogether.
★DON’T ATTACK BELIEFS, INSPIRE NEW ONES
Tali Sharot concluded that in order to change beliefs, ‘the secret is to go along with how our brain works, not to fight against it’, which is what most people try and fail to do.
Don’t try and break or argue with someone’s existing evidence; instead focus on implanting completely new
evidence, and make sure you’ve highlighted the incredibly positive impact this new evidence will have on them.
One example of this is of parents’ reaction to the false link drawn up between the mumps, measles and rubella (MMR) vaccine and autism, in a now-debunked journal article that was published in 1998. As news of the article’s theory spread, many parents refused to vaccinate their chil- dren, and held on to their beliefs stubbornly. Eventually, a group of researchers changed their minds, not by trying to break their existing beliefs they didn’t focus on their existing beliefs at all – but by offering the parents new infor- mation about the very positive benefits of the vaccine – true information about how it prevents kids from encountering deadly disease. And it worked parents agreed to have their children vaccinated.
DETAILED SELF-REVIEW CAN REDUCE ANY BELIEF
Interestingly, people won’t lower the conviction of their beliefs when you attack them or try to convince them with data, but they will lose conviction when asked to explain or analyse the details of their beliefs. This is a technique cogni- tive behavioural therapists know well.
The New Yorker’s Elizabeth Kolbert described a study conducted at Yale where graduate students were asked to rate their understanding of their own toilet at home. They were then asked to write detailed, step-by-step explanations of how the device works. Once they’d attempted to explain the inner workings of a toilet, they were asked to rate their understanding again. Their belief in their understanding of toilets dropped significantly.
In a similar study conducted in 2012, people were asked about their stance on political proposals relating to health care. As Kolbert describes, ‘Participants were asked to rate their positions depending on how strongly they agreed or disagreed. Next, they were instructed to explain, in as much detail as they could, the impacts of implementing each proposal. Most people at this point ran into trou- ble.’ Asked once again to rate their views, the conviction of their beliefs decreased and they either agreed or disagreed less vehemently.
Asking someone to explain the detail and logic under- pinning their strongly held beliefs is a profoundly powerful way to reduce their conviction. This works for limiting beliefs too. If someone is struggling with their self-belief and believes they’re worthless, having them explain in as much detail as they can, why they feel that way, and questioning their responses, is an effective way to get them to relinquish that belief.
★THE GROWTH ZONE IS WHERE NEW EVIDENCE EXISTS
As you learned in Law 2, when I was younger, I struggled with awful stage fright, which itself is underpinned by a set of limiting beliefs. Telling me it was ‘all going to be OK’ was not enough to change my preconceptions about speaking on stage, how I would perform and what the reaction would be my beliefs were too stubborn.
The reason my stage fright eventually vanished – to the point that now I feel 99.9 per cent less nervous when speak- ing in a packed arena or live on TV – is simply because I carried on speaking on stage. And doing so gradually gave
me new, positive, first-party evidence that replaced the exist- ing evidence I had about my on-stage abilities the more I spoke on stage, the stronger my confidence in this new evidence became, and with it, the belief in my inability and the fear it created diminished.
‘Do the thing you fear, and keep on doing it. That is the quickest and surest way ever yet discovered to conquer fear!
Dale Carnegie
This, for me, is maybe the most important fundamental truth about belief change and how to increase a person’s self-belief even your own; beliefs change when a person gets new counteracting evidence that they have a high degree of subjective confidence in.
If a friend of yours has a limiting belief about themselves, or you have a limiting belief about yourself, the best chance you have of changing that belief isn’t by reading self-help books, inspirational quotes or watching motivational videos, it’s by stepping out of your comfort zone and into a situation where that limiting belief will be confronted head on with new first-party evidence.
This is how you change even the most stubborn beliefs. This is how I went from being deeply religious to agnostic in the space of 12 months, from low confidence to self- believing in my transition from childhood to adulthood, and
from being a terrified public speaker to having unshakeable confidence on any stage.
Panic Zone, where negative evidence is created
Growth Zone, where positive evidence is created
Comfort Zone, where your existing evidence is believed
★THE LAW: YOU DO NOT GET TO CHOOSE WHAT YOU BELIEVE
Beliefs are stubborn, but they are malleable. To change a belief, a person must find a way to attain convincing new evidence that they can trust. They’re more likely to believe the validity of this new evidence if its source agrees with their other existing beliefs. Evidence that offers positive outcomes is the easiest evidence for someone to believe. If you interro- gate the validity and detail of one of your own limiting beliefs,
your conviction in it will weaken. If you want to change some- one’s belief, don’t attack it, make them a direct witness to positive new evidence that will both inspire them and coun- teract the negative effects of their old beliefs. Unchallenged limiting beliefs are the greatest barrier between who we are and who we could be.
Stop telling yourself you’re not qualified, good enough or worthy.
Growth happens when you start doing the things you’re not qualified to do.
LAW 5
YOU MUST LEAN IN TO BIZARRE BEHAVIOUR
This law is responsible for every successful company I’ve ever built – it teaches you how to stay at the forefront of the rapidly changing world we live in, how to capitalise on change and how to avoid ever being left behind by any of the incoming technological revolutions.
★THE STORY
‘People love music; that’s why we’ll always be in business.’
These were the fateful words uttered by the former CEO of one of the world’s largest music stores as he peered over the second-floor balcony out on to his bustling shop floor.
Years later, his global music store was out of business.
He was right; people do love music. But they don’t love travelling for an hour, in the rain, wrestling through a busy shop floor to get a plastic disc and then queuing to pay for it.
He misjudged what his customers wanted: they wanted music, they didn’t want CDs.
iTunes, the digital music platform built by Apple, had emerged in the spring of 2003, allowing his disc-buying customers to get what they wanted – music without all the inconvenience.
I’m told on good authority that this particular CEO was so cynical about digital music that he wouldn’t even enter- tain conversations with his senior leadership team about its introduction or the threat it posed.
One of his professional associates told me that he had ‘leaned out’, because he didn’t understand it, he thought the space was rife with piracy and that it wouldn’t directly impact people’s love of CDs.
I believe writer Clifford Stoll had also ‘leaned out’ when he made the following scornful prediction about the future of the internet, which was published in Newsweek in February 1995:
I’m uneasy about this most trendy and oversold community. Visionaries see a future of telecommuting workers, interactive libraries and multimedia class- rooms. They speak of electronic town meetings and virtual communities. Commerce and business will shift from offices and malls to networks and modems
Baloney The truth is no online database will replace your daily newspaper.
Newsweek would end up discontinuing their print magazine and moving their entire business onto the internet.
In 1903, the president of a leading bank had certainly. leaned out when he told Henry Ford – the founder of Ford Motor Company – ‘The horse is here to stay but the automo- bile is only a novelty – a fad.’
In 1992, Andy Grove, the CEO of Intel, had clearly leaned out when he said: ‘The idea of a personal communi- cator in every pocket is a pipe dream driven by greed.’
And the former CEO of Microsoft Steve Ballmer had certainly leaned out when he laughed at Apple and said, ‘There’s no chance that the iPhone is going to get any signifi- cant market share.’
At 19 years old I had a meeting at the beautiful London offices of one of the world’s leading fashion brands. It was 2012 and social media had caught on among consumers, but brands were lagging behind new technology. as they always seem to do with
My mission that day was to persuade the brand’s market- ing department – namely their marketing director to take social media more seriously to lean in – and more specif- ically to launch their own social media pages. I failed. I was berated, mocked and dismissed. The marketing director I was pitching to was visibly terrified: ‘So people will be able to comment on our posts and criticise us?’ he questioned. ‘I don’t want our brand to go viral – how would we control that?’ he continued. ‘Magazine advertising is doing well for us and social media is just too dangerous.’ He ended the meeting midway through my presentation and needless to say, he never called me back.
My company would go from strength to strength, argu- ably becoming the most influential marketing company in its market.
The brand I met that day filed for bankruptcy in 2019.
★THE EXPLANATION
Leaning out, as I define it, isn’t about being ‘wrong’ – it’s about being so arrogantly sure that you’re right that you refuse to listen, learn and pay attention to new information.
This isn’t just a symptom of arrogance – unfortunately, it’s often a symptom of being human; the psychological reason why people lean out of important, potentially vital informa- tion is because of the incredibly well-studied psychological phenomenon known as cognitive dissonance.
Coined by the American psychologist Leon Festinger in the 1950s, ‘cognitive dissonance’ describes the tension you experience when your thoughts conflict with your behav- iour. Being a smoker, for example, is dissonant it conflicts with the evidence that smoking is incredibly harmful. To resolve this tension, the smoker must either give up or find a way to justify their behaviour. We can all think of the excuses smokers use, from ‘I only smoke on occasion’ to ‘there are far worse things you can do to your body’ to ‘why shouldn’t I be free to behave as I choose?’
For Festinger, cognitive dissonance helped explain why so many of us live with contradictory ideas or values. But it can also stop us from changing our minds when we should, even when it could save careers, jobs, businesses or lives.
Research has shown that cognitive dissonance is most painful for us when we encounter facts or evidence that destabilise or conflict with how we see ourselves, that undermine our identity and confidence in ourselves, or that make us feel in some way threatened.
In business, anyone who is too rigidly fixed to an ideology probably won’t provide the solution, because resolving a problem often requires enough humility to disregard your initial hypothesis and listen to what the market is telling you.
WE WOULD RATHER BE DEAD THAN WRONG
Making a public statement about your views on as the CEO of Intel did about mobile phones, something, or the CEO of Microsoft did about the iPhone, risks putting an additional nail in your coffin, because once we’ve made a commitment to a belief, our brains will fight tirelessly to prove that we were right, even when we’re clearly wrong.
Time and time again, research shows that as soon as we make any decision – I will vote for this party; I’m going to buy a house in this area; I think Covid-19 is serious; no, I’m sure the risks are being exaggerated – we automatically begin justifying and rationalising it. Quite quickly any doubts we initially had will disappear.
The American psychologist Elliot Aronson, who studied this phenomenon, famously assembled a discussion group of pompous, dull people. Some of the participants were made to endure an arduous selection process; others were allowed to join immediately, without expending any effort.
Those who were given the runaround reported enjoying the group far more than the ones who were simply let in.
Aronson explained what was happening here: whenever we’ve invested time, money or energy into something and it ends up being a complete waste of time, this creates disson- ance, which we try to reduce by finding ways of justifying our bad decision. Aronson’s participants focused uncon- sciously on what might be interesting, or at least bearable, about being part of a deliberately boring group. The people who had invested very little effort in joining therefore had less dissonance to reduce, and more readily admitted what a waste of time it had been,
WE WON’T LISTEN TO THE OTHER SIDE
It wasn’t just that fashion brand’s marketing director that dismissed me. For the first three years of my social media marketing company’s existence, we were attacked, berated and criticised daily.
Commentators called us ‘parasites’, said our business was a ‘fad’ and predicted we’d be ‘bankrupt in a few months’. I remember consoling my tearful co-founder, Hannah Anderson, in 2015, when BuzzFeed News wrote a critical article challenging our character, practices and credibility.
Unsurprisingly, the attacks always came from people from the ‘traditional’ media and marketing world – TV, print and radio. They viewed us as the annoying ‘new kids on the marketing block’. One commentator said we were ‘mysteri- ous social media hackers’ and another journalist wrote that we were making millions from our ‘less than savoury adver- tising practices’.
The truth is, we weren’t doing anything that revolu- tionary they just didn’t understand it, and on some level it threatened their sense of identity that a ‘group of twenty- somethings in Manchester’ was taking over marketing, as one journalist described it.
When we don’t understand something, someone, a new idea or technology, and when that new thing challenges our identity, intelligence or livelihood, instead of listening and leaning in – in an attempt to ease our cognitive dissonance we too often lean out and attack them. This might make us feel good, but an ostrich with its head in the sand is at great risk of being eaten.
This explains why the most important innovations in our lives received the most criticism when they were first
introduced they threatened to disrupt people’s sense of identity, intelligence and understanding. For this very reason I’ve long held the belief that passionate criticism of a tech- nology is usually a positive indicator of its potential it’s a sign that there’s something worth leaning in to, someone is threatened and innovation is coming.
This is why I leaned in to what is known as ‘Web 3.0’. ‘blockchain technology’ or ‘crypto’, and founded a software company in this space called thirdweb – because all the right people were dismissing, attacking and angry about it. This wave of pessimism gave me flashbacks to 2012 when I first launched a Web 2.0 (social media) company, and so I reserved judgement and did my own research. Beneath all the nefarious money-grabbing and short-sighted behaviour which is common when a new technology emerges I found an underlying technological revolution in blockchain that I believe will make many functions of our lives easier, better, faster and cheaper. Thirdweb was recently valued at $160 million in our latest investment round and we now have hundreds of thousands of clients using our tools.
Even if a new innovation doesn’t beget a wave of critics, it’s important to remember that innovation disrupts because it’s different. By definition, it should look weird, it should feel unconventional, it should be misunderstood, and it should sound wrong, stupid, dumb or even illegal.
I interviewed advertising legend Rory Sutherland, vice chairman of the Ogilvy advertising group, on this very topic, and he told me: ‘All too often, what matters to people is not whether an idea is true or effective, but whether it fits with the preconceptions of a dominant convention or incumbent. New things put ego, status, jobs and identities at stake
You see this cognitive dissonance and avoidance every- where you look. Whenever we feel an affinity with an ideology, politician, newspaper, brand or technology, that very allegiance distorts evidence that conflicts with those loyalties. If we believe someone is ‘on the other side’, there is dissonance before they’ve said a word.
★HOW TO BECOME A ‘LEAN-IN PERSON’
To quote the education entrepreneur Michael Simmons: ‘If someone is 40 years old today, the rate of change they exper- ience in 2040, when they’re 60, will be four times what it is now. What feels like a year’s worth of change by today’s stan- dards will occur in three months. When someone who is 10 today is 60, they’ll experience a year of today’s rate of change in just 11 days.’
To summarise the profundity of this extreme acceleration of change, Ray Kurzweil, arguably the world’s pre-eminent futurist, says: ‘We won’t experience one hundred years of technological advance in the twenty-first century; we will witness in the order of twenty thousand years of progress (when measured by today’s rate of progress), or about one thousand times greater [rate of change] than what was achieved in the twentieth century.’
Change is only going to get faster so expect your feelings of cognitive dissonance – the feeling that something doesn’t make sense and conflicts with what you already know, to increase.
As discussed in Laws 3 and 4, admitting we’re wrong rather than reflexively jumping to self-justification or dismissal requires self-reflection and, at least temporarily, dissonance
You don’t want to be the entrepreneur that misses the . next technological revolution, you don’t want to be the CMO that dismisses the next big marketing opportunity, you don’t want to be the journalist that dismisses the next frontier of media. You don’t want to be a lean out’ person. With the aforementioned rate of change in mind, there’s going to be a lot more things that tempt you to lean out.
Thankfully, there are a few practical and mental tech- niques we can adopt to reduce this dissonance and the ‘lean out’ behaviour it creates.
One technique is to default to believing that two seem- ingly conflicting ideas can be true at the same time and having a bias to keep them separate, a technique Elliot Aronson and his fellow social psychologist Carol Tavris refer to as the ‘Shimon Peres solution’. Former prime minister of Israel Shimon Peres was angry when his friend Ronald Reagan, the American president, made an official visit to a cemetery in Germany where former Nazis were buried.
Peres was asked how he felt about Reagan’s decision to visit the cemetery. He could have chosen one of two ways to reduce dissonance:
- Renounced the friendship.
- Dismissed Reagan’s visit as trivial and not worth worrying about.
Yet Peres resorted to neither of these responses, instead simply saying, ‘When a friend makes a mistake, the friend remains a friend and the mistake remains a mistake.’
Peres managed to ‘hold’ the dissonance, and resisted the urge to force two things to make perfect sense. It’s a lesson in avoiding easy, knee-jerk responses or being pressured into a binary choice, and instead accepting nuance and recognis- ing that two apparently conflicting things can be true at the same time. Despite what passionate online tribalism might tempt you to believe your most important beliefs should not be binary; lean-in people can see the merit of the old way and the new way at the same time, without the compulsion to reject or condemn either.
In moments of dissonance, when we’re faced with ideas, innovations and information that we don’t understand, which challenge our conventions or threaten our identity Web 3.0, AI, virtual reality, social media, opposing political ideologies and social movements the key is to reserve the temptation of judgement – which is often just an attempt to ease our cognitive dissonance to lean in, to study and to ask honest questions: Why am I believing what I believe? Is it possible that I’m wrong? Do I know what I’m talking about? Am I leaning out because I don’t understand? Am I following the party line? Are these my own beliefs or the beliefs of the people like me?
Those that have the patience and conviction to do this will undoubtedly own the future.
Those that don’t will continue to be left behind.
★ THE LAW: YOU MUST LEAN IN TO BIZARRE BEHAVIOUR
When you don’t understand, lean in more. When it chal- lenges your intelligence, lean in more. When it makes you feel stupid, lean in more. Leaning out will leave you behind.
Don’t block people that you don’t agree with, follow more of them. Don’t run from ideas that make you uncomfortable, run towards them.
Taking no risks will be your biggest risk.
You have to risk failure to succeed.
You have to risk heartbreak to love.
You have to risk criticism for the applause.
You have to risk the ordinary to achieve the extraordinary.
If you live avoiding risk, you’re risking missing out on life.
The Diary Of A CEO
LAW 6
ASK, DON’T TELL THE QUESTION/ BEHAVIOUR EFFECT
This law reveals one of the most simple and effective psychological tricks that you can use to motivate someone to do something, form a habit or perform a desired behaviour. You can use it on yourself or someone else!
It’s 1980 in America. Ronald Reagan is running for presi- dent against Jimmy Carter, who’d been elected in 1976. The economy is in a horrific state, and Reagan must convince voters that it’s time to kick Carter out of the White House.
In the last week of the 1980 presidential campaign, on 28 October, the two candidates held their one and only presidential debate and 80.6 million viewers tuned in to watchmaking it the most-watched debate in American history at the time.
Going into the debate, incumbent President Carter had an eight-point lead according to polls.
Reagan knew he needed to use Carter’s abysmal economic performance against him but, instead of doing what every presidential candidate before him had done and stating the economic facts, he did something that no one had ever done,
but every presidential candidate seems to have done since: he asked a simple but now legendary question, ‘Are you better off now than you were four years ago?” He said:
Next Tuesday, all of you will go to the polls, you’ll stand there in the polling place and make a decision. I think when you make that decision, it might be well if you would ask yourself, are you better off than you were four years ago? Is it easier for you to go and buy things in the stores than it was four years ago? Is there more or less unemployment in the country than there was four years ago? Is America as respected throughout the world as it was? And if you answer all of those questions yes, why then I think your choice is very obvious as to who you will vote for.
A televote poll carried out by ABC News immediately after the debate received about 650,000 responses and almost 70 per cent of respondents said Reagan had won the debate. Seven days later, on 4 November, Reagan defeated Carter by ten points, in a historic landslide victory, to become the 40th president of the United States.
Just a question? No, political magic backed by science.
Why? Questions, unlike statements, elicit an active response they make people think. That’s why researchers at Ohio State University have found that when the facts are clearly on your side, questions become extremely more effective than simply making a statement.
★THE POWER OF THE QUESTION/ BEHAVIOUR EFFECT
We all make commitments we fail to honour. How many times have you said, ‘I’ll eat better this year’ or ‘I’ll exercise every morning this week’, only to fall short of your plan? Of course we intend to follow through, but good intentions aren’t enough to create meaningful change. A well-designed question, however, might be.
After combing through more than 100 studies span- ning 40 years of research, a team of scientists from four US universities discovered that asking is better than telling when it comes to influencing your own or another’s behaviour.
David Sprott, a co-author of the research from Washington State University said: ‘If you question a person about performing a future behavior, the likelihood of that behavior happening will change. Questions prompt a psychological reaction that is different from the reaction to statements.
This means, for instance, that a sign that says, PLEASE RECYCLE is much less likely to increase its viewers’ chance of recycling than a sign that says, WILL YOU RECYCLE? Telling yourself ‘I will eat vegetables today’ is less likely to increase your chances of eating vegetables than asking yourself the question, “Will I eat vegetables today?”
Will you recycle?
Astonishingly, researchers found that turning a statement into a question could influence a person’s behaviour for up to six months.
The question/behaviour effect is even more powerful with questions that can only be answered with either yes or no.
The question/behaviour effect is at its strongest when questions are used to encourage behaviour that fits the receiver’s personal and social ambitions (when answer- ing yes to the question would bring them closer to who they want to be).
Starting the question with ‘will’ implies ownership and action, and causes the question/behaviour effect to be even stronger than starting your question with a word like ‘can’ or ‘could’, which imply the question is about ability rather than action. It’s also stronger than starting your question with ‘would’, which is conditional and implies possibility more than probability.
USING COGNITIVE DISSONANCE IN YOUR FAVOUR
In Law 5 I explained how harmful the phenomenon of cogni- tive dissonance can be, I’m now going to tell you how helpful it can be.
Cognitive dissonance describes the mental discomfort you experience when the best you the person you really want to be – doesn’t match up with the person you currently are. Let’s say you aspire to be an expert in Tai Chi and a friend asks whether you practise Tai Chi daily. Answering no would create cognitive dissonance because it would highlight a disconcerting mismatch between who you want to be and who you actually are. To remove that mismatch you’re likely to answer yes. And, once you’ve done that, your aspiration is more likely to become a reality because the question has reminded you of not only who you want to be but the path to becoming that person, and you’ve set an intention to walk that path – all in the form of one small but powerful question.
The reason this works even more effectively when answer- ing a yes or no question is because these binary choices don’t allow for justification and excuses – both of which allow us to wriggle away from confronting the reality of who we want to be and what we need to do to get there.
If you’ve read my first book, you’ll know that my wonder- ful PA, Sophie, likes to announce every week that she’s ‘going to the gym on Monday’. On occasion, when I’ve been naive and gullible enough to ask her if she went to the gym on the aforesaid Monday, she’ll respond with a long, elaborate reason why it wasn’t possible and follow that with a new announcement that she’s going to go next Monday instead. She’s continued this routine every week for eight years now
The great thing about a ‘yes’ or ‘no’ question is it doesn’t give you any wiggle room to deceive yourself. It forces you to commit one way or the other.
So, if you start making excuses for your behaviour or want to lecture someone about what they should do differently, try this instead: ask yourself or them a simple question to which the answer can only be yes or no. It works really well when focusing on an area that could benefit from some additional motivation. ‘Will I go to the gym today?’ ‘Will I order healthy food for lunch?’ Allow no explanation. Just yes or no. Recently, I went for a run near my girlfriend’s house in Porto, Portugal. The area is known for its steep hills, but as I approached one particularly terrifying hill that was so steep it appeared almost vertical, the question/ behaviour effect came to my rescue. I asked myself, ‘Will you keep running – without stopping – until you’ve reached the top?’ I told myself ‘yes’. I can’t really explain it, but for some reason it really helped – I made it to the top without stopping; it killed any possible excuses I might have used to stop and it created a promise to myself that I didn’t want to break.
Use the question/behaviour effect to help others: ask a friend or loved one, ‘Will you eat more healthily?’ or ‘Will you go for that promotion?” This gentle confrontation has been repeatedly proven to lead to reliable, meaningful change and encourages people to be their best selves.
Use it in your job. If you’re a waiter in a restaurant serv- ing a table of happy customers, instead of telling them ‘I hope you enjoyed your food’ when you’re collecting their plates, instead ask ‘Did you like the food?’ just as you’re handing over the bill, right before it’s time for them to decide on the tip.
As President Reagan taught us, when the facts are clearly on your side, questions become extremely powerful tools for encouraging the behaviour you want.
★THE LAW: ASK, DON’T TELL THE QUESTION/BEHAVIOUR EFFECT
If you want to create positive behaviour, don’t make state- ments, ask binary yes or no questions. People are more likely to answer ‘yes’ if it will bring them closer to who they want to be, and once they answer ‘yes’, that yes is more likely to come true.
Ask questions of your actions, and your actions will answer.
The Diary Of A CEO
LAW 7
NEVER COMPROMISE YOUR SELF-STORY
This law introduces a concept you’ve probably never heard before called your ‘self-story’; it shows you how your self-story determines your success in life, and gives you the secret strategy for writing a better self-story about yourself, so you can achieve big ambitions.
‘A lot of people don’t know this…’ Chris Eubank Jr said, as he leaned forward ominously in his chair.
Chris Eubank Jr, championship boxer and son of the International Boxing Hall of Fame legend Chris Eubank, had stopped by my house to be interviewed by me in prepa- ration for this book.
He continued:
…but 80 per cent of being a fighter is mental. The balls, the guts and the grit that you have to have, to walk through crowds of thousands of people. And while you’re walking, knowing that once you get to that ring and walk up those stairs, you’re going to have to take off your jacket. The bell’s going to ring and you’re going to have to fight somebody. You’re going to have to get hurt and you’re going to have to
hurt somebody, in front of millions of people watching around the world. That in itself, that walk, most people on the planet cannot do that. Just the walk, let alone the fight part, it takes huge mental strength.
Me: Do you think you can train someone to have that mental strength?
Eubank Jr: I think you can; I’ve seen fighters develop it,
and you need it. At the end of the day, there are going to be times in training, in sparring and definitely in fighting where you’re going to get really hurt. You’re going to be in a position where you’re questioning yourself. What am I doing here? Am I going to be OK? Can I beat this guy? Should I give up? Should I find a way out? This is too much. Every fighter experiences that moment, you know.
Me: Have you ever seriously considered quitting in a fight?
Long pause
Eubank Jr: There was this one time where I was close to
giving up. I went to Cuba before I turned pro. Out there, the guys are animals. They’re monsters. I get in the ring to do a casual sparring session and then the Cuban Olympic heavy- weight representative walks up the stairs and gets into the ring. I thought he was coming into the ring to shadow box and warm up for his sparring session with somebody else. And they said, ‘No, no, no, no, you guys are going to spar.’ I was like, ‘Uh, he’s about three times the size of me. What do you mean?’ And they said, ‘No, no, he’ll work with you, just a casual spar.’ So I thought, Sure. That’s fine. Let’s go.
The bell goes for the first round and this guy sprints over to me and just starts laying into me. The biggest shots I’ve ever taken. Bang, bang, bang. I’m dodging, moving out the way, running around the ring. And he’s just coming at me and I can’t get this guy off me.
Bang, bang, bang. He knocks me out of the ring! It’s a four-foot drop out of the ring onto solid concrete. My knee hits the concrete and my leg goes completely dead. I tried getting up and my leg is completely gone. I’m looking up and this Cuban heavyweight is leaning over the ropes, looking down at me. I’m at a mental crossroads and I have a decision to make. Do I say, ‘Listen, my knee’s bad. You’re too big.’ Or do I get back in. I’m sat there on the concrete, looking around. Everyone’s looking at me, my dad is there. I made a decision. I was like, you know what, let’s fucking go. I got back in, and the Cuban just started laying into me again for another two painful rounds … But the only thing I could think was: I have to finish the three rounds, because I said I was going to do the three rounds. I’m not leaving this gym with everybody knowing that I quit. Because I couldn’t live with myself. I’ve got to go home and go to sleep. I can’t go to sleep knowing that another man made me quit. So I got back into that ring and I took my beating like a man.
And from that day on, I was never scared again. It was the worst experience of my life, but it was also the best experi- ence of my life because I now knew what I was capable of. I knew I had it inside me to not give up. If he can’t make me quit, who’s going to make me quit? Nobody. And that belief stayed with me for the rest of my career.
Me: That’s incredible. You’re talking about a story you’re writing about yourself, for yourself, and how important that story is in determining how you behave in the future.
Eubank Jr: Exactly. In training it happens the most: there
are times I’ll be on the treadmill, where I’ll be running, and I’ll get cramp in my calf and I’ve still got 8 minutes to go, because I’ve set the timer for 40 minutes and I’m on 32 minutes. The cramp starts and I will run with one leg, liter- ally limping, because if the treadmill can make me quit, what happens when I get into the ring with a guy who’s hit me, and I’m hurt? He’s going to make me quit too. It’s hugely import- ant because it teaches you to believe that no matter how hard things get, you are the type of person that will find a way.
It doesn’t matter if people are watching, or if nobody would know I quit. You can’t quit when no one is watching – you don’t ever want to put that, that spirit inside yourself, you’ve got to keep those demons out. They are demons and if you let them in often enough, they will take over!
‘I hated every minute of training, but I said, “Don’t quit. Suffer now and live the rest of your life as a champion.””
Muhammad Ali
★ YOUR SELF-STORY CREATES ‘MENTAL TOUGHNESS’
The US military is the most powerful on earth. Each year, roughly 1,300 cadets join its famously demanding military
academy at West Point. Part of their initiation involves a series of extremely difficult challenges called ‘Beast Barracks, These, according to researchers who studied West Point cadets, are ‘deliberately engineered to test the very limits of cadets’ mental capacities’.
When I read about their study, I, like most people, assumed that the cadets with the most stamina, intelligence, physical strength and athleticism would be the most successful. But when Angela Duckworth, a researcher at the University of Pennsylvania, studied their achievements, and more specif- ically, how mental toughness, perseverance and passion impact ability to achieve goals, she found something very surprising.
Duckworth tracked almost 2,500 cadets spread across two initiation classes. She compared several metrics including their high school rank, SAT scores, Physical Aptitude Test results and Grit Scale (which measures perseverance and passion for long-term goals with a grade from one to five).
It turned out that it wasn’t physical strength, intelligence or leadership potential that gave the most accurate indication of whether a cadet would make it through Beast Barracks – it came down to mental toughness, matched with determin- ation to reach a long-term goal. Perseverance was the most important thing. Believe it or not, cadets who were just one standard deviation point higher on the Grit Scale were 60 per cent more likely to make it through Beast Barracks.
Research continues to reveal that your self-story and the ‘mental toughness’, ‘grit’ or ‘resilience’ that you have is more important than anything else for achieving your goals in business and in life. That’s very good to know because while you can’t do much about your physicality or the innate abilities you are born with, you can do a lot to develop your self-story.
Unfortunately, our self-story isn’t just influenced by the first-party evidence we’ve collected about ourselves, it’s also influenced profoundly by the stereotypes around us. For instance, if the society you live in holds the stereotype that Black people are less capable than white people – and you’re a Black person you will likely internalise that belief and it will become part of your self-story; the science shows how this stereotype alone can significantly impact your self-story, your performance and ultimately your results.
At eight years old, I was eagerly putting on my swim- ming shorts in the school changing room ahead of my first swimming lesson, when a fellow pupil turned to me and casually said, ‘Did you know Black people can’t swim? Their bodies are different, so it won’t be easy for you today!’ I am of English and African heritage, so in that moment, with that one casual comment, not only did my excitement evap- orate, but so did my belief that I would ever be able to swim. Needless to say, that swimming lesson did not go well – I flapped around like a drowning dog and ultimately gave up halfway through the lesson. It would take me 18 years, and someone credible convincing me that this wasn’t true, for me to finally learn how to swim.
A remarkable study published in 1995 used something called ‘priming’ to demonstrate the effects that this type of ‘stereotype threat’ can have on your self-story.
Researchers gave a group of students a difficult vocabu- lary test, but before the test began, they asked some of the Black students questions about their race. Astonishingly, the Black students who were asked about their race performed worse on the test, scoring lower than both the white students and the Black students who had not been questioned.
Importantly, when students were not asked these questions. the scores were comparable.
The insidious impact a negative stereotype can have on someone’s self-story isn’t just observed in matters of race, In another study, researchers wanted to test the pernicious myth that says women aren’t as good at maths as men. Before setting both male and female undergraduates the test, some of the participants heard the researcher say that as a rule, men and women scored differently on this test; others were told that men and women had previously scored equally.
The women who heard the researcher’s negative comments performed significantly worse, reported greater anxiety and had lower expectations about their performance than the men. This experiment confirmed earlier studies by finding that when participants were exposed to a comment about their gender, a stereotype threat kicked in and their perfor- mance deteriorated.
So, what would happen if a woman could escape her identity, change her self-story and pretend to be someone else while writing the test?
A researcher called Shen Zhang set out to test this. Zhang gave 110 female undergraduates and 72 male undergradu- ates 30 multiple-choice maths questions. Before the test, each of them was told that men do better at maths than women.
In addition, some of the volunteers were then told to take the test under their real name, but others were to complete it under one of four invented names: Jacob Tyler, Scott Lyons, Jessica Peterson or Kaitlyn Woods.
The men outperformed the women in the test. But astoundingly, women who assumed an alias, whether it was male or female, outperformed the women who didn’t. And –
importantly – the women adopting as the men! an alias did just as well
This demonstrated once and for all the merits of tests and interviews using alternative identification methods that avoided names in the researcher’s words, this would poten- tially ‘allow stigmatised individuals to disconnect their self from a threatening situation’, and crucially, ‘disarm nega- tive stereotypes’.
★THE SCIENCE OF DEVELOPING A STRONG SELF-STORY IN YOUR HEALTH, WORK AND LIFE
The ‘self-story’ Chris Eubank Jr was describing is a theory scientists and psychologists know well and refer to as your ‘self-concept’. It is our personal belief of who we are, encompassing all our thoughts and feelings about ourselves physically, personally and socially. It includes our beliefs about our capabilities, our potential and our competence.
Your self-story develops most rapidly during early child- hood and adolescence, but it continues to form and change as we collect more evidence about ourselves throughout our adult life.
YOUR SELF-STORY CREATES MENTAL TOUGHNESS
Psychology professor Fatwa Tentama states that individ- ual ‘resilience’ is influenced by having a positive self-story. Individuals with a positive self-story will be more optimis- tic, persevere for longer in the face of adversity, handle stress better and achieve their goals more easily.
Individuals with a low self-concept will believe and view themselves as weak, incompetent, unwelcome, lose interest in life, be pessimistic about life and give up easily.”
Laura Polk, scientist and leadership expert
One study on students, conducted by Eka Aryani, a scien- tist at Mercu Buana University of Yogyakarta in Indonesia, sought to understand the relationship between self-story and resilience, and concluded that ‘self-story’ is almost 40 per cent of what makes a student ‘mentally tough’. The other 60 per cent of factors that can affect individual resilience include actual abilities, family factors, and community factors.
So how do we improve our self-story so that we can be resilient and optimistic, achieve our goals and persevere in the face of adversity?
CREATING A STRONGER SELF-STORY
You’ve probably heard this quote by legendary college basket- ball coach John Wooden: ‘The true test of a man’s character is what he does when no one is watching.’ This is true, but according to science, it’s also true that a person’s character is created, built or destroyed when no one is watching.
Everything you do – with or without an audience provides evidence to you about who you are and what you’re capable of.
As we discovered in Law 4, first-party evidence – that is, every- thing you observe with your own senses – is by far the strongest evidence when it comes to creating or changing a belief.
You’re in the gym alone lifting weights, you’re on your last set and you’ve got to do ten repetitions to complete the workout. You get to the ninth rep and your muscles are burn- ing-what do you do?
Your choice, in this moment, may seem inconsequential – but every decision we make writes another line of powerful first-party evidence, about who we are, how we respond to adversity and what we’re capable of, into today’s chapter of our self-story.
That evidence will not only become self-fulfilling in the gym, it will permeate the rest of your life and relentlessly influence your behaviour.
That evidence will whisper to you when things are diffi- cult ‘just drop the weight’, ‘just give up’, ‘remember, you can’t do this’ – and science shows that in the face of adversity, negative self-evidence will cause you more stress, more worry and more anxiety than a story full of perseverance, overcom- ing and victory.
What we believe about ourselves creates our thoughts and feelings, our thoughts and feelings determine our actions, and our actions create our evidence. To create new evidence you must change your actions.
Choose to do the tenth rep when it would be easier to stop at nine. Choose to have the difficult conversation when it would be easier to avoid it. Choose to ask the extra question when it would be easier to stay silent. Prove to yourself – in a thousand tiny ways, at every opportunity you get that you have what it takes to overcome the challenges of life. And if you do only then will you actually have what it takes to overcome the challenges of life a robust, positive, evidence- based self-story.
★THE LAW: NEVER COMPROMISE YOUR SELF-STORY
Mental toughness is required for enduring success, and it’s principally derived from having a positive self-story. To build your self-story, you need evidence, and that evidence is derived from the choices you make in the face of adversity. Be wary of counter-evidence and the insidious long-term impact it can have on your self-belief and behaviour. If an eight-year- old tells you that you can’t swim, tell him to fuck off.
The most convincing sign that someone will achieve new results in the future is new behaviour in the present.
The Diary Of A CEO
NEVER FIGHT A BAD HABIT
This law reveals some surprising truths about how to make and break any bad habit you have. It shows you why fighting bad habits is a fail- ing strategy which often leads to rebounding – and what you should do instead.
I grew up worrying tha that my dad was going to die.
At some point before I turned ten, my siblings and I discovered that Dad was a secret smoker presumably he’d hidden it from us to stop us replicating his habit. But once we’d found his miniature cigars, he began smoking in front of us.
Surprisingly to me, he only ever smoked in the car. Never at parties, never at home, never at work, only in the car. I made a few subtle attempts to get him to quit, but nothing worked. Until one day, ten years later, when I inadvertently led him to finally quit his 40-year habit.
In order to explain what happened, I first need to briefly explain how habits are held in place.
The concept of habit loops was introduced by Charles Duhigg in his book The Power of Habit, in which he explores how and why habits develop, why they stick and how we can break them. Simplified, a habit loop consists of three key elements:
CUE: The trigger for habitual behaviour (eg. a stressful meeting or negative event).
ROUTINE: The habitual behaviour (eg. smoking a cigarette or eating chocolate).
REWARD: The result/impact on you of the habitual behaviour (eg. a feeling of relief or happiness).
When I was 18 years old, after dropping out of university to build my first tech start-up, I read a book called Hooked by Nir Eyal which explains how big social media companies and tech
companies get their users addicted to their products by exploit- ing this habit loop. While I was reading the book, I happened to stop off at home, and accidently left it in my dad’s bathroom.
My dad loves to read while he’s on the toilet, and picked the book up. It taught him about his habit loop, and he finally understood the cue (his car), routine (reaching into the car door, grabbing the cigarettes and lighting one), and reward (nicotine creating a dopamine release in his brain) that were causing him to smoke.
The next day he went to his car, took the cigarettes out, put miniature lollipops into the cigarette case, and never smoked again. The habit loop had been interrupted. A new, less-addictive habit had taken its place, and with that my father’s health outcomes had drastically improved.
Whether my father realised it or not, the science shows that the most important thing he did was not trying to fight the habit, but replacing the final step of the habit loop with a much less addictive reward – the lollipops.
Some incredible new scientific research has revealed just how foolish it is to try and fight your bad habits – and why people always seem to rebound when they do.
Have you ever noticed that when you focus too much on stopping something, you ultimately end up rebounding and do it more?
This is because we are action-oriented creatures, not inaction- oriented creatures. Tali Sharot, who we met in Law 3, said to me:
To get something good in life whether it’s a choc- olate cake or a promotion we usually need to take
action and do something to earn it. Consequently, our brain has adapted to understand that action is related to reward. So when we expect something good, a ‘go’ signal is activated, which makes us more likely to act and act fast.
Sharot describes an experiment where volunteers were told they could either press a button to get a reward (one dollar) or press a button to avoid a negative action (losing one dollar). Perhaps unsurprisingly, the volunteers who pressed the button to get the reward did so much more speedily than the volunteers who pressed the button not to lose the dollar.
The brain associates rewards with action, so you need to pair an action with a reward.
Additionally, some studies have shown that the more you try to suppress an action or thought, the more likely you are to take the action, or think about that thought. This is great evidence for the power of manifestation you get what you think about – but it’s also further evidence that trying to fight or not think about a habit is a foolish strategy.
A 2008 study in Appetite found that the group of volun- teers who tried not to think about eating ate more than the group who didn’t. The first group exhibited what is called a ‘behavioural rebound effect’.
Similarly, a 2010 study in Psychological Science found that the group of smokers who tried not to think about smoking actually thought about it even more than the group who didn’t.
This reminds me of a small piece of advice my driving instructor said to me when I was 18: ‘Steven, the car will go where your eyes are looking. If you want to avoid crash- ing into the cars on the side of the road, don’t focus on the
cars on the side of the road, because you will veer towards the parked cars on the side of the road. Look forwards, into the distance, where you want the car to go.’
This seems like a fitting analogy for breaking and making habits: you will end up doing the thing you’re focusing on, so don’t focus on stopping smoking, don’t fight it; focus on the behaviour you want to replace it with.
The director of the University of Oregon’s Social and Affective Neuroscience Laboratory, Elliot Berkman, says that if you’re a smoker and you tell yourself not to smoke, your brain still hears ‘smoke’. Conversely, if you tell yourself to chew gum every time you want a cigarette, your brain has a more positive, action-orientated goal to focus on. This explains why those miniature lollipops caused my dad to quit smoking: he didn’t just take the cigarettes out of his car door; he replaced them with a new action for his brain to focus on sucking lollipops.
★IF YOU WANT TO BREAK A HABIT. GET SOME SLEEP
‘When do you sleep?” is a question that I’ve been asked almost weekly for the last ten years, by more interviewers, panel moderators and journalists than I can remember. The implied assumption behind this question – which has always perplexed me – is that I can’t have accomplished extensive professional success while also getting a sufficient amount of sleep. The truth is very much the opposite – I’ve always slept well. I don’t allow any meeting, call or appointment to be scheduled before Ilam and I rarely use an alarm clock, because I’ve always known that sleep is the foundation of success, not an inhibitor of it.
‘You’re more likely to do the thing you don’t want to do when you’re stressed out,’ said Russell Poldrack, a psychology professor at Stanford University – i.e. you’re more likely to search out a dopamine hit, in the form of sugar, processed food, drugs, porn or alcohol, if you’re stressed.
Therefore, one of the most important things you can do to make new habits stick, and perform enough repetitions in that early phase to make the neurons in your brain fire together and wire together, is keep your stress levels low especially in that critical early phase while you’re forming the new habit.
One of the most effective things you can do is also the simplest: get a good night’s sleep. Whatever you’re trying to improve, from your social life to your smoking habit, sleep will help.
If you’re trying to get fit, getting enough sleep improves your speed, your strength and your endurance. If you’re trying to perform better at work, a lack of sleep will lead you to be less productive – and if you’re a manager, less attentive, less focused, less cheerful and even less ethical.
If you’re trying to lose weight or eat more healthily, sleep deprivation will decrease leptin, the hormone that gives your body the signal that you are full. It also leads to a corresponding increase in ghrelin, known as the ‘hunger hormone’, which causes a surge in appetite and fat storage, and can lead to you making unhealthy food choices.
So, if you want to break old habits and make new ones, forget all the complicated tips, tricks and hacks, and focus on the basics – you’ll succeed if you feel good, if you’re not over-stressed and if you’ve had a good night’s sleep.
DO NOT TAKE ON MORE THAN ONE HABIT AT A TIME
We all know that willpower is key to success, but until about 25 years ago we had a pretty simplistic view of it as a that, once developed, remains constant. This all changed when, during his PhD, Mark Muraven (now professor at the University at Albany, New York) argued that willpower appears to diminish the more we use it. skill
In 1998, he conducted a now famous experiment. In his lab, he set up a bowl of radishes and a bowl of freshly baked cookies, then brought in two groups of people who were led to believe the experiment was about taste perception. The first group was told they could eat the cookies and ignore the radishes, while the other was asked to ignore the cookies and eat only the radishes.
Five minutes into the experiment, a researcher entered the room and, after a 15-minute break, gave both groups a puzzle that was impossible to complete.
The cookie eaters, with their unused reservoirs of will- power, were incredibly relaxed, and would continue to try and solve it over and over and over again, some of them for over half an hour. On average, the cookie eaters spent almost 19 minutes trying to solve the puzzle before giving up.
The radish eaters who’d had to restrain themselves from eating the delicious cookies, depleting their willpower – couldn’t have behaved more differently. They became frus- trated and expressed their annoyance. Some put their heads on the table hopelessly; others lost their temper and took against the entire thing, complaining it was a waste of their time. On average, the radish eaters worked for around eight
minutes less than half the time the cookie eaters persevered for before they gave up.
Since the cookie/radish study, several researchers have tested and proven ‘willpower depletion’: the idea that rather than willpower being simply a skill, it is more like a muscle and – as with any muscle in the body – it gets tired as it works harder. In one, participants who were asked not to think about certain things during a first experiment were unable to suppress laughter when the researcher tried to make them giggle. Another experiment asked subjects to watch a tear- jerker without giving in to their emotions; in a subsequent test of something physical rather than something emotional, the subjects – just like the unfortunate radish-eaters – gave up more quickly.
So if the science here is correct, and willpower is a limited resource, it’s obvious that the more pressure, restrictions and strain you put on yourself while trying to make new habits and break old ones, the less chance you have of achieving them and the more chance you have of rebounding.
Fighting habits is a bad idea – it will drain your will- power and increase your chances of yo-yoing back into the habit. This is why unsustainable crash diets do not work any time you feel like you’re depriving yourself of something that you really want, you nearly always fail. For instance, in a 2014 study, almost 40 per cent of people said they failed to keep their New Year’s resolutions because their goal was too unsustainable or unrealistic, and 10 per cent said they failed because they had too many resolutions.
This is why making sure your habits are small and achiev- able enough to be sustainable – without the need for major sacrifice, which will deplete your willpower reserves is incredibly important. Rather than giving up every unwanted
habit you have at the same time, you should aim to have fewer goals, which increases the likelihood that you will complete any of them. With too many big, unrealistic, sacrifice-centric goals, your willpower will be under too much strain, it will run out, you’ll fail, and you’ll rebound.
And this is also why so many psychologists and scientists have found that the best way to create a new habit isn’t by fighting an old one or depriving yourself of rewards – which is counter-productive it’s by finding new rewards, healthier rewards and less addictive rewards, but nonetheless making sure you are still rewarding yourself along the way.
★THE LAW: NEVER FIGHT A BAD HABIT
If you want to overcome a habit, do not fight against it. Work with your habit loop and use positive action to replace it. Do not take on more than one bad habit at once; the more you try and change, the less your chances of changing anything. While you’re creating your new habit, make sure you take care of yourself and get as much sleep as you can.
Sleep, Lift, Move, Smile, Laugh, Listen. Read, Save, Hydrate, Fast, Build, Create.
Your habits are your future.
LAW 9
ALWAYS PRIORITISE YOUR FIRST FOUNDATION
This law makes the case that most of us have the wrong priorities – and it urges you to re-prioritise your health, so that you can live long enough to enjoy all your other priorities.
Warren Buffett, formally the richest man on earth, sat in front of a small group of college students in Omaha, Nebraska, and gave them his most important piece of advice:
When I was 16, I had just two things on my mind – girls and cars. I wasn’t very good with girls. So I thought about cars. I thought about girls, too, but I had more luck with cars.
Let’s say that when I turned 16, a genie had appeared to me. And that genie said, ‘I’m going to give you the car of your choice. It’ll be here tomorrow morning with a big bow tied on it. Brand-new. And it’s all yours!’
Having heard all the genie stories, I would say, ‘What’s the catch?’ And the genie would answer, “There’s only one catch This is the last car you’re ever going to get in your life. So it’s got to last a lifetime.’
If that had happened, I would have picked out a car, but, can you imagine, knowing it had to last a lifetime, what I would do with it?
I would read the manual about five times. I would always keep it garaged. If there was the least little dent or scratch, I’d have it fixed right away because I wouldn’t want it rusting. I would baby that car, because it would have to last a lifetime.
This is exactly the position you are in concerning your mind and body. You only get one mind, and you only get one body. And it’s got to last a lifetime. Now, it’s very easy to let them ride for many years.
But if you don’t take care of that mind and that body, they’ll be a wreck 40 years later, just like the car would be.
It’s what you do right now, today, that determines how your mind and body will operate 10, 20, and 30 years from now.
You must take care of it.
I spent the first 80 per cent of my life prioritising work, girls, friends, family, my dog and my material possessions.
Until, that is, I was 27 years old, when I and the rest of the world watched a global virus called Covid-19 sweep through civilisation, tragically killing more than 6 million people.
Because of the privilege of my youth and the naivety that instilled, up until then, being ‘healthy’ was something I took for granted. If I’m totally honest, I didn’t care about my health; I cared about looking good – trying to get a six-pack but actually ‘being healthy’ was something I’d fortunately never had to think about.
I think the global pandemic was psychologically trau- matic for most of us, but if there was a silver lining for me, it’s that the trauma of those two years etched the unarguable truth into my mind that my health should in fact be my top priority.
An international team of researchers announced that pooled data from scores of peer-reviewed papers capturing almost 400,000 Covid-19 patients found that people with obesity who contracted Covid-19 were 113 per cent more likely to fall so ill that they would need to be hospitalised. Unhealthy individuals were significantly more likely to die.
I have a strong enduring belief that none of us actually believe we’re going to die – this is so clearly evidenced by how we live our lives, the petty things we worry about and our attitude to risk. However, Covid-19 brought death to my doorstep, I got to see death up close and all too personal for the first time in my life. I was able to ponder its terrifying, liberating and uncertain features.
Staring into the clarifying face of death, I could see how poorly I had prioritised my life. I could see that my work, my girlfriend, my friends, my dog, my family and everything I owned were all just items placed on a fragile table called my ‘health’.
Life could take any of those items off the table as it often does and I would still have everything else on the table. You could remove my dog, God forbid, and I’d still have everything else on the table; you could take my girlfriend off the table, and I would still have everything else; but if you removed the table – my health – everything falls to the floor. I would lose it all.
Everything is contingent on the table. Everything is contingent on my health.
My health is my first foundation.
Therefore my health, logically, must be my first priority, every day, for ever.
And crucially, by embracing this reality – by having health as my first priority – my life is extended so I can enjoy all of my other priorities (my dog, my partner, my family) even more.
There is no greater form of gratitude than taking care of yourself.
This one realisation changed the trajectory of my life, and for the past three years I have made radical dietary changes cutting down sugar, processed food and refined grains. I began exercising six days a week without missing a week – and I have drastically increased my consumption of water, plants and probiotics.
I’m objectively healthy, which is great, but I also feel amazing which is even better. The positive impact on every part of my life my business, productivity, sleep, relation- ship, mood, sex life, confidence – has been so profound that I couldn’t write this book without including taking care of your first foundation as an unavoidable law of greatness.
‘Those who think they have no time for bodily exercise will sooner or later have to find time for illness.’
Edward Stanley
★THE LAW: ALWAYS PRIORITISE YOUR FIRST FOUNDATION
Take care of your body; it is, after all, the only vehicle you get to own, the only vessel you’ll use to explore the world and the only house you can ever truly call a home.
Your health is your first foundation.
The Diary Of A CE
PILLAR II
THE STORY
LAW 10
USELESS ABSURDITY WILL DEFINE YOU MORE THAN USEFUL PRACTICALITIES
This law shows you how to make your marketing or brand message travel ten times further and reach ten times more people, with a hundredth of the budget.
I started my first marketing company when I was 20 years old. The business grew faster than my experience could pos- sibly have handled and a year after founding the company I accepted a $300,000 investment from our biggest client.
When you give an inexperienced 20-year-old first-time- CEO a lot of money – more money than they’ve ever seen in their life there’s a chance they might do something really stupid with it. And that’s a fitting description of exactly what happened.
I took out a ten-year lease on a gigantic 15,000-square- foot warehouse in Manchester, in the north of England, large enough to accommodate hundreds of employees – but there were ten of us.
Before I had even purchased desks for my team to work on, I had built a mezzanine floor and installed a gaming room so that we could play video games. Uninspired by the
prospect of using stairs to exit the gaming room, I decided to spend £13,000 on an enormous blue slide with a big ball pool at the bottom.
By the time the desks arrived, I had installed a basketball hoop, a fully stocked bar, beer taps, a massive tree right in the middle of the office, and several other immature fittings.
Over the next few years, even though the average age of our employees was just 21, the company became the most publicised, the most mentioned, the fastest growing and the most disruptive in its industry. Our sales grew by more than 200 per cent per year, on average, for several years in a row.
Our clients were the world’s biggest brands, and our work- force swelled to more than 500 people by my 25th birthday.
And the most fascinating part of this story is that we never had a sales team.
We didn’t need a sales team because we had a massive blue slide.
I know this sounds crazy like hyperbole and exagger- ation but genuinely, the single biggest driver of our media publicity for the first few years of our existence was that gigantic blue slide.
Every major press title that wrote about us, every TV channel, every blog that mentioned us always referenced, joked about or focused in on the massive blue slide.
By my company’s third birthday, it had been photo- graphed by journalists hundreds of times, and so many journalists had asked me to pose lying in the ball pool for their stories that it had become a running joke in our office. The minute a journalist would arrive at reception to inter- view me, someone in the office would shout ‘Get in the ball pool!’ at me, without fail.
The BBC, BuzzFeed, VICE News, Channel 4, Channel 5, ITV, Forbes, GQ, the Guardian, the Telegraph, the Financial
Times they all queued up to come to our office, to cover our story and to interview us, and the headline image of the story nearly always featured a picture of that big blue slide. In one BBC story they called our office the ‘coolest’ in the country, and when VICE came to make a documentary about us, the crew spent most of their time shooting the ball pool and big blue slide from different angles.
In hindsight, our entire founding team all agree, one of the best financial decisions – albeit stupid, unintended and immature that we made, was spending £13,000 of our investment on that big blue slide.
Admittedly, I only saw the slide used a handful of times in the seven years that I ran the company, but the slide’s useful- ness should never have been measured on its intended purpose, but rather on its effectiveness as a marketing message.
The slide screamed something about us to the world; it said, ‘this company is different’, ‘this company is young’, ‘this company is disruptive’ and ‘this company is innovative’. It communicated that message louder and more convincingly than any marketing campaign we ever crafted.
If a picture paints a thousand words, our big blue slide wrote an entire book – and that book is a story of our values, who we are, what we believe and how we behave.
I’m absolutely not telling you to go and blow your money on a big blue slide, but I am telling you that your public story will be defined not by all the useful practical things that you do-in many cases, not even by the products that you sell – but by the useless absurdity that your brand is associated with.
My friend recently joined a gym in London called Third Space. Third Space is arguably the largest high-end gym in London, spanning three pristine floors. In an attempt to get me to join he said, ‘You should come – it’s so good, they even have a 100-foot climbing wall in the entrance!’
Did you see what he did there? He did what everyone does. He didn’t mention their hundreds of useful exercise machines, the incredibly useful weight racks or the very useful changing rooms; he sold me the gym based on the most absurd quality it possesses.
And I must be honest, it worked. I’ve now been a member of that gym for more than a year, and in that year, I have never, not once, seen anyone go anywhere near the 100-foot climbing wall.
But when you hear that a gym has a 100-foot climbing wall, your subconscious mind thinks, If the gym has a 100-foot climbing wall, then they must have everything! or If a gym has 100-foot climbing wall, it must be huge. Or if you’re Gen Z or a millennial, If a gym has a 100-foot climbing wall they must have so many other fun, crazy things that I can take a picture of and upload to social media!
A brand’s publicity is defined more by its useless absurdity than its useful practicalities; the most absurd thing about you says everything about you.
★TESLA’S MARKETING STRATEGY IS ABSURDITY
In a fraction of the time that it’s taken some of their competi- tors, Tesla has become one of the world’s bestselling car companies. The Tesla Model Y is the bestselling car in Europe and the Tesla Model 3 is one of the bestselling luxury vehicles in the United States. Tesla’s advertising budget is $0.
Like my marketing agency didn’t need a sales team and my gym probably doesn’t need a marketing team, Tesla doesn’t need to advertise because it’s a brand driven and defined by its absurdity.
It is riddled with intentionally absurd features to make its customers, the media and the public at large talk, laugh and spread the word about the car. Whereas most car companies have named their driving modes ‘Comfort’, ‘Standard’ and ‘Sport’, Tesla has amusingly embraced the power of absurd- ity by calling theirs ‘Insane’, ‘Ludicrous’ and ‘Ludicrous+’
In 2019, Teslas got a new ‘Caraoke’ function which allows owners to turn their car into a karaoke machine, and in 2015, Tesla famously released a ‘Bioweapon Defense Mode’ which protects the driver from ‘bioweapons’. They introduced an ‘Arcade’ mode which turns the car into an arcade on wheels; they installed ‘Easter eggs’ – hidden features that the driver has to find, which include making the car look like Santa’s sleigh, turning the road ahead into a rainbow, and even a ‘farting mode’ that causes the car to produce fart sounds from any passenger seat in the car.
All these things sound immature and stupid – like my big blue slide – but when you delve into the social-listening data, these absurd features produce more conversations than the useful features of all of their key competitors combined.
People have no incentive to think, talk or write about things that maintain the status quo, but they have a tremen- dous incentive to share absurd things that mock it, tear it down and laugh in the face of it.
★ BEER SHOWERS HELPED MAKE BREWDOG BILLIONS
BrewDog, the indie brewery, became the fastest-growing beer brand in the UK in 2019. They too have been in operation for far less time than most of their rivals and they have a fraction of the marketing budget of some of their global competitors
some two centuries old or more. But once again, this financial disadvantage hasn’t inhibited their marketing reach, because their strategy – for better or for worse intentionally evokes the power of absurdity in spreading their message.
When they launched the BrewDog hotel chain in 2021, they installed beer fridges inside every shower so that custom- ers can guzzle beer as they wash. I’m pretty sure nobody – at least no sane person – is going to use it, but a quick Google Images search shows that a significant number of photos of the hotels contain a picture of the beer fridge in the shower. The most absurd thing about the brand is saying everything about the brand.
Without directly saying anything at all, the presence of that beer fridge screams to customers: ‘we are for beer lovers’, ‘we are a punk brand’, ‘we don’t care about the rules’, ‘we are disruptive’, ‘we have a sense of humour’, ‘this hotel is for people that are different’, and again, if you’re in a younger generation, it’s saying, ‘this hotel will give you great content for your social media channels’.
If it’s that powerful, why doesn’t everyone lean in to absurd- ity? Because most business leaders, CFOs and accountants demand direct measurable ROI from their marketing, brand and product initiatives. The absurdity I’m describing is incredibly difficult to measure or quantify, and so like many things in marketing, storytelling and branding – you either believe in it or you don’t.
From what I’ve witnessed over my decade-long tenure of advising the world’s leading brands, those few people that do believe in, and act upon, the power of absurdity, are nearly always company founders (appointed CEOs are typically more
risk averse, have less financial control and have less conviction about brand values). Their marketing dollar nearly always goes ten times further than their rivals’, and they always seem to outpace the rest of their industry over the long term. Most importantly, they’re just more fun people to work with.
If you look around you, you’ll notice that the most powerful brand storytelling leverages the power of absurd- ity, illogicality, costliness, inefficiency and nonsensicality, because convention, similarity and rationality, for all their usefulness, convey no message about who you are and who you aren’t.
‘Meaning is conveyed by the things we do that are not in our own short-term self-interest by the costs that we incur and the risks we take.
Rory Sutherland, vice chairman of the Ogilvy advertising group
★THE LAW: USELESS ABSURDITY WILL DEFINE YOU MORE THAN USEFUL PRACTICALITIES
You’ll be known for the most absurd things you do. Those absurd things will do the job of saying everything about you, and you won’t have to say anything at all. Absurdity is more effective and more fun, but it’s not for the faint-hearted: it’s for the risk taker, the idiot and the genius.
Normality is ignored.
Absurdity sells.
The Diary Of A CEO
LAW 11
AVOID WALLPAPER AT ALL COSTS
This law will teach you the science of grabbing people’s attention in everything you write, speak and produce. It’s the underlying secret of all of the world’s most famous storytellers, marketers and creators.
‘I’m going to have to cut my arm off.’
For six days, Aron Ralston kept himself alive with fierce determination, awe-inspiring hope and a powerful innate human survival tool – which we all have built into our system that allowed him to tune out of the extreme pain he was experiencing for long enough to cut his own arm off his body.
On a spring day in 2003, Ralston drove alone to Moab, Utah, to mountain-bike the dramatic Slickrock Trail and spend a few days solo climbing canyons in preparation for ascending Alaska’s Denali (formerly known as Mount McKinley) later in the year. He climbed into Bluejohn canyon on 26 April, and 5 miles in came to a section where huge boulders were wedged between the walls of the canyon. As he slowly worked his way through, he dislodged an 800-pound rock, which slid down and crushed his right hand against the canyon wall.
Not only was his hand reduced to a bloody mess, but he couldn’t move the boulder. He was stuck. He hadn’t told
anyone where he was, had only brought with him a pouch of water and a few snack bars, and wouldn’t be declared miss- ing for days.
Ralston was trapped.
After an agonising period of trying to free his trapped arm and going through disbelief, shock and despair, he finally composed himself.
The cheap multi-use pocketknife that he’d brought with him was his only conceivable path to freedom. Over the next few days, he attempted to chip away at the boulder, to no avail. He then tried to chip away at the canyon wall – again, to no avail. Time was running out; he had started with 3 litres of water and now he was down to 1.
As he recalls: ‘I was over the pain, I was over the fear, but I couldn’t get over my body’s need for water.’
Ralston had been imprisoned in the canyon for five days.
With no other option, he resolved to do the unthinkable. With his free hand he assembled his things, took a deep breath, and set about cutting off his arm.
He stared momentarily at the dirty blade of his pocket- knife, and then plunged it into his trapped arm. The ampu- tation took over an hour, and it worked: he was conscious, he was alive, and he was now free.
Exhausted and bloodstained but overcome with relief and adrenaline, he made his way back out of the canyon. After 6 miles, he was met by some tourists who led him to safety.
It is striking that in Ralston’s own book, and in the film 127 Hours, which portrays his ordeal, just how curiously unemotional, focused and calm he was about his predicament.
‘Everything else – the pain, the thought of rescue, the accident itself – recedes. I’m taking action,’ he said
This, while an extreme example, highlights one of the many in-built survival tools of the human brain: its ability to tune out information that it doesn’t consider to be relevant, so as that we can focus on the new and unfamiliar information that is more important for our survival and wellbeing, even in Ralston’s case if that information comes in the form of inconceivable pain, a dire situation or feelings of hopelessness.
When describing parts of his injuries, Ralston remarked in his book: ‘Perhaps the strangest thing is that I didn’t feel pain from the injury so many other things were wrong with my circumstances that it wasn’t important enough to warrant my brain’s attention’.
What Ralston is describing is the incredible psycho- logical phenomenon of habituation.
★HABITUATION
Habituation is an in-built neurological device that helps us to focus on what matters, and tune out of things that our brain doesn’t need to focus on.
Holocaust survivor Elie Wiesel, who was imprisoned in Auschwitz and Buchenwald concentration camps during the Second World War, described how he and his fellow prison- ers were exposed to the constant threat of violence and death, as well as the horrific sounds and ghastly smells of the camps.
As they spent more time in the camps, their brains under- went habituation: becoming desensitised to the dangers, the sounds, the smells and other hardships they faced.
Pavel Fischl, a young Czech poet who arrived in the Nazi-controlled Theresienstadt ghetto, described how people there quickly got used to their horrific new surroundings:
We have all gotten used to the noise of steps in the barracks’ hallways. We have already gotten used to those four dark walls surrounding each barracks. We are used to stand[ing] in long lines, at 7am, at noon, and again at 7pm, holding a bowl to receive a bit of heated water tasting of salt or coffee, or to get a few potatoes. We are wont to sleep without beds, live with- out radio, record player, cinema, theatre, and the usual worries of average people. [W]e have gotten accustomed to see [ing] people die in their own dirt, to see the sick in filth and disgust […] we are habituated to wear one shirt one week long; well, one gets used to everything.
Habituation is a phenomenon in which the brain adjusts to repeated stimuli by ignoring or downgrading their significance.
For example, if you are in a room with a constant low-level hum, it might annoy you at first, but you probably won’t even notice the sound after a few minutes, because your brain has adapted to it and is no longer processing it.
This cognitive phenomenon frees up mental capacity that we need for other things – new things that might aid in our survival – and it can be observed in any animal with a brain. In one study, researchers put rats in a maze that had chocolate hidden at the end of the maze. They then moni- tored the rats’ brain activity: ‘The first time the rat entered the maze sniffing the air and scratching the walls, its brain exploded with activity, as if analysing each new scent, sight, and sound. Although the rat looked calm, the rat’s brain was furiously processing everything.’
But once the rat had found the chocolate, when placed back into the maze to find a second piece of chocolate hidden in the same place, the brain activity completely disappeared.
The rat was now on autopilot. It no longer needed to process things it had habituated to the maze and so it glided on autopilot straight to the chocolate without pause, in the same way that we all glide unconsciously through our habituated lives, to work, to the gym or to a familiar part of our house, without thinking, processing or even noticing familiar envir- onmental information.
Because the rat’s brain was now on autopilot, it had freed up cognitive capacity to think about other things. So theoretically, the rat could glide to the chocolate while also pondering a complex problem it was having at work that day. In a world where we didn’t habituate to our environment, our brains might implode from the amount of sensory stimuli it’s required to process.
★SEMANTIC SATIATION
Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father. Father.
Have you ever noticed that if you repeat any word over and over and over again, it begins to become just a sound? Even when you look at the same word written repeatedly, as seen above, the brain will eventually tune out its meaning. This loss of familiarity sometimes makes a word look like it belongs to another language. Stare longer and it may appear as merely a collection of letters, stare even longer and it’ll look like meaningless marks on the paper.
You’ve probably had your own experiences where the repetition of a word suddenly made it feel weird, alien and confusing – where you’ve used a word so frequently that you’ve had to pause for a second, to check the word made sense.
This is all because of a form of habituation called seman- tic satiation a term coined by Leon James, a professor of psychology at the University of Hawaii’s College of Social Sciences – in which the meaning of a word or phrase becomes temporarily inaccessible due to repetition and the brain’s inclination to tune out of things it doesn’t need to commit resources to.
This effect can be seen in our optical senses too. When patients are given a drug that paralyses their eye muscles, after a few seconds the world in front of them will begin to fade away. They haven’t gone to sleep, but the inability to move their eye muscles means that the exact same pattern of light is falling on the receptors in the back of the eye, and for all of our senses, when a certain input is constant, we grad- ually tune out of it by a process of habituation that cancels out the constant, which in this case is the entire visual world. A hand waved in front of their face (or anything moving) would be enough to bring back the patient’s visual world.
★HOW HABITUATION HAPPENS
Neuroscientist Eugene Sokolov says that when a stimulus is experienced – words, sounds or even physical sensations – the nervous system essentially creates a ‘model’ of what caused it, what it is and how the brain should react to it. With most sensory stimuli, no reaction is needed, so when an unimport- ant stimulus occurs, the model that the brain creates includes instructions to ignore that stimulus in future.
A hypothetical habituation curve in response to repeated stimuli.
★FEAR SLOWS HABITUATION
WARNING. WARNING. WARNING.
7
WARNING.
WARNING. WARNING. WARNING. WARNING.
WARNING. WARNING. WARNING. WARNING.
WARNING. WARNING. WARNING. WARNING.
WARNING.
Interestingly, any word can be affected by semantic sati- ation, but the amount of time before words begin to lose their meaning varies. For example, emotive words or those that have dramatic connotations – like ‘WARNING!’ – appear to lack the satiation effect because our brain draws up other strong associations with the word, making it unlikely that its meaning becomes lost.
Of all the facial expressions, those related to threats seem to make the biggest impact. For obvious, survival-orientated reasons, it’s important for us to distinguish a threatened face from a calm face. Even at just seven months old, babies have been shown to pay more attention to fearful faces when compared with neutral and happy faces.
Having A/B tested more than 200 YouTube thumbnails across my YouTube channel over the last two years, I’ve consistently found that the more animated, threatening or scary the face on the thumbnail, the more clicks the video will get. Neutral faces – which the brain has become attuned to ignore and deems ‘wallpaper’ perform significantly worse in terms of clicks, across all channels.
★YOU BECOME HABITUATED TO MUSIC AND SOUND
Over the years, Leon James showed that semantic satiation is more than just something that has an impact on things we read: it’s at work on every sight, scent and sound in our life.
If you’ve got a cat or dog, you may have noticed how easily they seem to fall asleep while you’re watching Netflix, talking or blasting music – this is due to the same process of habituation. In one study, a loud sound was played to a sleep- ing cat, and the cat immediately woke up. But as the sound was played more and more, the cat took a little longer to wake up each time, until it just remained sleeping. However, if the tone was varied slightly, the cat was immediately awake.
James also explored this phenomenon in music. He found that the songs that made it into pop charts the fastest – and thus were played on the radio more often were also the ones that fell out of the charts the fastest they had reached
habituation. While the songs that slowly climbed the charts to the top spots dropped away just as slowly, fading away versus burning out.
With this notion in mind, one might understandably wonder why we like to listen to a song more than once. This question brings me to another psychological phenomenon called the ‘mere exposure effect’, referring to the tendency of people to develop a preference for things or people that are more familiar to them, because of repeated exposure.
In a 1968 experiment conducted by social psycholo- gist Robert Zajonc, participants were exposed to a variety of nonsense words, each presented either 1, 2, 5, 10 or 25 times. Participants rated words they had heard 5, 10, and 25 times as more positive than the ones with 1, or 2 expo- sures. The mere exposure effect has since been proven in several further experiments.
So if new things grab our attention, but we like things when they’re familiar, is it possible that there’s an optimal level of exposure to something, where it’s both new enough to engage our brain, but old enough for us to like it? The answer is yes, and scientists call it ‘the optimal level of exposure’.
Creating products that hit that sweet spot of new enough to grab the brain’s attention, but familiar enough to be loved is the plight of most record labels and producers. This is why they will create several remixes of a hit song, why new artists sample old-school classics, and why most songs have familiar riffs, sounds and melodies.
WE BECOME HABITUATED TO SMELLS
Your brain habituates to smells too; the reason why people often ask the friend stood next to them if they smell is because receptors in their nostrils have become habituated – they can no longer smell their own stench – and signals are no longer being sent from their nasal receptors to their brain.
If you’ve ever sampled perfumes in rapid succession, you’ll be familiar with this phenomenon. Perfume sellers will sometimes prompt you to smell coffee beans between samples in an attempt to reduce the effects of this nasal habituation.
In one habituation study, researchers gave people a bedroom air freshener that dispensed a strong but pleasant pine-like smell, in an equal quantity, every day for three weeks. Researchers remarked that ‘every day, the partici- pants became less sensitive to the odor, and they would increasingly ask us, “Are you sure it’s still working!?””
★HABITUATION AND SEMANTIC SATIATION IN MARKETING
There’s irony in the fact that I spent so long reading research on the term ‘semantic satiation’ – literally thousands of art- icles, studies and videos that the term slowly lost its mean- ing and became wallpaper in my mind.
On several occasions, while writing and researching this law, I had to stop to double and then triple check I was using the right phrase, because my brain had seemingly become numb, desensitised and unfamiliar with it.
Similarly, marketers are rethinking their sales ploys thanks to the new research on this concept. One timely example is what people are calling ‘Black Friday numbness’.
Thanks to tremendous overuse, ‘Black Friday’ is no longer the valuable hook it once was. We’ve repeated it so much that for many, the term has become as indistinct as the wallpaper in their bedroom.
In marketing, any word or phrase that is effective will eventually be exploited, abused and disempowered. Author and journalist Zachary Petit said:
Another interesting example can be the word ‘revolu- tion’. In 1995, a journalist colleague of mine and I took up a project after noticing the frequency of the word revolution/revolutionary in press ads. We scanned vari- ous editions of a newspaper from 1950 till 1995. Our findings indicated that the word ‘revolution’ was only sparsely used till the late 1960s, mainly for actual polit- ical revolutions.
However, by the late 1960s, the word was frequently repeated by both, left and right mainstream political parties, and even youth groups. Then in a mid-1970s edition of the newspaper, we came across a press ad of a furniture brand that claimed its office chairs were made with ‘revolutionary Swedish technology’. After that we came across ad after ad for electronics, medicines, chocolates, milk, cooking oils and detergent brands, all claiming that they were ‘revolutionary’.
A couple of decades later, the word ‘revolution’ had been used so often that it lost its meaning, both politically and from a marketing standpoint. Its power had effectively vanished.
★BYPASSING THE HABITUATION FILTER
Here’s a secret that I would like you to keep to yourself in order to avoid the exploitation, overuse and disempower- ment of the words.
When I launched my podcast The Diary Of A CEO on YouTube, we were generating millions of monthly views to the channel, but about 70 per cent of those that watched the podcast frequently didn’t subscribe. In a lazy attempt to get them to subscribe I added the phrase ‘please like and subscribe’ to my introduction, which is the phrase that every YouTube creator I’ve ever watched adopts.
It had virtually no impact on my view to subscription rate, and my channel continued its painfully slow trickle of new subscribers. Thinking more deeply about why this might be, I hypothesised that because the phrase ‘like and subscribe’ is the default call to action for all creators, maybe viewers’ brains had habituated to it. Maybe that phrase is so overused, they didn’t even hear me saying it.
I crafted a new phrase based on the laws of habituation. In the opening seconds of my YouTube videos, I said:
‘Seventy-four per cent of you that watch this channel frequently do not subscribe.’
(This is so specific, revealing and thought-provoking that the brain pays attention to it, bypassing the habituation filter.)
‘If you’ve ever enjoyed our videos, please could you do me a favour, and hit the subscribe button?”
This is a call to reciprocity – a a psychological phenome non that shows people will do something for you if they feel you’ve done something for them.)
‘It helps this channel more than you know, and the bigger the channel gets, the bigger the guests get.’
(This is a promise of a future reward – if you subscribe, you’ll be rewarded with bigger guests.)
After saying this new ‘call to action’ just once, the chan- nel’s viewer to subscriber rate increased by a staggering 430 per cent! The channel has become the fastest growing YouTube podcast in the world, outpacing the legendary Joe Rogan. It went from 100,000 subscribers to millions of subscribers in months, and SocialBlade.com forecasts predict it will exceed 30 million subscribers in the next five years.
‘Wallpaper’ as I call it the overuse of popular terms, phrases and calls to action to the point that the brain habituates to them and tunes them out is the enemy of effective and successful storytelling and market- ing. Marketing teams default to using common phrases through laziness, risk-aversion and a lack of creativity. But this law shows that if you have an important message and you want to infiltrate the brain’s circuitry, grab its atten- tion and be received with meaning, use terminology that is unexpected, unusual and unsaturated.
★REPETITION ISN’T KEY
In marketing, we’re told that repetition is key. A cherished principle in mass-media advertising seems to be that the more your customer sees your advert, the more likely they are to act upon it. This is true in principle, because all learning does
depend on the repeated presentation of a certain stimulus, but it’s important to understand the conditions that make a repeated stimulation constructive, as in learning, tive, as in satiation. or disrup-
In multiple studies, researchers have found that the rela- tionship between frequency of exposure of an advertising message and its meaningfulness can be represented by an inverted U.
Meaning
Exposure
The rising part of the curve (which indicates increase in mean- ing) is called ‘semantic generation’ and the descending part (loss of meaning) is ‘semantic satiation’. The sweet spot for advertisers is where the curve changes inflection. This is where the term, message or phrase has reached optimal meaning and effectiveness in the mind of your customer.
Once it’s reached this critical point even if it’s still memorable – it’s no longer an effective message to create action, drive sales and evoke an emotional response. At this point – if the phrase, words and sounds were originally employed to drive action – it’s time to get creative and think of a new way to pierce the brain’s habituation filter.
Great marketing is uncomfortable. It springs a dormant brain into a neurological frenzy.
Strong marketing demands an opinion, a response and an emotion. It doesn’t want to be liked it calls for either love or hatred. And once it’s finally reached a point of habituated familiarity, it changes shape, ensnaring its audience’s atten- tion once again.
★THE LAW: AVOID WALLPAPER AT ALL COSTS
Words really matter, and the fate of ideas, politicians and brands can be decided by them. Knowing how to commu- nicate in a way that cuts through, grabs attention and beats our habituation filters, will be the difference between success and failure in many endeavours in our lives. Your brain has a profound prehistoric survival tool, its habituation filter, which allows it to adapt to and tune out of even the most unthinkably painful, annoying or smelly stimulus. In order to be heard, tell stories in an unrepetitive, unfiltered and unconventional way.
Make people feel something, either way.
The Diary Of A CEO
LAW 12
YOU MUST PISS PEOPLE OFF
وتمولي
This law will explain why pissing people off is an unavoidable conse quence of building a brand that matters and why ‘hate’ is a signal that you’re saying the right things.
In preparation for this book, I wandered through a Barnes & Noble bookstore in Los Angeles conducting a bit of observa- tional research on trends within the publishing world. One of the clearest and most striking observations I had was that a huge number of self-help books are now covered in curse words!
This trend of swearing on the front cover of books exploded in 2016 with Mark Manson’s The Subtle Art of Not Giving A F*ck
which Manson, who I interviewed in preparation for this book, tells me has sold more than 15 million copies. It is one of the clearest signs that authors who are competing in satu- rated genres – are trying to avoid ‘semantic satiation’ and grab your brain’s attention by bypassing its ‘wallpaper filter’.
By 2018, the top 25 books on Amazon’s bestseller list included as well as The Subtle Art of Not Giving a Fck-books titled What the F@# Should I Make for Dinner?, 50 Ways to Eat Cock, Unfck Yourself and Calm the F*k Down. Archive data shows that ten years ago, none of the books at the top of the charts had a profanity in their title.
Sarah Knight’s editor Michael Szczerban-who published several of her cuss-covered, multi-million copy selling books, including Calm the F**k Down, said:
Publishers and authors are trying to find ways to cut through all the noise and reach people. This seems to be one way that some books can do that, and when that happens, other people try to follow in those footsteps. Some people don’t like it, some retailers don’t want to carry a book because it has a swear word on the title. But the upside more than wins out.
When he says, ‘but the upside wins out’, he’s touching on one of the most foundational principles of marketing, avoiding semantic satiation, and being heard.
It’s a principle that all my marketing teams have exploited, preached about and executed for more than a decade, so much so that we wrote it on our office walls: ‘Make people feel something either way.’
Indifference – when people don’t love you or hate you is the least profitable outcome for a marketer.
Indifference to your words, your message or your calls to action is the surest path to the dreaded habituation filter mentioned in the previous law.
I interviewed Jane Wurwand, the illustrious founder and chief visionary of Dermalogica and The International Dermal Institute. Wurwand is one of the most recognised and respected authorities in the beauty industry. Under her leadership, Dermalogica has grown to be a leading skincare brand, used by more than 100,000 skin therapists in more than 100 countries around the world, and consequently she’s become one of the richest women in the beauty industry.
Her number one marketing secret to avoid her custom- ers’ habituation filter is to say things and do things that ‘piss people off. She explained:
We have to be prepared to piss off 80 per cent or we’ll never turn on 20 per cent. If we don’t, we’ll be middle of the road, mediocre, average, palatable, but not defin- able. That’s a product. That’s not a brand. A brand triggers an emotional response. And so that became our watchword in marketing: ‘We need to piss off 80 per cent and turn on 20 per cent.’ We don’t need every- one to like us. And if we’re not being slightly disruptive, then everyone’s going to like us, but they’re not going to love us. If some people hate us, some people will love us.
But be wary; all emotional tactics have a shelf life – emotional hooks have diminishing returns as the brain habituates and downgrades its meaning.
When comparing the chart dominance of cuss-covered books between 2018 and now, it’s clear that the effectiveness of this swearing tactic is starting to wane. The thing that makes any emotional messaging effective, ultimately makes it popular, which by the power of habituation quickly turns it into wallpaper.
★THE LAW: YOU MUST PISS PEOPLE OFF
Don’t be afraid of alienating people with emotional, bold or even divisive marketing approaches – triggering an emotional response that engages 20 per cent of your audi- ence and enrages 80 per cent can be more valuable than an approach to which 100 per cent is indifferent.
Some people will love you.
Some people will hate you.
Some people simply won’t care.
You will only connect to the first two.
But not to the third.
Indifference is the least profitable outcome.
The Diary Of A CEO
LAW 13
SHOOT YOUR PSYCHOLOGICAL MOONSHOTS FIRST
This law will show you how to create huge perceived value in your customers’ minds with shockingly tiny, often free, superficial changes to your product and it reveals the psychological tricks your favourite brands are using on you right now.
My hairdresser has been manipulating me for three years.
He comes to my house at the same time on the same day, every week, and delivers the same haircut. I’ve stuck with him because I’ve always believed he has the greatest atten- tion to detail, he’s a perfectionist, and so I’ve always trusted him to cut my hair.
One day, on one of his routine visits, we had our first ever issue. After finishing my haircut, he took the apron off me and announced, ‘You’re done, mate.’
Instinctively, something just didn’t feel right to me. For a reason I couldn’t quite articulate, it felt as if he had rushed my haircut, and like he hadn’t paid his usual attention to detail.
I replied, ‘Really? That was quick! I dubiously walked over to my kitchen mirror and began to examine my scalp in
search of the patch that he must have missed. Surprisingly, the haircut was perfect, as usual.
Still believing he had rushed the haircut, I walked over to my phone to check the time – he’d spent the same amount of time cutting my hair as he did every week.
Confused as to why I felt so inexplicably short-changed, I said to him, ‘For some reason that felt really rushed.’ For a moment he looked back at me totally confused, and then, as if struck by a hilarious joke, he burst into an uncontrollable fit of laughter. ‘My bad, my bad, mate; because we were talking so much, I forget to do my “end-of-trim routine”! he explained.
End-of-trim routine? He went on to tell me about a psychological trick he calls ‘one last snip’, which he’s been using on me and all his clients for the last ten years.
He said he’s noticed that clients always feel like he’s done a better job if at the end of the haircut he pretends to inspect their finished haircut before doing one last – fictitious – snip.
So at the end of every haircut – including all of my previ- ous haircuts – he’s done an ‘end-of-trim routine’ that involves turning off the electrical hair clippers, taking a long pause, walking around the client as if inspecting their hair closely, and then pretending to do one tiny final snip on their hair, before announcing that he’s done.
Today, he had simply forgotten this little routine, and I had instinctively felt it. I felt that my haircut was worse, rushed or negligent because he had simply forgotten a ten-second psychological trick which had subconsciously convinced me he has tremendous attention to detail.
In reality, his ‘one last snip’ trick does nothing to improve my hair – he admitted he doesn’t even cut any hair during this routine, but it does a lot to improve my perception that
he’s done a thorough job. This is the power of a psychologic al moonshot’, a term coined by Ogilvy’s Rory Sutherland.
A psychological moonshot is a relatively small investment that drastically improves the perception of something.
Psychological moonshots prove that it’s nearly always cheaper, easier and more effective to invest in perception than reality.
★UBER IS A PSYCHOLOGICAL MOONSHOT
‘What if you could request one on your phone?”
That’s the question Travis Kalanick and Garrett Camp asked each other one freezing night in Paris. They were over from the United States for a tech conference, wait- ing endlessly for a cab, experiencing a misery many of us will be familiar with: not knowing if, or when, your cab is coming sucks. The simple question they asked that night, borne from uncertainty and frustration, would lead to the creation of Uber, now the default taxi app for more than 100 million people every month, in 600 cities and 65 countries.
In high-stress situations, when we’re late for a flight, a meeting or an event, every second feels like a minute, every minute feels like an hour and every hour feels like a day. The feelings of angst this scenario creates is one we can all relate to; this is the awful anxiety of customer uncertainty.
Reducing their customers’ psychological friction became Uber’s key challenge, and so they launched an entire in-house team of behavioural (data) scientists, psychologists and neuro- scientists in what would be called ‘Uber Labs’.
In their research. Uber Labs discovered several key psychological principles that impact a customer’s satisfaction with Uber and their perceptions of the overall experience the peak end rule, idleness aversion, operational trans parency, uncertainty anxiety and the goal-gradient effect. Understanding these five powerful psychological forces allowed Uber to completely redesign an entire industry and create a business valued at $120 billion.
- THE PEAK-END RULE THE TWO MOMENTS THAT MATTER MOST
The peak-end rule is a cognitive bias that describes how people remember an experience or event. Simply put, we judge an experience according to how we felt at its peak and at its end, rather than by some perfectly aggregated aver age of every moment of it. Crucially, this applies to both good and bad experiences! Businesses and brands take note: customers will judge their entire experience on just two moments – the best (or worst) part, and the end.
This perspective helps us to understand why a terrible flight at the start of a holiday has less negative impact on satisfaction than a terrible flight at the end of a holiday. Why a wonderful dinner can be tainted by a surprise surcharge on the bill, and why a two-minute disagreement at the end of a positive date night with your spouse will taint your memory of the whole evening.
It also explains why Uber drivers are trained to be excep tionally kind to you at the end of a ride, moments before you rate them and offer them a tip.
- IDLENESS AVERSION: OUR NEED FOR JUSTIFIABLE BUSYNESS
Uber Labs cited research that people who are busy are happier than people who are idle even if they are not busy of their own volition (i.e., you’ve coerced them into some activity). In fact, even a false justification a spurious reason can motivate people to action, such is our appetite for distraction and activity. The implications of this research are that many of the ‘goals’ we pursue are really just excuses to keep ourselves busy.
For Uber, this meant that if they could keep waiting customers busy by giving them something to watch or to engage with, those customers would be significantly happier, and less likely to cancel rides.
Instead of merely letting users know what time their driver was due, the Uber Labs team installed several engag- ing animations – including a moving car on a map that gives customers something to watch while they wait in an effort to avoid ‘idle unhappiness’.
Remarkably, Uber’s cited research shows that the majority of people would choose a wait time that was long
if they’re able to do something during the wait over a short wait time in which they’re not able to keep themselves
busy. This, in part, explains why restaurants bring you free- bies while you wait, why streaming sites like Netflix and YouTube play previews when you hover over videos, and why Google Chrome installed a T-rex game that appears when you lose connection.
Studies show keeping your customer busy can improve customer happiness, retention and conversion by more than 25 per cent!
- OPERATIONAL TRANSPARENCY: BRANDS SHOULD BE GLASS BOXES
Getting a cab back in 2008 came with a lot of uncertainty. A customer had no way of knowing when their taxi would arrive (or even if it would arrive), who was picking them up, or why it was taking so long. Back then, if you got into a cab without a meter, the driver would effectively pluck the price out of the air, based on their own guesstimate. Even when you got in a cab with a meter, you’d worry that the driver was intentionally taking a longer route to increase the fare.
This lack of transparency is poison to customer experi- ence; it breeds distrust, and distrust makes us sceptical, resentful and disloyal to a brand.
Given these insights, Uber Labs used a psychology principle called operational transparency and began explaining each step going on behind the scenes to show the rate of progress during the wait. They included the arrival time estimate calculation, gave a detailed breakdown of how the fare was calculated, justified estimates for everything and provided quick updates – with an explanation – when some- thing changed.
These changes resulted in an 11 per cent reduction in the post-request cancellation rate, which to Uber, with more
than 7 billion trips taken per year, is a multi-billion-dollar improvement.
- UNCERTAINTY ANXIETY
In 2008, Domino’s Pizza experienced an interesting opera- tional and customer experience challenge. Customers who were waiting longer than they expected for their pizza would phone Domino’s to ask where it was. The whole process of pizza making would then be interrupted, because the person making the pizza would be asked why there was a delay by the person who’d answered the phone, and the customer would ultimately be given a vague and uncertain answer. A calling customer was unwittingly delaying the delivery of their own pizza, because of the lack of operational transpar- ency they’d been given.
Some pizza chains responded to this challenge by invest- ing in warming bags to keep the pizzas hot, hiring more staff and drivers, launching money-back guarantees on delivery times and offering free breadsticks for slow deliveries, but their phones carried on ringing.
What they were all missing was the psychological frustration at the heart of the problem – people didn’t want faster delivery they wanted less uncertainty about their delivery.
Domino’s understood this, and in 2008, using their pre- existing in-house order-management software, they created the now famous ‘Domino’s Pizza Tracker’, which shows customers exactly where their order is in a five-step process.
This small psychological insight and the innovation it produced changed Domino’s business. Angry phone calls plummeted, customer satisfaction and retention skyrock- eted and Domino’s saved and made hundreds of millions in the process.
Research published in the journal Nature showed that it’s less psychologically stressful to know something negative is about to happen (e.g., our pizza is going to be 30 minutes late) than to be left in uncertainty (e.g., we have no idea where the late pizza is). That’s because the area of our brain that tries to anticipate consequences is most fired up when we’re faced with uncertainty – it’s on edge. As Rory Sutherland explains in his book Alchemy, a ‘DELAYED’ alert on your scheduled flight is much more mentally irritating than a ‘DELAYED 50 MINUTES’ alert.
Every day, more than 300 Shinkansen (bullet) trains arrive and depart Tokyo Station’s four platforms, at an average interval of roughly four minutes. The trains only stop at the station for ten minutes and it takes two minutes for the passengers to disembark and three minutes for new passen- gers to board.
‘TESSEI’, a subsidiary of Japan Railway, is in charge of cleaning these bullet trains, making them hygienic for the more than 400,000 passengers that use the service every day. Customers would often complain about the cleanliness and hygiene of these trains, in light of these fast turnaround times assuming the trains couldn’t possibly be properly cleaned in such a short window of time.
Teruo Yabe, TESSEI’s CEO, wanted to change this perception; he believed that the trains were in fact very clean but some customers didn’t have enough visibility to believe it. So instead of hiring more cleaners, Yabe decided to make the cleaners stand out: he changed the colour of employee uniforms from pale blue shirts to unmissable bright red jackets, and he asked cleaners to put on a show – which is
now internationally known as the ‘seven-minute Shinkansen theatre’ – to greet incoming and outgoing customers.
As the train pulls into the platform, cleaners line up by the doors and bow as it pulls in. Holding open bags, they greet the arriving passengers and thank them for handing over their rubbish. Staff then whizz through the train, pick- ing up rubbish, sweeping and sanitising surfaces, and once complete, the cleaners line up by the train and perform a second bow to show respect for the departing train and its new passengers.
Not only did hygiene complaints plummet, but it is reported that the cleaners with their newfound pride in their work inspired by the increase in respect they received from passengers cleaned more thoroughly, with more joy, and more motivation. What would become known as the ‘7-minute miracle’ repositioned the train line as being one of the cleanest in the world.
This shows that even hygiene uncertainty can be rectified with a psychological moonshot, and offers further evidence that it’s nearly always cheaper, easier and more effective to invest in perception than reality.
- THE GOAL-GRADIENT EFFECT: SPEEDING UP NEAR THE FINISH LINE
In 1932, a behavioural scientist named Clark Hull was studying rats in a maze. Using sensors attached to the rats, he monitored their speed as they ran towards a food reward. Hull observed that the nearer the rats came to the end of the maze and its accompanying prize – the faster they moved.
He called this principle ‘the goal-gradient effect’.
It’s been repeatedly proven that what motivates us most is how close we are to achieving a goal: we work faster the closer we are to success.
Participants collecting stamps as part of a café’s reward programme buy coffee more frequently the closer they get to earning a free drink; internet users who rate songs in return for gift certificates rate more songs as they approach the reward goal, and LinkedIn users are more likely to add profile information if they’re shown a ‘profile strength’ bar that details how close they are to completing their profile.
Uber Labs solved this problem with the design of their map, which goes to great lengths to emphasise just how close the car is from arriving at both the pick-up and the destination.
All of these psychological hacks have made Uber the most famous taxi company in the world, dominating their industry internationally. And because of the work done by the psych- ology experts in Uber Labs, the company now says it only takes 2.7 rides before someone becomes a permanent customer.
★THE POWER OF PSYCHOLOGICAL MOONSHOTS
The term moonshot is derived from the Apollo 11 spaceflight project, which landed the first human – Neil Armstrong – on the moon in 1969, and which was described by Armstrong as ‘a giant leap for mankind’. A psychological moonshot, is a giant leap forward using the power of psychology.
When I interviewed Rory Sutherland, he said:
It’s hard to increase customer satisfaction by making a train ten times faster: it’s much easier to increase customer satisfaction by using psychological principles to make it feel ten times more enjoyable. I don’t think governments like the UK government would need to spend £50 billion on faster trains if they just made the Wi-Fi work better while you’re on it. It seems likely that the biggest progress in the next 50 years won’t come from improvements in technology, but in psychology and design thinking.
Remarkably, the ‘close’ button in most lifts doesn’t actually work. Lift doors are designed to close after a certain amount of time, for safety and legal reasons. According to Karen Penafiel, former executive director of National Elevator Industry Inc., “The riding public cannot make elevator doors close any faster. But this illusionary placebo creates the impression of control, decreases uncertainty, makes you feel safer and in doing so increases customer satisfaction.
Some hand soap manufacturers put menthol, pepper- mint or eucalyptus in their products solely for the purpose of producing a tingling effect on your hands, which creates a powerful psychological effect also seen in medicine and supplements that something is working because you can feel it.
McDonald’s recently deployed their own psychological moonshots, installing self-service kiosks and large screens that show where orders are in the process, and giving custom- ers tickets once they’ve placed an order – leveraging the goal gradient effect and diminishing uncertainty, wait times and frustration in the process. This change produced a series of moonshot-sized results for the brand.
As McDonald’s former president Don Thompson said, ‘people eat with their eyes first’, visually seeing every item as opposed to words on a a list – makes you more likely to want it, which was a possibility not previously achievable with the limited space of in-store displays. Additionally, research showed the use of a touchscreen creates novelty and fun, which leads to an enhanced consumer preference towards more self-indulgent purchasing. Furthermore, without the potential shame of having to directly tell the cashier your embarrassingly long, gluttonous and potentially detailed order, customers felt psychologically safer to order more food.
This relatively small change delivered multi-billion-dollar results for the global franchise: sales rose almost 10 per cent, customer satisfaction improved and although the production process didn’t change, people’s perceptions of how ‘fast’ the ‘fast food’ restaurant is were impacted positively.
‘THE LAW: SHOOT YOUR PSYCHOLOGICAL MOONSHOTS FIRST
Psychological moonshots allow brands to create huge perceived value with tiny, often free, superficial changes. They are the first place entrepreneurs, marketers and creatives should look in their attempts to create the illusion of – value.
Do not wage a war on reality, invest in shaping perceptions.
Our truth is not what we see.
Our truth is the story we choose to believe.
The Diary Of A CEO
LAW 14
FRICTION CAN CREATE VALUE
This law will show you the counterintuitive truth that sometimes your customers will want your products more if you make their experi- ence worse.
During my time as a marketing CEO, I sat in numerous brand marketing meetings with our client Coca-Cola where their marketing executives were seemingly dumbfounded by the success of Red Bull and the wider energy drink industry.
Sugary drink sales were plummeting, yet the equally unhealthy, rancid-tasting energy drinks category was skyrocketing. What was making one category grow so much more successfully than the other? Our research revealed that customers in different categories had different expect- ations, and with different expectations come different psychological moonshots.
In my conversation with Rory Sutherland, he pointed out that Red Bull delivers on its psychological expectation of enhancing your performance and ‘giving you wings’ by intentionally making it taste bad. Because it tastes more like medicine than a pleasant fizzy drink, they’ve convinced their customers that it’s packed with powerful, effective chemicals.
Making things taste ‘better can make them less desirable depending on expectations.
One of my closest friends founded and ran one of the fastest-growing performance nutrition brands in Europe. He often confessed to me that the biggest product challenge they had was that their products tasted so good that customers didn’t believe they were good for them. At one point, simply didn’ they had seriously considered making products taste worse in an attempt to increase sales.
These examples prove that making things easier isn’t necessarily the path to a psychological moonshot; sometimes you have to do the opposite: increase friction, wait times and inconvenience, to achieve the same increase in perceived value.
General Mills launched several cake mixes in the 1950s under the famous Betty Crocker brand. To make the cake, you had to add water, mix it and bake it. It was a foolproof cake mix. It included powdered milk and eggs and was impossible to get wrong. When the cakes were launched, expectations were high. But the product didn’t take off and reception was luke- warm at best.
General Mills didn’t understand what had gone wrong.
It had wanted to save time for busy wives and mothers, but somehow that had fallen flat. It hired a team of psycholo- gists to investigate. Their conclusion was that although the product saved time and effort compared to making a cake from scratch, American wives and homemakers felt guilty about the assumption that they had spent hours baking when they hadn’t, or about having to admit that they had taken
a shortcut and hadn’t put the work in, so they went back to traditional baking.
General Mills might have considered an advertising campaign to address the issue but, driven by psychology, they went in another direction against all marketing conven- tional wisdom and towards a psychological moonshot. They took the egg out of the mix and printed ‘Add an egg’ on the front of the package. This ‘subtraction technique’ caused more friction, made the product less convenient and cost its customers more time – objectively resulting in a less valuable product but in doing so it made the baker feel more valu- able themselves, and consequently sales soared.
Similarly, every time a restaurant brings me a raw steak and a hot stone to cook it on, it’s clear to me that they’re inten- tionally or unintentionally employing a powerful psychologic moonshot.
Everyone’s steak preference is notoriously specific meaning steaks are one of the most returned food items to even the most high-end kitchens. It appears illogical that
asking a customer to cook their own food might increase their satisfaction and perception of value of the overall experience, but that’s precisely what happens when a hot stone is presented.
By bringing the meat raw, they’re bringing down my wait time, saving their chefs time, increasing my chances of satisfaction by allowing me to cook my own steak the way I like it (medium rare), giving me a sense of having invested effort in my meal, reducing complaints and returns and avoiding customer idleness by keeping me busy. In this psychological moonshot, operational transparency, idleness aversion and the goal-gradient effect are all at work at the same time!
Flight, hotel and insurance aggregator websites understand that friction can create value. They found that faster search times on their websites often resulted in fewer sales. They now artificially increase search times and show all the sites they’re searching in an attempt to convince you that they’ve done a thorough search, so you don’t have to look elsewhere. This tactic has resulted in more sales, better retention and higher customer-return rates.
★THE LAW: FRICTION CAN CREATE VALUE
It seems nonsensical that friction can create value, but companies that deploy psychological moonshots understand that humans aren’t logical – they’re irrational, unreasonable and fundamentally illogical in their decision-making and behaviour. Therefore, if you are to successfully influence them, sometimes you must create, produce and say things that don’t make sense.
‘Value’ does not exist.
It’s a perception we reach with expectations we meet.
The Diary Of A CEO
LAW 15
THE FRAME MATTERS MORE THAN THE PICTURE
This law explains how the way a product is presented to consumers drastically affects their perception of its value.
A single, trivial mistake shattered my love affair with my favourite brand.
You would typically find me covered in this one particu- lar brand of clothing from head to toe. A few years ago, I fell for the brand after discovering the founder’s story, his vision, his unrelenting devotion to detail, creativity, artistic flair, and the technical wizardry he poured into each masterpiece.
This brand crafted one-of-a-kind designs for everyday wear, all at a rather premium price point.
One fateful day, as I casually scrolled through social media, I stumbled upon a video the founder had posted. In it, he toured the production line in China where his creations came to life. The video aimed to flaunt the vast scale of the operation and the meteoric rise of the brand by illustrating how many products were being made, how they made them, and the process that governed the production line.
In that very instant, the spell was broken; the enchanting illusion the brand had cast over me evaporated.
It wasn’t the fact that the brand was produced in China, nor the faces of the workers creating the clothes, or even the conditions of the production line that jolted me. Rather, it was the sight of the very shoes I was wearing as I watched the video, regurgitated from a monstrous machine and tossed into a heap of thousands of identical pairs. It was the sight of the exact T-shirt I had on at that moment, haphazardly piled atop thousands of others in a gargantuan, dumpster-like container, with a cascade of shirts spilling over the edge like an overflowing rubbish bin.
Although the brand never explicitly made such claims, my infatuated mind had always perceived their products to be unique works of art, each lovingly handcrafted by the devoted founder himself. Logically, I would have guessed that mass production must have been involved somewhere, but these things aren’t governed by logic – they’re stories we choose to believe based on the evidence presented to us. Up until then, the only narrative the brand had woven was one of artistry, exclusivity and romance.
The way that something is packaged has a big impact on how it’s received. How something is framed affects how consumers perceive and value the brand. In this moment, the frame of my favourite brand changed irreversibly.
This isn’t a recent behavioural discovery. The famous Pepsi Challenge campaigns of the 1970s required customers to blind taste Pepsi and Coca-Cola out of plain white cups and their branded cans and bottles. People preferred Pepsi when they were drinking it from the cups but, surprisingly, they preferred Coca-Cola when it was served in the bottle or can.
The framing of the drink actually changed how it tasted to the consumer.
ceiling. If you go into your local electronics store, you’ll likely find yourself in an overwhelming jungle of wires, gadgets and batteries stacked on top of each other from floor to Conventional thought in product merchandising was that the more items you displayed, the more chance you’d have of making a sale. This is a very logical way of thinking, but Apple knows that humans are anything but logical, and that there are other dominant psychological forces that matter much more.
Every Apple Store in the world evokes the astonishing power of framing to unconsciously persuade shoppers that spending several thousands of dollars on a small electronic gadget like an iPhone – is worth it.
They’ve designed their stores to feel more like art galler- ies known for their high-value, unique pieces- than a cluttered electronic retailer. Their behavioural scientists know that the frame they create will sway the value of the gadget within it. By displaying only a small quantity of their items, they evoke the power of scarcity a form of framing which dictates that demand, and therefore the perceived value of a product, is increased when supply appears limited. We all intuitively know retail space is expensive, and so by giving each individual Apple product lots of empty space around it, they’re signalling that each item is so valuable that it warrants that expense. Psychologically we pour the value of the free space around the product into the product itself- like a piece of art. Apple frame their products on an alluring psychological stage.
To illustrate how powerful the frame around something can be on altering perception, check out this visual example:
I’m an investor in, and ambassador for, a company called WHOOP, a health-monitoring wearable that tracks your key health metrics. The company was recently valued at $3.6 billion, it dominates its category and its customers include everyone from Cristiano Ronaldo to LeBron James and Michael Phelps.
It has won in a category packed with giants and their colossal marketing budgets – Apple, Fitbit, Garmin – in part because of their genius focus on framing.
The CEO of WHOOP told me that the company has continually resisted all calls to add a time display to their wristband, despite how easy easy it would be to implement, for this very reason. WHOOP is now the only leading health wearable or wristband in its category that has no screen and doesn’t show its wearer the time.
Why? Because they believe adding a screen would change the customer’s perception of the device from being an elite health device that athletes use, to a watch. Adding something that is objectively valuable the ability to know the time would decrease the psychological value of the product. In the world of psychological moonshots, less is so often more, and one word, tweak or decision can make a huge difference to the perception of a product’s value.
In 2019, I advised a large global B2B company to ban the job title ‘salesperson, to stop using the term ‘sales’ and replace it with a ‘partnerships’ team. More people responded to their emails, and their sales rose by 31 per cent. As I suspected, a job title with the word ‘sales’ in it. primes the people you contact to believe you’re going to pester them to buy something they don’t want conversely, the framing of the word ‘partner’ suggests the person is on your team.
A few years ago, Elon Musk made a promise to animal rights associations: no more leather in Tesla cars. The entrepreneur has kept his word and, starting with the Tesla Model 3, its cars’ interiors have been made of what is curiously called ‘vegan leather’.
Rory Sutherland, the advertising legend that coined the phrase ‘psychological moonshot’, told me that Tesla instinct- ively understand the powerful impact of psychological moon- shots on the perception of value: instead of calling its new car seats ‘plastic’ – which they are they eagerly clung on to the word ‘leather’ and its luxury connotations to maintain the perceived value of their cars’ upholstery. Framing like this is one of the most common ways people achieve psychological moonshots, without improving the reality of a product or experience at all.
Framing isn’t about lying and deception; it’s about knowing how to present your product or service through the most factual and compelling lens.
For example, it’s more appealing to say a food product is 90 per cent lean than to say it contains 10 per cent fat. Both are true, but one frame is more psychologically alluring.
These examples illustrate an important but too often forgotten principle in branding, marketing and business: reality is nothing more than perception and context is king.
★THE LAW: THE FRAME MATTERS MORE THAN THE PICTURE
What you say, is not all that you say. What you say is deter- mined by the context in which your message, product or service exists. If you change the frame, you change your message. Your customers will hear everything – including the things you didn’t say. Don’t just focus on what you say, focus on how the frame around what you’re trying to say is positively or negatively distorting your message.
A smart frame will transform the plain.
The Diary Of A CEO
LAW 16
USE GOLDILOCKS TO YOUR ADVANTAGE
This law shows you the powerful yet simple sales trick that you can use to make the thing you’re selling appear to be better value, without changing the price.
‘Why does he want to show me properties that I’m not inter- ested in?’ I asked my PA, Sophie, as she read out the itinerary for my house-viewing trip with my estate agent, Clive, sched- uled for the following day. ‘I’m not sure; he insists that you see a variety of options,’ she replied.
A few days later, I submitted an offer to purchase the second of the three properties that Clive had shown me. Thank you, Clive.
But that’s not the end of the story; some months later, while researching different psychological tricks brands and marketers deploy to influence our behaviour, I stumbled across something called the Goldilocks effect.
The Goldilocks effect is a type of ‘anchoring’.
Anchoring is a cognitive bias where individuals rely too heavily on seemingly irrelevant information (the anchor) when making decisions.
In the context of the Goldilocks effect, by presenting two ‘extreme’ options next to the option you’re hoping to sell, you can make the middle option appear more attractive or reasonable.
In most contexts the ‘true’ value of something is nothing more than opinion pricing – so we search for cues within context and to help us make our decisions; when the Goldilocks effect is in play, we perceive the most expensive option as an excessive luxury. In contrast, we see the cheapest option as risky, insufficient and lower quality, and in the middle we have what we assume is the best option – we believe it must have the combined benefits of the other two: it’s a safe bet, cost-efficient and of good quality.
Reflecting on the property viewings I’d had with Clive, I realised that I had only asked him to show me the second property, but he had insisted on showing me three. The first property he showed me was far too small and arguably over- priced. The second property was spacious and only slightly more expensive than the first, while the third property was extremely expensive, in the same area, and seemed to be vastly overpriced. Like a puppet under Clive’s control, I, of course, instantly chose to make an offer on the second property.
Curious to know if Clive had intentionally manipulated me, I sent him a text asking if he was familiar with the Goldilocks effect. He replied first with a laughing face and a wink, and then went on to say, ‘Never show people only one option!’
Crafty #@$%.
Clive isn’t the only person, brand or organisation using the Goldilocks effect to influence your behaviour. Panasonic utilised it in 1992, by offering a $199.99 premium microwave as well as its existing microwaves at $179.99 and $109.99.
Sales of what then became the mid-priced option the $179.99 microwave skyrocketed, which pushed Panasonic up to a 60 per cent market share!
An experiment asked participants to choose between an all-inclusive holiday to Paris or an all-inclusive holiday to Rome. Paris won.
Experiment 1
All-inclusive Paris
All-inclusive Rome
But then a second survey was run, this time adding an option for a holiday to Rome that’s all-inclusive for everything except coffee. The totally all-inclusive deal to Rome wasn’t just more popular than the version without coffee, it was also more popular than the all-inclusive trip to Paris.
Experiment 2
All-inclusive Paris
All-inclusive Rome (without coffee)
All-inclusive Rome
With little information provided, the brain will search for context cues about the value of the three options. The pres- ence of the ‘Rome without coffee’ option provides one such
cue, and implies that the Rome trip is so valuable that they removed something from it, because it is such a good deal.
To make the Goldilocks effect work, brands usually price the medium option higher than the lowest price, but far away from the most expensive price. For example, an airline selling return flights to New York would charge £,800 for economy, £2,000 for business class and £8,000 for first class. Many customers will perceive the £2,000 ticket as the best value, even though it’s clearly not the best price.
Everything described in the psychological moonshot law serves to highlight a fundamental fallacy that drives how we tell stories and deliver experiences: we believe that we’re rational the cognitive dissonance created every time I tell you that your decisions don’t make sense is evidence of that – so when we create marketing for others we assume they are too and so we lean towards the hard work of improving real- ity, instead of the easier task of leveraging psychology.
Our decisions aren’t driven by sense, they’re driven by the nonsense created by social cues, irrational fear and survival instincts.
Great marketers, storytellers and brand-builders understand that pursuing a psychological moonshot isn’t a malevolent, unethical or disingenuous undertaking. It’s fair that these psychological perceptions work against you to create short- cuts to unfavourable perceptions so it’s also fair that you have a chance to use the same forces to turn these words, contexts, stigmas and perceptions in your favour, creating shortcuts to a perception that allows the world to see a truer representation of the true beauty, value and importance of the things you’ve created.
All is fair in psychological moonshots.
★THE LAW: USE GOLDILOCKS TO YOUR ADVANTAGE
an econ- People are inclined to make value judgements based on context, so offering a range of options – including omy, standard and premium version of your product tell a story and affect potential customers’ perception of your standard offering.
The context creates the value.
The Diary Of A CEO
LAW 17
LET THEM TRY AND THEY WILL BUY
This law reveals the easiest way to get someone to love a product instantly.
‘No, Uncle Steven! It’s mine!’ my niece exclaimed, her eyes brimming with tears, as I sheepishly asked her to return the Christmas present I had just given her.
In the frenzy of wrapping presents for my entire family, including my niece and nephew, I had made the rookie mistake of neglecting to label each gift with the recipient’s name. Consequently, I had inadvertently presented my niece with a toy figurine of Buzz Lightyear – my nephew’s all-time favourite character. I was now on the verge of watching my nephew unwrap a present containing an Elsa doll – the apple of my niece’s eye.
The room fell silent as I fumbled for words, attempting to rectify the situation. My niece clutched Buzz Lightyear to her chest, her eyes narrowing with fierce determination. ‘But but,’ I stammered, ‘you see, there’s been a tiny mix-up. Buzz is actually meant for your brother!’
The tension in the room was palpable as my niece’s eyes darted between me and her treasured toy. My nephew, sensing the drama unfolding before him, froze mid-
unwrapping, craning his neck to get a better view of the spectacle.
I conceded defeat.
‘All right, you keep it.’ I wasn’t prepared to negotiate with the steely resolve of a tearful three-year-old girl – the drama simply wasn’t worth it.
To my surprise, my nephew, who had now unwrapped his brand-new Elsa doll, seemed content too. He didn’t complain, made no attempt to swap, and he clutched the doll with the same fondness that his sister held her new Buzz Lightyear toy. They both adored what they had been given, but I knew if I had given them both a choice in the toy shop, they would have opted for the other toy.
This Christmas present wrapping blunder taught me a powerful psychological lesson about a phenomenon behav- ioural psychologists call ‘the endowment effect’. The endowment effect is a cognitive bias that causes people to overvalue an item simply because they own it, regardless of its objective value. In other words, individuals tend to be
much more attached to items they believe they own than they are to similar objects they do not possess. This is a potent psychological trick that brands deploy on all of us, all the time.
Apple is one such brand: every store provides an inter- active experience for customers, with all products displayed openly and touchable.
Moreover, they insist that every device on the floor is plugged into a power supply, loaded with apps and connected to the internet, and they tilt all the screens to the exact same angle in order to attract more potential experiences. They rigorously train staff not to press customers to buy (ensured by the fact that floor staff don’t earn sales commissions) or to ask customers to leave, thus offering an unlimited time to play with the products.
In their ‘One to One’ workshops, the aim is to empower the customer to find the solutions themselves; they do not touch the computer without the customer’s permission.
This might just sound like kindness or good manners, but I assure you it’s something much more calculated. Apple is evoking the power of two subconscious psychological spells the mere exposure effect we saw in Law 11, which increases a fondness for the product by increasing consumer exposure to the product, and the endowment effect, which increases a product’s perceived value by giving a consumer possession of the product. Put simply, the mere exposure effect makes you like it more, and the endowment effect makes you value it more highly.
Apple believes that creating an ‘ownership experi- ence’ is more powerful than driving a hard sell. The multisensory experiences built into Apple Stores deliver exactly that
So powerful, in fact, that the Illinois state attorney gener- al’s office issued a warning to holiday shoppers in 2003 to be careful of holding products as if they were their own when shopping. Although this warning sounds slightly bizarre, the basis of it is supported by 30 years of research.
In a 2009 study conducted by the University of Wisconsin, groups of students were asked to evaluate two products: a Slinky toy and a mug. In the first experiment one group was allowed to touch the items and the other group wasn’t. In the next experiment one group was allowed to imagine they owned the item, and the other group wasn’t. Extraordinarily, touching the items or even just imagining you owned it increased the participants’ value estimates.
Apple’s strategy of allowing customers to stay and play for an unlimited amount of time is also deliberate, based on further research that shows the longer a customer experi- ences the product, the greater their willingness to buy it.
A global company with 400 locations, Build-A-Bear is centred on offering a highly multisensory, engaging and inter- active experience. In the stores, children can choose, design and participate in the crea- tion of their own stuffed animals in-store.
Although Build-A-Bear is not a ‘store’; they call their locations ‘workshops’, and above every bear hangs a sign that evokes the mere exposure and endowment effects, to encourage the children to touch the bears: DRESS ME, HUG ME, HEAR ME, FLUFF ME, CHOOSE ME!
More evidence of the effects of ownership comes from a study in 1984, where researchers gifted participants either a lottery ticket or two dollars. Later, each of them was offered
an opportunity to swap the lottery ticket for the money or the money for the lottery ticket. Only a few participants were willing to make the trade.
How about in real-world conditions? Dan Ariely and Ziv Carmon from Duke University examined the endowment effect in everyday life. The most popular sport at Duke is basketball there is not enough space at the court for all the people who want to watch the games. Consequently, the university created a randomised lottery system to distribute tickets to each game.
Crucially, Carmon and Ariely conducted their experi- ment during the final round of the college basketball tour- nament March Madness, when the demand for tickets was higher than usual. The students surveyed by the economists all waited patiently on the university grounds in order to enter the lottery.
After the lottery, the ticket winners were asked how much they would sell their tickets for if someone wanted to purchase them. Those who hadn’t won a ticket were asked how much they would be willing to pay for a ticket.
On average, those who didn’t have a ticket said they would pay up to $175. Those who had won a ticket said they would not sell theirs for less than $2.400! So, those with tickets valued them nearly 14 times as much as those who didn’t have them.
★THE REASON FOR OUR POSSESSIVENESS
Possessiveness can be traced back thousands of years in human history and is still observed today in some of our primate cousins.
In 2004, two economists conducted an experiment using chimpanzees, fruit juice ice lollies and nut butter inside a tube. The food was chosen specifically because it couldn’t be eaten too quickly and would last long enough for the purpose of trading. When given a choice, 58 per cent of the chimpan- zees preferred the nut butter to the ice lollies. Unsurprisingly, of the chimpanzees who were given the nut butter, nearly 79 per cent opted not to trade it for the ice lollies. But of the chimpanzees who were given the ice lollies, 58 per cent refused to trade for the nut butter.
The economists concluded that the endowment effect probably became rooted within humans early on in our evolution. But why were early humans so protective of what they had and reluctant to trade or pay for what they did not yet have? The answer seems that the risk associated with trading – particularly if the other party didn’t act fairly was a serious deterrent. Our ancestors had no reliable way of
enforcing the conditions of a deal, so they reduced the price they were willing to pay for things (the value of the trade to compensate for the risk of ending up with nothing or less than they should have got.
★THE LAW: LET THEM TRY AND THEY WILL BUY
Getting your product into customers’ hands remains an incredibly powerful tool for salespeople, marketers and brands. Next time you’re trying to make someone love some- thing and pay a good price for it, don’t just tell them how great it is, use the power of the endowment effect and take a page out of Apple’s book: let them touch it, play with it, test drive it and try it out. If you do, like my niece, they just might not want to give it back.
Through the lens of ownership, the ordinary becomes the extraordinary.
The Diary Of A CEO
LAW 18
FIGHT FOR THE FIRST FIVE SECONDS
This law proves why in marketing, business and sales, your success often depends on just five seconds. If you get those five seconds right, you’ll succeed. If you don’t, you’ll fail.
Awkward ten second pause, staring ominously at the audience.
“This is exactly why you were expelled from school; you are INCAPABLE of sticking at anything you don’t believe in. And you always think you know a better way. DO NOT CALL ME or any of the family, until you go back to univer- sity!” And with that, my mum hung up the phone.’
These four sentences are the first words I uttered on more than 300 stages, in every corner of the world, between 2015 and 2020. They are the very emotional words my mother said to me on the day I called her to tell her I was dropping out of university to start a company.
I didn’t introduce myself. I didn’t say my name or the company I was presenting on behalf of. I knew, that in the first five seconds, the audience’s habituation filters were going to either tune in and give me their attention, or decide I was wallpaper, tune out and take their attention somewhere else.
For this very reason, the first five seconds, in any story, is do or die.
As I said earlier, my marketing companies have never had an outbound sales team, yet we’ve attracted the world’s biggest brands as clients – Amazon, Apple, Samsung, Coca- Cola and generated nine-figure revenues.
If I could put our success down to just one thing although the blue slide mentioned in Law 10 would be close undoubtedly it would be that we told the most captivat- ing, surprising and emotional stories. I never, ever ‘pitched’. I never bombarded an audience with graphs, stats or data. Every talk I delivered started, sounded and ended more like something out of Harry Potter than a sales presentation.
I, like most people, have a horrifically short attention span when I’m bored of something – so much so that I was expelled from school for sleeping in lessons, skipping classes and had a 31 per cent attendance record. I then went off to university, fell asleep in the first lecture, dropped out the next day and never went back. I think because of this, I’ve naturally always understood how important it is to tell stories that demand attention someone talking at me in a monotone voice for a prolonged period of time triggers my brain’s snooze button.
But for some reason, most stories delivered on stage are still horrifically boring. After spending years shedding blood, sweat and tears while creating something, the creator of that thing nearly always falls into a delusional, self-centred bubble. They begin to believe that the thing they’ve created is so revolutionary, fascinating and important, that it’s inher- ently worthy of the world’s undivided attention.
From this distorted, self-absorbed perspective, one of the most common and treacherous traps the creator of that thing can fall into when telling their story to the world is
believing that their audience cares about them, their prod- uct, their hard work and their ‘innovation’ as much as they do. When this happens, the story they tell becomes logical, long, and lacklustre.
Conversely, when a storyteller understands that nobody absolutely nobody – cares about them as much as they care about themselves (nobody cares that their toothpaste is a little mintier, their marketing agency is a little bolder or their clothing brand is a little more fitted) they tell captivating, emotional, punchy stories that leave you no choice but to commit your undivided attention to every word they say.
MrBeast, if you’re unfamiliar, is arguably the most famous YouTuber in the world: at the time of writing, he has over 150 million subscribers, he has 30 billion video views, and he’s reportedly generating hundreds of millions of dollars from his videos every year. He’s recently announced that he will become the first billionaire YouTuber- and I tend to believe him.
How has he done it? In his own words, the first few seconds of every video is the most important in the open- ing five seconds of every video he’s made, he delivers what he calls ‘a hook’ a clear, compelling promise, explaining why you should watch the video, that bypasses your brain’s habit- uation filter, makes you think WTF? and in doing so prevents the viewer from tuning out and clicking away.
He says you shouldn’t start with anything else; you shouldn’t introduce yourself, ‘overexplain anything’ or even have the typical B-roll footage overlaid with music that most video creators opt for. He essentially screams a compelling promise in his audience’s face, which holds their attention long enough for him to deliver upon that promise. Here are some examples of the first five seconds of his videos:
Video 1, first five seconds:
I RECREATED EVERY SINGLE SET FROM SQUID GAME IN REAL LIFE, AND WHICHEVER ONE OF THESE 456 PEOPLE SURVIVES THE LONGEST, WINS 456 GRAND! (350 million views)
Video 2, first five seconds:
I PUT 100 PEOPLE INSIDE OF A GIANT CIRCLE, AND WHOEVER LEAVES THE CIRCLE LAST WINS $500,000! (250 million views)
Video 3, first five seconds:
I SPENT $2.5 MILLION DOLLARS ON THIS PRIVATE JET AND HAD 11 PEOPLE PUT THEIR HAND ON IT. WHOEVER TAKES THEIR HAND OFF THE JET LAST, WINS THE PRIVATE JET! (100 million views)
Over the last ten years, I’ve become known for repeating one hypothetical scenario, over and over again. Whenever I’m faced with a marketing team that has regrettably fallen into that delusional self-centred bubble – when they’ve fallen into the trap of overestimating how much the world cares about them – I tell them this:
Imagine, the customer you’re trying to reach is called Jenny. Imagine right now, she’s just left home for work, after a long sleepless night and an argument with her husband.
FUCK, she’s got a flat tyre and has just broken down on the motorway in the pouring rain; she’s now late for work, she’s angry, she’s tired, and she’s time-poor. She pulls out her phone on the side of the road to call the breakdown service and the first thing she sees is your marketing message, your
advert, your content. What would you have to say to her, in that moment, to get her to pay attention to you? To get her to click, to get her to buy. Whatever that message is, it’s exactly what you need to say to all your customers, because if you can get Jenny, on the side of the road, in that situation, you’ll get everyone else.
When you’re thinking about storytelling, cater to your most uninterested customer first. For this very reason, you may have noticed that every law in this book starts with a compelling five-second statement about why you should read it. I know most of you will skip sections of this book, but by making you a compelling promise in the first five seconds of each law, I imagine chapter retention increases by at least 25 per cent and in business, 25 per cent, especially in areas with compounding returns, will completely change your trajectory. If I did 300 talks on stage, a 25 per cent increase in enquiries means potentially hundreds of millions of dollars over the course of ten years – simply by focusing on the first five seconds.
★STOP INSULTING GOLDFISH
‘You have the attention span of a goldfish.’
This phrase has always been used to mock people with short attention spans, but if recent research is correct, it might actually be a compliment.
In a study led by Microsoft in 2015, Canadian researchers monitored the electrical brain activity of 2,000 participants. The research showed that, in the last 15 years, the average human attention span had dropped from 12 seconds to 8.
To place this in perspective, it was reported in the same article that goldfish have an attention span of 9 seconds
one whole second longer than humans! So if someone ever compares your attention span to that of a goldfish, priate response is now, in fact, ‘thank you’ an appro-
We are increasingly distracted. On average, an office worker will pick up their phones more than 1,500 times per week, amounting to 3 hours and 16 minutes a day, and will check their email inbox 30 times every hour.
The average web page visit lasts for just 10 seconds or so, and Ofcom, the UK’s communications regulator, reported in August 2018 that people check their smartphones almost every 10 minutes while they’re awake.
I interviewed Johann Hari, bestselling author of Stolen Focus, a book about dwindling human attention spans, and he said to me:
I ended up travelling all over the world. I interviewed 250 of the leading experts in the world about attention and focus, from Moscow to Miami; from a favela, a slum in Rio de Janeiro, where attention had collapsed in a particularly disastrous way; to an office in New Zealand. We are facing a real crisis. Our attention span really is shrinking. There are changes in the way we live that are pouring acid on everyone’s ability to pay attention. We have an attentional pathogenic culture, a culture in which it is very hard for all of us to form and sustain deep focus. This is why activities that require deep forms of focus, like reading a book, have just fallen off a cliff in the last 20 years.
Over the last ten years I’ve produced thousands of videos, and the retention graphs on those videos tell a predictable and often disheartening story: I lose 40-60 per cent of my viewers within the opening seconds in pretty much every video I make that is longer than five minutes, on every social platform.
The first 5 seconds
Retention
Time
This serves to prove that those first five seconds dispropor- tionally dictate the fate of every second that follows. This is true for social media content, speeches, videos and any other medium that’s fighting for your attention.
Five years ago, my marketing company was tasked with promoting a campaign. It was a hilarious two-and-a-half- minute video that had cost hundreds of thousands of dollars to produce and it was our job to make sure it got seen.
When the company sent us the asset to distribute, we initially suggested that they re-edit the video to make the opening five seconds more compelling. In the asset they had sent us, the first five seconds featured an establishing shot of the location overlaid with the brand’s logo.
We were instructed that the video needed to be shared as it was, and so we followed their instructions and shared
it across a variety of highly engaged social media channels. The results were underwhelming to say the least.
When the client asked me why it had underperformed, we told them that the opening five seconds were killing the entire video. We offered to re-edit the first five seconds and assured them that those five seconds were changing the fate of the proceeding two and a half minutes.
Thankfully they obliged. The re-edited video went viral, racking up more than 3 million views across our social media channels within seven days. A tiny change to the first five seconds had meant that 150 per cent more people continued watching past the ten second mark and stayed watching long enough to enjoy the video, engage with the video (which makes the algorithms share it) and directly share it on their own feeds.
THE LAW: FIGHT FOR THE FIRST FIVE SECONDS
I could give you a hundred more client case studies that prove those first five seconds are do or die for any great story. If you want your story to be heard, you must aggressively, passionately and provocatively design those first five seconds to be thumb-stoppingly compelling, annoyingly magnetic or emotionally engaging. Drop the warm introduction, the pleasantries and the musical B-roll footage, and urgently get to the most compelling promise, point or provocation that you can. No matter the medium, you must earn the right to the attention you’re seeking within those first five seconds.
Attention might just be the most generous gift that anyone can give.
The Diary Of A CEO
3
PILLAR III
THE PHILOSOPHY
LAW 19
YOU MUST SWEAT THE SMALL STUFF
This law reveals what every great entrepreneur, athlete and coach seems to instinctively know: your success will be defined by your atti- tude towards the small stuff the things most people overlook, ignore or don’t care about. The easiest way to do big things is by focusing on the small things.
In 2023, my podcast, The Diary Of A CEO, became the most downloaded podcast in the UK, according to Apple’s end-of-year ranking. It reached the number one spot in the USA Spotify business podcast charts, and for the first time ever, in January gained more subscribers 320,000 on YouTube than the legendary podcaster Joe Rogan did in the same month.
Our podcast is relatively new compared to many of our peers. We only started producing the podcast weekly and in video form just over two years ago. I actually don’t believe the podcast has been successful because of me as a host; I don’t believe that my questions are significantly better, or that our editing is the best, or even that we have the most famous guests in the world. I’m not saying we’re bad at these things, but there are others doing those things better.
The secret, in my opinion, is that we sweat the small stuff more than any other team I have ever encountered. We obsess over thousands of small details that I believe most people would dismiss as trivial, crazy or a waste of time.
To offer just a few examples: before a guest arrives, we research their favourite music and play it softly in the back- ground when they arrive no guest has ever mentioned this, but we believe that it will put them in a better, more open mood. We’ve researched the optimal room temperature for a conversation – not too hot, not too cold. We A/B test the title, thumbnail and promotion of each podcast episode using AI and social media ads weeks before the podcast is published to the public. We’ve even hired a full-time in-house data scien- tist and had him create an AI tool that translates the podcast into multiple languages, so if you click on the YouTube version of the podcast while you’re in France, for exam- ple, both mine and the guest’s voices will be automatically translated into French. We’ve built a data-driven model that informs us which guests we should book, the best-performing topics the guest has previously discussed, the optimal length for a conversation, and even how many characters long the title of a podcast should be.
Our success can’t be attributed to being the best at any one thing, but it can be attributed to our relentless focus on the smallest stuff. Searching for minor, seemingly trivial ways to improve has become our religion. This same meticu- lous philosophy is embodied by all my companies and is a shared characteristic among the world’s most innovative, fast-growing and disruptive brands.
THE DIARY OF A CEO
For 77 years, through ups and downs, General Motors (GM had led the way, with higher car sales annually than any other company globally. But in recent years they’ve been dethroned by Toyota and its unique approach to building cars, a company and a culture.
Toyota was announced as the world’s leading automaker in terms of sales for another consecutive year in 2022. Their year-on-year growth of 9.2 per cent increased the gap with their closest competitor, Volkswagen, by almost 2 million cars sold, compared to the 250k gap the year before.
Central to the company’s success is something called the ‘Toyota Production System’. It was developed during the post-Second World War era in Japan, when the country was undergoing reconstruction and facing a shortage of capi- tal and equipment. In response to these challenges, Toyota engineer Taiichi Ohno formulated a philosophy that allowed the company to extract the maximum potential from each component, machine and employee.
The secret to Toyota’s philosophy is a principle known by its Japanese name, ‘kaizen’, which means ‘continuous improvement’. In the kaizen philosophy, innovation is seen as an incremental process; it’s not about making big leaps forward, but rather making small things better, in small ways, everywhere you can, on a daily basis.
The kaizen philosophy vehemently rejects the notion that only a select few members of a company’s hierarchy are responsible for innovation; it insists that it has to be an everyday task and concem of all employees, at all levels.
Because of the kaizen philosophy, Toyota reportedly implements a staggering one million new ideas each year the majority of which are suggestions made by ordinary factory-floor workers.
Remarkably, Toyota’s US facilities are said to receive a hundred times fewer suggestions from their workers than their Japanese counterparts.
These suggestions are often tiny, including things like increasing the size of water bottles to better hydrate employ- ees, lowering a shelf to make tools slightly easier to reach or making the font on a safety warning just one point size bigger to reduce accidents.
These suggestions may sound insignificant in nature, but the kaizen philosophy believes that it is in fact the smallest of improvements that will cumulatively push the business forward and keep it ahead of competitors that don’t care about sweating the small stuff.
Kaizen philosophy says you must create a standard, make sure everyone meets the standard, ask everyone to find ways improve the standard, and repeat this process for ever.
KAIZEN VS. CONVENTION
Because Toyota is one of Japan’s most successful compa- nies, many have assumed its success is down to Japanese’ culture, pay dynamics or employee attitudes. But history tells another story.
In the early 1980s, during Ronald Reagan’s presidency, tensions had been mounting between the United States and Japan over the large number of imported cars flooding American roads. American industry had been struggling. The General Motors plant in Fremont, California, was a prime example of this deterioration. With regards to quality and productivity, it was GM’s worst plant by far: it took much longer on average to assemble a vehicle compared to any other plant and defects in finished cars ran into double digits.
The lack of Fremont-built cars in the employee car park clearly showed the absence of employee pride and confidence.
The plant had a backlog of some 5,000 union grievances and there had been a number of strikes and ‘sickouts’ by the United Auto Workers; labour conditions were toxic and unsustainable.
Huge amounts of temporary workers were needed on any given shift to cover absenteeism rates which exceeded 20 per cent. While special cleaning crews were hired to clear the liquor bottles and drug paraphernalia from the employee car park after each shift.
GM viewed the plant as irreversibly broken, and in February, they closed the factory and laid off the entire workforce.
Toyota spotted an opportunity to resolve the wider trade frictions and test its kaizen philosophy on its competitor’s home turf. In 1983, Toyota approached GM with the idea
of a joint partnership. The Fremont factory would reopen and be renamed New United Motor Manufacturing Inc. (NUMMI), making the Toyota Corolla and Chevrolet Prizm as its primary products.
Toyota offered to invest cash, oversee the smooth running of the plant and implement their philosophy. They even agreed to rehire the same workers, use the same workers’ union, the same facilities and the same equipment, despite the terrible failure of the plant just a year earlier.
Toyota’s former chairman, Eiji Toyoda, believed that this was the necessary first step towards having a wholly owned Toyota manufacturing factory in North America. But he also saw it as the perfect way to test the viability and transporta- bility of the Toyota Production System.
Toyota hired back almost 90 per cent of the Fremont hourly union workforce and implemented a ‘no lay-off policy’, prevent- ing anyone from being fired. They sent 450 group and team leaders to Toyota City to be trained in their unique kaizen-in- spired ‘Toyota Production System’, at a cost of over $3 million. Under the Toyota philosophy, workers would have a strong voice in plant operations. The workers’ old, 100-line job descriptions were replaced by two words: ‘team member’. Management hierarchy was simplified, reduced from fourteen levels to just three: plant management, group leader, team leader.
As if by magic, employees who had previously been so disillusioned that they turned against their employers began participating in work-related decisions. They received training in problem solving and kaizen practices, so that they became true experts in their respective areas. The parameters of their jobs radically changed as well: rather than being expected to simply do their bit, they were tasked with proactive thinking and improving.
Team members were empowered to quickly implement ideas for improvement, and anything that worked was repli- cated as best practice. All team members could also stop the entire line at any time to fix a problem by pulling a cord that was accessible from any location in the factory.
Within a year of launching in 1985, the NUMMI factory had the highest quality and productivity of any GM plant in the world.
Rather than an average of twelve defects per vehicle it was now just one, even though cars were assembled in half the time it had previously taken the disgruntled workers. Just 3 per cent of workers was absent at any time, a reflection of the fact that worker satisfaction and engagement had soared. Operational innovation also took off: employee participa- tion in new ideas exceeded 90 per cent and management recorded the implementation of nearly 10,000 new ideas.
By 1988, NUMMI was winning awards, and by 1990, the Toyota Production System and its kaizen philosophy became the global industry standard for manufacturing. All in under two years. The building, workforce and equipment was unchanged. The philosophy was new and the outcome was radically different.
★1 PER CENT CAN CHANGE YOUR FUTURE
The great illusion in life and business that makes the kaizen philosophy of incremental improvements so poorly adopted. disregarded and overlooked, is that small things are just small things.
This is objectively true, but a large number of small things is a large thing, and it’s easier, more inclusive of all team members, and therefore more achievable to aim at
improving a large number of small things than it is to galvan- ise people to find and implement big things.
It’s an unfortunate reality of life that things that are easy to do are also very easy not to do. It’s easy to save $1, so it’s also easy not to save it. It’s easy to brush your teeth, so it’s also easy not to brush your teeth. When things do, and not to do, the outcome of doing are easy to or not doing them is invisible in the short-term, so we often choose not to do them. But maths and economics clearly illustrate how our smallest decisions have the biggest impact on our future position.
Over time, the difference between allowing something to worsen by 1 per cent each day vs. improve by 1 per cent each day becomes extremely significant. Consider this:
If you start the year with £100 and manage to improve that value by 1 per cent each day for 365 days, you will have multiplied that value by 37. Over ten years, assuming the same 1 per cent per day incremental improvement, that value balloons to £15 quadrillion!
Conversely, letting that £100 degrade by 1 per cent each day quickly reduces your money to £2.55 after one year, 6p after 2 years and Op thereafter.
Not brushing your teeth today will have no visible impact.
Not brushing your teeth every day this week might cause a slight smell but there will be no significant consequences.
Not brushing your teeth every day for five years will have you screaming in a chair as a dentist rips the molars from your mouth. When did this dental problem occur? It began today, by overlooking something that was easy to do and easy not to do.
For Toyota, the kaizen culture didn’t happen overnight.
It took 20 years for two suggestions per person per year to become standard across the business.
Kaizen philosophy takes time, investment and tremendous belief.
★THE ART OF INCREASING SUGGESTIONS
You’ve seen it everywhere: the company suggestion box – a small opening on top for employee suggestions, a padlock, a general look of neglect. Though it comes from a good place and is well intended, its failure to yield any meaningful results is usually down to two factors. One: a large number of ‘suggestions’ are usually not ‘creative ideas’ by Toyota’s standards but anonymous complaints, unconstructive criti- cisms or passive-aggressive attacks on how the company operates. Two: the few proactive suggestions are either never actioned or cannot possibly be actioned because they are impractical. It is the deadly mix of complaining by the workforce and lack of follow-through by management that leads sadly to the destruction of trust and the dusty death of the suggestion box.
So what’s different about Japanese companies’ teian, or suggestion systems? Why do they work where other systems fail? Are their employees smarter or more sensible? Are the managers more open to finding useful suggestions among the unhelpful ones? Is it to do with Japanese culture? The answer is much simpler, and unconnected to any national culture.
The answer lies with the person we will call the ‘idea coach’ and any company can take advantage of this. When Toyota’s manager of domestic public relations in Japan, Ron Haigh, was asked how they can accept 99 per cent of the ideas that arrive in their suggestion system, he had a telling answer.
Ron explained that supervisors reviewed their employees’ ideas with them one on one, coaching them on the practical- ities, giving them direction and support to make the idea well-rounded and effective, and helped it to succeed. This
sits in stark contrast to most Western suggestion-box systems where the manager says ‘yes’ or perhaps more often – ‘no’, then explains why an idea will ‘never work’.
Under the kaizen system, your supervisor is your idea coach. It remains the employee’s idea, but through working with someone who is more experienced with a deeper under- standing of the art of the possible, 99 per cent of ideas are accepted and collaboratively developed into something that could work.
All employees at Toyota are tasked with coming up with at least one idea per month – making it a central part of everyone’s role. Supervisors are also tasked with making sure each of their team members succeeds in coming up with at least one idea per month. This ensures that everyone is rowing in the same direction – it’s in everyone’s best interests to help ideas succeed.
Coaches also have coaches each supervisor has a coach above them, who is incentivised to help the super- visor develop enough new ideas each month. In this way, everyone from the top to the bottom of the company is positively encouraged to listen, to refine and to support all new suggestions.
Critically, the person who implements the idea has to be the one who had it in the first place. You can imagine how this principle alone alters the types of suggestions people make. A criticism is no longer an idea; ‘I hate the office music can’t be a suggestion, as under this principle every idea must be practical, productive and focused on a solution.
Finally, Toyota employees are all provided with an education in kaizen, the Toyota Production System, and how the idea-suggestion process works. It’s exceptionally rare for Western counterparts to educate their teams on the
philosophy of incremental gains, how to properly formulate suggestions and the rationale behind their philosophy.
★AVOID PAYING FOR SUGGESTIONS
Companies tend to treat employees like rats in a maze sprint- ing after cheese by paying them for the behaviour they want to reinforce. This is the easy, less-effective, short-term, costly approach. The harder, more effective, cheaper approach is to create a culture where people care enough, are motiv- ated enough and are recognised sufficiently enough to step forward, contribute and invest their energy in the better- ment of the company.
Under the kaizen philosophy, you need lots of ideas, very often, to make meaningful progress over time. And in order to get lots of ideas, you need people to be driven by their own curiosity, motivation and care. There’s a famous fable that illustrates this idea well:
There was once an old woman, who lived alone. Every afternoon, her peace and quiet was disrupted by chil- dren playing noisily on the street outside her house. As time went on, the children got noisier and noisier, and the woman became more and more infuriated. One day she had an idea: she called them over and explained to them amiably that hearing them playing joyfully outside was the highlight of her day, but that there was a problem: in her old age and isolation, she was going deaf. So, she asked, would they be willing to make even more of a racket, just for her? She went one step further, offering them each a quarter for their trouble.
The next day, the kids eagerly returned and made a huge din outside her house, as requested; they were
each paid their 25 cents and asked to return the next day. But this time, the woman only paid them 20 cents, And the following day it was just 15 cents! The poor old woman explained that she was running out of money, and that their fee would drop to a nickel a day from now on. The kids were appalled at the prospect of earning a fifth of what they were earning just days before. They stormed off and pledged never to return. It was simply not worth the effort, they said, for just five cents a day.
The woman’s clever idea was to take the joy out of the thing the children loved doing and were doing for free. The bigger lesson is clear, though: it’s possible to replace a genuine motiv- ation with a synthetic one. This phenomenon is also known as ‘motivation crowding’: if you attach a financial reward to ideas, it can interfere with or even eliminate people’s genuine creative energy and ambition.
This is more than a fable; this is science. I interviewed motivation expert and author Daniel Pink about the impact financial rewards have on our motivation and he shared a plethora of research that shows that paying someone to do something that they once did for fun will cause them to lose the intrinsic joy of doing that task. When a hobby becomes a job, motivation drops.
Scholars at the London School of Economics and Political Science looked at 51 studies on pay-for-performance schemes and stated: ‘We find that financial incentives may indeed reduce intrinsic motivation and diminish ethical or other reasons for complying with workplace social norms such as fairness. As a consequence, the provision of financial incen- tives can result in a negative impact on overall performance.
★ INNOVATION DISTORTION
Innovation is often portrayed as a miraculous occurrence, something that only arises from the genius of a select few or the luck of a fortunate accident. The light bulb, Velcro, peni- cillin and Post-it notes are just a few examples that perpetuate this misleading belief.
The painful, incremental process behind the break- through is nearly always neglected in the retelling of these stories of invention, which only highlight the final outcome.
Don’t let these myths deceive you – true innovation is nearly always born from the sweat and determination of persistent individuals and great teams bound together by the right culture and philosophy, not from eureka moments, accidental fortune or intentional genius.
In all the companies I’ve founded that have reached the summit of their industry, there was no one decision, inven- tion or innovation that got us there. My central focus has always been to get our teams to ‘out-care the competition’. Creating a culture through recognition, celebration and evidence, which continually proved to all of us that the small- est of things – the easiest and most accessible things – can have the biggest of impacts.
‘One per cent’ is the most repeated phrase in my compa- nies, and one of my key responsibilities as CEO is identifying and encouraging those 1 per cent gains, wherever they might arise within the company.
★THE LAW: YOU MUST SWEAT THE SMALL STUFF
I’ve always felt that I have a cheat code. While our competi- tors think consistency or big wins are the paths to the podium, I know – without a shadow of a doubt – the correct route is to be found by making consistently small improvements, sweat- ing the smallest stuff and fighting for tiny gains.
If you don’t care about tiny details you’ll produce bad work because good work is the culmination of hundreds of tiny details.
The world’s most Successful people all sweat the small stuff.
The Diary Of A CEO
LAW 20
A SMALL MISS NOW CREATES A BIG MISS LATER
This law reveals why most people end up lost in their relationships and work because they’ve overlooked one simple, ongoing discipline in their lives.
Asked to explain how Tiger Woods became one of the great- est golfers of all time, most of us would reel off the same well-known facts: he was a child prodigy, his talent already apparent when he was just two years old; he devoted his life to training, famously spending hours analysing footage of his performance; his own father described him as ‘The Chosen One’ and had unshakeable belief in his potential.
But those who really know Woods will tell you it’s his kaizen philosophy of obsessive, continuous tiny improve- ments that deserves the credit for his accomplishments.
In 1997, after the Masters tournament and just seven months after turning professional, Woods told his coach, Butch Harmon, that he wanted to rework – effectively rebuild his entire swing from scratch. Harmon warned Woods that there were no shortcuts, that it would be a long journey, and that his performance at tournaments would get much worse before he saw any improvement.
Friends, fellow players and experts agreed, but Woods knew his swing could be marginally better, so he ignored them. He viewed reinventing his swing not as a threat to his game, but an opportunity to incrementally improve it, and so he took the chance and started his kaizen journey.
Woods was directly inspired by Toyota’s quest for perfec- tion, and began to speak of the kaizen philosophy as if it were his religion. He and his coach went on to create their own kaizenesque sequence of: hitting practice balls repeatedly; reviewing footage of his swing to discover improvements; implementing any improvements in the gym and on the course. And repeat.
Just as his coach predicted, it was a long road. Woods stopped winning in fact he didn’t win anything for 18 months and pundits began to say it was all over for him. But Woods and his coaches had faith that small improvements would show up after longer periods of time. He told his critics, ‘Winning is not always the barometer of getting better.’
Woods’s kaizen attitude paid off. His new swing would develop into a lethal weapon: more precise, more accurate and more versatile than ever before. He enjoyed a record six straight wins starting in late 1999 and since then, Tiger Woods has arguably become the best golfer of all time, with 82 PGA tour wins than anyone has ever achieved before. more
Woods proves that the pursuit of perfection is a matter of discipline, not heroism.
Charles Darwin’s theory of evolution and ‘survival of the fittest’ posits that not making small adaptations can result in extinction, while small mutations create a survival advantage. This idea serves as a fitting analogy for the kaizen philosophy.
As Charles Darwin argued, an individual’s success won’t be determined by a single stroke of genius. Instead, it will be the by-product of a philosophy that fosters gradual evolu- tion, mutation and adaptation in any and every aspect of an organism, over an extended period of time.
In aviation there’s a principle called the ‘1 in 60 rule’, which means that being off target by 1 degree will lead to a plane missing its end destination by 1 mile for every 60 miles flown. This concept also applies to our lives, careers, relation- ships and personal growth. Just a small deviation from the optimal route is amplified over time and distance – something that feels like a small miss now can create a big miss later.
This highlights the need for the real-time course correc- tions and adjustments that the kaizen philosophy provides. If we are to be successful, we all need simple rituals to assess our course and make the necessary small adjustments, as frequently as possible, in all aspects of our lives.
John Gottman, the acclaimed relationship psycholo- gist, concluded from decades of research that the existence of ‘contempt’ in a relationship is the biggest predictor of divorce. Contempt is the subtle disrespect and disregard of your partner like an aircraft being one degree off course, the harm happens slowly, over time, in relationships where
the couple fail at conflict resolution because of poor or infre- quent communication.
This insight led me to establish one of the most impor- tant kaizen-style rituals I have in my romantic relationship: a scheduled weekly check-in with my partner. We sit down, talk openly and seek marginal ways to improve, align and resolve unaddressed issues – both small and large.
In one of our recent check-ins, she mentioned that my response of ‘Sorry, I’m busy with something’ when inter- rupted while working can come across as blunt and irritated. She asked if I could add a loving word to my response to soften the message my unintentional bluntness had been making her feel subtly rejected.
Now, instead of sounding like a grumpy workaholic, I say, ‘Sorry, love, I’m busy with something.’ Although it seems like a minor change, expressing and rectifying this issue has prevented it from compounding over time and caus- ing a big problem later. Like a plane slightly off course, we’ve nudged our relationship back on track by one-degree so that we can continue in the right direction.
I apply the same principles to business, friendships and my relationship with myself. I have weekly check-ins with my directors and friends, and even a self-assessment in my diary to ensure everything is on course, aligned, and that any necessary course corrections are identified and implemented.
Week after week, my inbox is flooded with messages from individuals who have found themselves lost in their careers, businesses, relationships and friendships. In nearly every instance, it eventually becomes evident that their present circumstances are a consequence of neglecting small things for an extended period of time. They failed to check in with themselves and others, speak up, engage
in difficult conversations or address the seemingly trivial issues in their lives. Consequently, they veered off course ever so slightly by a mere one degree which ultimately led them to a destination they didn’t want to go to.
★THE LAW: A SMALL MISS NOW CREATES A BIG MISS LATER
The kaizen philosophy isn’t just about business, efficiencies or improvements; it’s about continually ensuring you’re on the right path and heading to the destination that you intend to, want to and desire to visit.
The smallest seeds of today’s negligence will bloom into tomorrow’s biggest regrets.
The Diary Of A CEO
LAW 21
YOU MUST OUT-FAIL THE COMPETITION
This law proves that the higher your failure rate, the higher your chances of success. It will inspire you to start failing much faster than you currently are!
Thomas J. Watson was president of IBM for an incredible 38 years, was one of the most notable entrepreneurs in the USA in the first half of the twentieth century alongside Henry Ford and he became one of the richest men of his time because of his enormous success at IBM. His core principle of innovation could be summed up in a simple sentence: If you want to increase your success rate, double your failure rate.’ He also said, ‘Every time we’ve moved ahead in IBM, it was because someone was willing to take a chance, put their head on the block, and try something new.’
When he was asked if he was going to fire a male employee who made a mistake that had cost the company $600,000. he swiftly replied, ‘No, I just spent $600,000 training him. Why would I want somebody to hire his experience?”
He instinctively understood that failure was both an opportunity for progress, and that the opposite failure would be the death of IBM. He warned against
complacency, even when IBM reached the top of their indus- try, and in line with the kaizen approach, he said, ‘Whenever an individual or a business decides that success has been attained, progress stops.’
Even before I had heard about Thomas J. Watson and his unconventional perspective on failure, I spent ten years encouraging, measuring and driving up my team’s failure rate. We all know failure is feedback, and we can agree that feedback is knowledge, and as the cliché asserts, knowledge is power. Therefore, failure is power, and if you want to increase your chances of success, you must increase your failure rate. Those who fail to constantly fail are destined to be the eternal followers. Those that out-fail their competition will be followed for ever.
★HOW TO INCREASE YOUR FAILURE RATE
Booking.com is the largest and most successful hotel booking site in the world. But, like every industry leader, it started small, broken and behind.
Gillian Tans, Booking.com’s former CEO, said: ‘Many companies start with a nice product and market it all over the world. Booking did the opposite. We had a basic product and then worked hard to figure out what customers wanted. We failed so many times.
A few years after launching, a Booking.com engineer attended a conference in 2004, where he heard Microsoft’s Ronny Kohavi speak on the importance of experimenta- tion and failure. He took the learnings back to his team at Booking.com, where there were constant, time-wasting disa- greements about the next step forward, the right features to implement and the direction to take.
They began to learn what customers wanted through simple experiments, and then used those insights to build a product the Booking.com we know today. As Tans says, ‘We grew like this, without any marketing or PR, just constant testing and experimentation of what our customers liked.
Having seen the success that increasing experimentation and failure had had on the firm, Booking.com developed and launched its own ‘experimentation platform’ in 2005 that allowed it to tremendously scale up the amount of tests it was running.
Adrienne Enggist, senior director of product develop- ment at Booking.com, recalled:
I came from small businesses where CEOs launched a big product redesign every six months, and by the time you rolled it out, it was hard to figure out what worked and what did not work. Here, the team was small, fitted on one floor, and it was exciting to see everyone take risks, fail, push small changes very quickly, and use experiments to measure the impact.
Booking.com would go as far as appointing a ‘director of experimentation’, who has publicly evangelised about how critical it is for companies to fail more, fail more often and measure those experiments, saying: ‘We believe that controlled experimentation is the most successful approach to building products that customers want.’
Today Booking.com has 20,300 employees and $10 billion in annual revenue. The website is available in 43 languages and features over 28 million listings in every corner of the world. And in the moment that you’re reading this, 1,000 experiments are being run by Booking.com – led and devised
by every single product and technology team they have. They credit their culture of out-failing their competition as being a key reason why they’ve overtaken their competition.
Amazon follows the same fail-faster religion. Jeff Bezos, founder of the trillion-dollar e-commerce platform, sent the following memo to his shareholders when the company became the fastest ever to reach annual sales of $100 billion:
One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organisations embrace the idea of invention, but are not willing to suffer the string of failed experiments neces- sary to get there.
Outsized returns often come from betting against conventional wisdom, and conventional wisdom is usually right. Given a 10 per cent chance of a 100 times payoff, you should take that bet every time. But you’re still going to be wrong nine times out of ten. We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs.
The difference between baseball and business, however, is that baseball has a truncated outcome distribution.
When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many experiments.
In a related interview, Jeff Bezos expanded upon this idea:
To be innovative, you have to experiment. You need to do more experiments per week, per month, per year, per decade. It’s that simple. You cannot invent without experimenting. We want failures where we’re trying to do something new, untested, never proven. That’s a real experiment. And they come in all scale sizes.
Amazon has one of the biggest business graveyards of failure something I’m sure Bezos is proud of – A9.com (the Amazon search engine), the Fire Phone and their Endless.com shoe website are just some of the notable pro- jects that were so unsuccessful you’ve probably never heard about them.
However, when one of their experiments pays off, it completely changes the trajectory of their business, and covers the losses of all of their failures combined: Amazon Prime, Amazon Echo, the Kindle and, most notably, Amazon Web Services (AWS).
AWS was launched as an experiment unrelated to Amazon’s e-commerce business, but in 20 years has become the fastest-growing B2B company of all time. It is the world’s top cloud computing platform. It has operations in 24 geographical regions and boasts over 1 million active users in 190 countries, $62 billion in revenue and $18.5 billion in annual profit. In 2022, that little experiment from 20 years ago was the single biggest contributor to Amazon’s total profit. In 2011, Amazon created its very own experimenta- tion platform, Weblab, which now runs more than 20,000 experiments each year to continuously innovate and improve on customer experiences.
Jeff Bezos explained how Amazon decides which experiments a company should pursue in his 2015 share- holder letter:
Some decisions are consequential and irreversible or nearly irreversible one-way doors – and these deci- sions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions.
But most decisions aren’t like that; they are changeable, reversible – they’re two-way doors.
If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high-judgement individuals or small groups.
As organizations get larger, there seems to be a tendency to use the heavyweight Type 1 decision- making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment suffi- ciently, and consequently diminished invention.
KA BATTLE BETWEEN FATHER AND SON
For six years I advised an industry-leading, multi-billion- dollar e-commerce company in the food industry that had two brands underneath it. One brand was run by the father, who had founded the whole group, and the other, much newer brand had been launched by the son. When my company
was appointed to help them scale their marketing, customer acquisition, social media and innovation efforts, I initially spent up to four days a week in the boardroom with both the father and the son, understanding their brands, their goals and their objectives.
I visited both brands every week without fail; I travelled the world with them; I was in the room, doing everything from advising their crisis-management press releases to producing their social media strategy and advising them on which marketing activities to pursue. When they went to Paris to launch a new product, I was on the plane; if they had an event in America, I was there; if they had an important meeting in Singapore, I travelled with them; and when they launched in the Middle East, I was on the ground.
In the six years that I advised them and acted as a member of their extended family, I watched the son’s part of the company go from an unknown, small, unprofitable brand to the best-loved, most culturally relevant, highest grossing brand in its industry. At the same time, I saw the father’s brand falter, stagnate and slow down. Ultimately the son’s brand would overtake his father’s generating more than a billion dollars in revenue.
I had front-row seats to both businesses, their decisions and their philosophy, and I can say with total confidence that the most significant reason why the son overtook his father is that the son had a failure rate that exceeded that of his father by a factor of ten.
When my teams made a technological discovery relating to marketing, growth or social media, we brought it to both brands at the same time, on the same day, but we were greeted with very different responses. I recall one such innovation where we found a way to grow their social media following
20 times faster than usually possible using a technique we’d discovered with a particular platform. I personally took this discovery to both the son and the father in 2016, in two separ- ate meetings.
The father’s team listened to the idea, requested a bigger presentation, scoffed at our fee and they informed me that they would need various layers of sign-off to proceed. Nine months later, they were still ‘discussing it internally’.
The son didn’t put me in front of a team at first; he wanted to hear the idea himself. Before I could even finish my explanation, he called out to his assistant, ‘Bring all of the marketing team into the room asap.’ When the marketing team arrived, he told me to repeat what I had just said, and upon finishing my explanation, he looked at his team and remarked, ‘We’re going to do this today.’ He looked back at me and said, ‘Steven, whatever you need, it’s sorted – full steam ahead, right now!’
No contracts, no lawyers, no layers of sign-off, no delays – trust, speed and empowerment.
That one idea resulted in the son’s brand adding 10 million more followers to one of its social media channels over the following months. In the end, it cost them 95 per cent less to grow their social media page using our discovery, than all the strategies that the brand had adopted in the past.
The son instinctively knew that this was a ‘Type 2’ deci- sion the sort of decision that wouldn’t have irreversible harm if it failed, could be reversed, but also could ultimately change the course of the brand if it succeeded. And he knew that in the face of a Type 2 decision, Jeff Bezos’s words should be followed: ‘Type 2 decisions can and should be made quickly by high-judgement individuals or small groups.
The son knew that the biggest cost wasn’t failing, it was missing an opportunity to grow and wasting time to learn a new lesson regardless of the outcome. If the experiment had failed, it would have cost them one day and a little money, and we’d be on to the next experiment within 24 hours, one failure closer to the right answer.
By the time the father’s brand had decided to cautiously proceed with the idea, some ten months later, it no longer worked the platform loophole we were using had been closed, and growing a social media channel had once again become expensive, complicated and difficult.
It’s important to note that most of the ideas we brought to the son didn’t have such astonishing results. Most experi- ments fail, no matter how well-designed. I would estimate that three in ten were tragic failures, three in ten were aver- age failures, three in ten were good, and one in ten was great so great that it changed the fortunes of their business and paid for any losses incurred by the other nine.
Get to 51 per cent certainty, and make the decision.
Many years later I would have the honour of sharing the same stage as Barack Obama in Brazil, and Obama would remark that when facing tough decisions like whether or not to fly into Pakistan unannounced at night in the hope of assassinating Osama bin Laden – he turned to probability instead of certainty.
He said every decision was painstakingly difficult: ‘If it was an easily solvable problem, or even a modestly difficult but solvable problem, it would not reach me, because, by definition, somebody else would have solved it.’
Instead of saying, ‘Will X or Y happen if I make this decision?’ he would say, ‘What is the chance of X or Y
occurring?” He insisted that having smarter people in the room was key: ‘Having the confidence to have people around you who were smarter than you or disagreed with you is critical.’ And he would weigh each decision not just on the probability of being right, but the impact it would have if he was wrong: ‘You don’t have to get to 100 per cent certainty on your big decisions, get to 51 per cent, and when you get there, make the decision quickly and be at peace with the fact that you made the decision based on the information you had.’
As I came to learn from working with the father and son’s companies, from my more than ten years advising the world’s leading brands, and from Barack Obama, the truth is that perfect decisions exist only in hindsight; dwell- ing too long on potential outcomes, and procrastinating in the process, is futile. The real cost of indecision in business is wasted time. That time could have been used failing your way to knowledge that would ultimately help you to succeed. Instead, some brands freeze in fear, and in their attempt to avert any losses, they end up losing the most expensive and important things: opportunity, knowledge and time.
Nassim Taleb, author and researcher, sums it up in this graph:
★CREATING A PRO-FAILURE PHILOSOPHY
Some of the companies I worked with got this right: they had lightning-fast experimentation cycles, they viewed change as an opportunity, they out-failed their competition and they nearly always outpaced their industry. Some of the compa- nies I worked with believed in this philosophy, tried it and failed; they asked their teams to innovate more, wrote it on the office wall, but it simply never happened. And some companies didn’t believe in it at all; those companies were almost never founder-led, they were either stagnant or in decline, and they viewed the changing world as nothing more than a threat.
I discovered five consistent principles that the most inno- vative companies naturally embodied, which I believe enable teams to out-fail their competition:
- REMOVE BUREAUCRACY
‘It is a villain,’ says Walmart CEO Doug McMillon. ‘Its ten- tacles should be treated like the cancers they so much resem- ble,’ says Berkshire Hathaway vice chair Charlie Munger. ‘It’s a disease,’ says Jamie Dimon, the CEO of JPMorgan Chase.
All of these esteemed business leaders are talking about ‘bureaucracy’ a word that seems to have no successful fans. In simple terms, the worst corporate bureaucracies are companies with lots of rules, long and painful sign-off processes, and several layers of hierarchy between the bottom and the top.
These systems disempower employees, slow companies down, disincentivise experimentation, delay innovation and stifle the goldmine of ideas that exist in the minds of the workforce.
Systems like this are a tax on human ingenuity, energy and entrepreneurism.
As Laurence Peter, author of The Peter Principle, put it: Bureaucracy defends the status quo long past the time the quo has lost its status.’
Bureaucracy is often seen by company leaders as an unfortunate necessity for businesses operating in complex regulatory and international environments. The US work- force is an example of this: since 1983, the number of managers, supervisors and administrators has increased by over 100 per cent, in comparison to an increase of roughly 40 per cent for all other occupations.
In recent years, nearly two-thirds of workers said their organisations had become more bureaucratic, according to a Harvard Business Review survey. Meanwhile, productivity growth has stalled. In the bigger companies that have come to dominate Western economies, bureaucracy is particularly detrimental. In the US labour force, over one-third of work- ers are employed in firms of 5,000 or more employees – and frontline workers are generally overseen by eight manage- ment levels.
Considering the astounding speed of change happening in the world as revealed in Law 5 – doing anything to slow down your company’s rate of experimentation at this point in history is a death wish.
Haier Group, a Chinese appliance business that gener- ates more than $35 billion in annual sales, understands this better than anyone. To avoid the toxic consequences of bureaucracy, they’ve divided their 75,000 employees into 4,000 micro-organisations, most of which have just 10 to 15 employees. Decisions are made at lightning speed by
small, autonomous teams and subsequently they’ve managed to out-fail their competition, innovate at the speed of the market, and dominate their industry.
And Steve Jobs, co-founder and CEO of Apple, when speaking about bureaucracy at the company, said:
We are organised like a start-up. We’re the biggest start-up on the planet and we all meet for three hours once a week and we talk about everything we’re doing. Teamwork is dependent on trusting the other folks to come through with their part without watching them all the time, but trusting that they’re going to come through with their parts. And that’s what we do really well.
The key, as I’ve witnessed in all of my own companies, clients and case studies, is to make project teams as small as they can possibly be, to give them more authority, trust and access to resources when making decisions, and to cut back all sign- off processes, especially when a team is seeking to make a Type 2-low-consequence, reversible – decision.
- FIX THE INCENTIVES
In 2020, my company was tasked with resuscitating a falter- ing fashion e-commerce company that was on the brink of financial collapse. The Covid-19 pandemic had prompted the closure of their physical stores, resulting in a reduction of staff and wages. Employee morale was on its knees and a new CEO had recently been appointed to steer the company in a new direction.
During my first presentation to the CEO, I outlined the need for the company to increase their rate of failure by
an order of magnitude in all areas, including marketing. They were lagging behind their competitors, missing opportunities and squandering resources on ineffective traditional tactics.
Upon hearing my proposal, the CEO mentioned that the company already encouraged their team to experiment more, citing the inclusion of ‘fail faster’ as one of their four core values in the employee handbook, and two of the words prominently displayed on the office kitchen wall.
Following my presentation, I held private sessions with staff from managers to interns for several hours. During a meeting with the brand’s marketing team, I posed the question, “What reason do you have to fail more often?’ A prolonged, revealing silence ensued before I rephrased the question, asking, ‘What reason have you got not to fail more often?” The marketing manager’s previously paralysed mouth sprang to life as she drowned me with a series of responses, including ‘I don’t want to be embarrassed’, ‘I won’t receive a pay increase’, ‘people will think less of me’, ‘I might be fired’, ‘I’m too busy to try new things’.
As she rattled off more and more reasons, it became increasingly apparent that the organisation was plagued by a disease called ‘misaligned incentives’ what the company expected of its employees was not in line with what it incen- tivised them to do. The company wanted innovators, risk takers, entrepreneurs – but, upon close inspection as is the case in most slow, dying companies people were simply incentivised to … do their job, no less, no more.
It is startling to me, still, that any CEO would believe that the cute words, clichéd slogans and aspirational values they put in employee handbooks matter at all.
Words need evidence, incentives and example to bring them to life. Human behaviour is not driven by platitudes, slogans and wishful thinking.
If you want to predict what a group of people will do over the long term, you need to look at their incentives, not their instructions.
To redesign the incentives of the marketing department, one of the many systems I implemented was a recognition process designed to celebrate an employee or team when an experiment was successfully executed, regardless of the outcome. After all, executing the experiment is the control- lable factor; whether it’s successful or not in the market is impossible to control, so it’s not where our incentives should focus.
- PROMOTE AND FIRE
I told the CEO of the fashion company to identify the employ- ees that were failing the fastest and to promote them as high in the organisation as she could. Companies don’t have one company culture; every manager in an organisation creates a sub-culture underneath them.
At my first marketing company we had almost 30 managers, and I observed time and time again how one team’s satisfaction, attitude and philosophy could be starkly different to the team they were sat next to, purely because of their manager. With 30 managers, we really had 30 company cultures.
Influence trickles down: you need the people at the highest point in the company to be the most avid disciples of your cultural values.
When you promote those employees – or give them pay rises let all team members know why they’re being promoted, and point out their exceptionally high failure rate.
Conversely, it’s important to swiftly remove individuals from the team that stand in the way of the flow of new ideas, fast failure and experimentation. Especially if those employ- ees are managers – one bad manager can destroy the morale, motivation and optimism of a great team of perfectly cара- ble, hopeful and entrepreneurial employees.
- MEASURE ACCURATELY
While advising the fashion e-commerce business, I asked the CEO to establish, educate and continually communicate to all team members an ‘experimentation process’ that every- one should follow, use to measure, and use to communicate a new idea or experiment that they wanted to pursue.
Too often employees don’t step forward with new ideas because they’re unclear on the process they should follow. Education is the easiest way to remove operational psychological friction.
And lastly, I told the CEO to measure team by team the organisation’s failure rate, with a clear goal of increasing every team’s failure rate by a factor of ten by year end.
In business, you don’t improve what you don’t measure, and what you focus on grows. By establishing visible KPIs key performance indicators) and clear goals, and making them everyone’s responsibility, nobody at the fashion busi- ness could be ‘too busy’ for experimentation as is the case under the kaizen philosophy it became a central part of everyone’s job.
The organisation slowly changed direction, breaking even for the first time in seven years in the first year, and turning a sizeable profit in the second.
Its newfound creativity, innovation and empowered work- force made it feel like a brand-new company. Staff retention rates improved, employee satisfaction scores soared and the company innovated more than ever before.
- SHARE THE FAILURE
If you want to maximise the return from every failure, it is crucial to disseminate the details of each failed hypoth- esis, experiment and outcome throughout your organisation. This information represents a form of intellectual capital that can serve as a foundation for future experiments. By openly sharing failures, you can prevent the duplication of unsuccessful efforts, stimulate the development of new ideas, and foster a culture of continuous experimentation.
As Thomas Edison said, ‘I have not failed. I’ve just found 10,000 ways that won’t work.’
★THE LAW: YOU MUST OUT-FAIL THE COMPETITION
Failure is not a bad thing, and to increase your chances of success you need to increase your failure rate. Every time something is tried and found not to work, valuable informa- tion is gained that can be shared with your team. Businesses that experiment faster, fail faster, and then continue to experi- ment, nearly always outpace the competition.
Failure = Feedback.
Feedback = Knowledge.
Knowledge = Power.
Failure gives you power.
The Diary Of A CEO
LAW 22
YOU MUST BECOME A PLAN-A THINKER
This law will demonstrate why your Plan B in life might just be the biggest hurdle to the success of your Plan A.
The story I’m about to tell you changed my life.
On Friday, 13 October 1972, Nando Parrado woke up after being unconscious for 48 hours. He wasn’t coming round after an operation or emerging from some two-day bender: he was surrounded by dead bodies and injured friends, thou- sands of feet above sea level in a glacial valley in the Andes, amidst the wreckage of an airplane crash, with no means of calling for help or even working out exactly where they were.
Of the 45 passengers, members of a Uruguayan rugby team on their way to Chile for a match, 29 survived the crash. Initially they did what they could, drinking melted snow and eating whatever they could salvage from their luggage. ‘On the first day,’ recalled Parrado, ‘I slowly sucked the chocolate off the peanut On the second day … I sucked gently on the peanut for hours, allowing myself only a tiny nibble now and then. I did the same on the third day, and when I finally nibbled the peanut down to nothing, there was no food left at all.
A full week later, facing the threat of starvation and knowing, after finding a transistor radio, that the Chilean authorities had called off their search efforts, Nando and his fellow survivors did the unimaginable: they decided they had no choice but to eat the dead bodies.
Among the few women on the plane had been Parrado’s mother and little sister, whom he had invited on the trip to watch him play. His mother, Xenia, 49, died instantly on impact; his little sister, Susy, initially survived the crash but died in her brother’s arms a week later.
The first body they ate was the pilot’s, since they held him responsible for the crash. Other bodies, the survivors agreed, were off limits, including those of Xenia and Susy. But Parrado became tormented by the idea that someone would violate their agreement, and he couldn’t live with himself if that happened.
Two months after the crash, Parrado announced that he was setting off to find help. He was starved, had no moun- taineering experience, and no idea where he was going, but somehow this was a better option than eating the bodies of his mother and sister: ‘I didn’t want to have to eat their bodies, I didn’t want to face that moment,’ he said.
Nando and his friend Robert sewed together material for a sleeping bag and knocked together a sled, then set off. They decided to ascend rather than descend, since a higher vantage point would give them a better chance of working out an escape route. It took them three gruelling days and they somehow made it to the top of a 15,000-foot peak three days later, but didn’t find what they were hoping for.
What I saw when we reached the peak of the first moun- tain really froze me. I couldn’t breathe, speak or think,
what I saw was horrible; instead of green valleys, we saw mountains and snow-covered peaks, 360 degrees around us, stretching as far as we could see into the horizon. And that’s when I knew I was dead But there is no way that I can go back, and eat the bodies of my mother and sister, the only way is forward, we will die, but we will die trying … I will keep on going until I stop breathing.
They staggered down the other side of the mountain and began to force themselves along the glacier below, growing ever weaker day by day. The pair limped on for ten days through the ice-cold mountains, deep snow and deadly crevasses.
‘It was a blurry, continuous, painful effort, the mountains were so huge that it feels like you’re not making any progress, you would set yourself a target location in the distance, and you would think it would take two or three hours to get there, but it was so huge that you never seemed to get there,’ he said.
Sickness set in, the men’s bodies began to shut down, and then on 18 December, they came upon a river. As they followed it, they saw signs that someone had been there recently: a soup can, a horseshoe, even a herd of cows, until finally on 20 December, they spotted a man on horseback on the other side of a huge river.
The men couldn’t make themselves heard above the roar of the river, so Parrado mimed an aeroplane crashing to try to explain who they were, though he worried the man would think he was mad and ride off. Instead, the man tied a note to a rock and threw it across the river: “Tell me what you want.
Parrado wrote back, ‘I come from a plane that fell into the mountains. We have been walking for ten days. We have no food, and I can no longer walk.’ He explained that he had
14 friends remaining in the mountains alive, and that they desperately needed help.
The man received the note and was shocked, but believ- ing what he read, he travelled for ten hours on horseback to the nearest civilisation and returned the next day with a rescue team. Miraculously, 72 days after the plane crash, Parrado and his friend were saved, and the next day he took the rescue team back to the crash site in a helicopter, where the 14 other survivors would be found and rescued.
‘The only way you go forward, is because you can’t go back,’ he explained.
Parrado’s story is a story of human perseverance, fortitude and courage, in the face of hopeless desperation. I stumbled across his story at 19 years old, while I was in a dire financial situation, trying to pursue my first business idea, disowned by my parents for dropping out of university, shoplifting and scavenging food on my worst days, while living in a deprived area of the country, alone and broke.
His story changed my life. It gave me hope in my darkest time, wind in my sails when I needed it the most and more reason to push on despite the circumstance I was in. After several years of perseverance, I too had escaped my situation: I had built a successful company, I was financially free, and my life resembled that of my wildest dreams.
“The only way you go forward, is because you cannot go back.’ I couldn’t go back. I had nowhere ‘back’ to go. Not having a Plan B became the most incredible motivational force in my life. When the human mind excludes all other possibilities and fixates on a single path, that path draws in every available ounce of your passion, perseverance and power, leaving no room for hesitation or deviation.
‘The first step before anybody else in the world believes it is you have to believe it there is no reason to have a Plan B, because it distracts from Plan A.’ –
Will Smith
Had I had an alternate path available to me, it’s entirely possi- ble that those darkest of hours might have lured me down it. This might sound like cute but meaningless motivational words or an unrealistic platitude, but amazingly, researchers have recently revealed that having a Plan B – in any ambition – has a net negative impact on our chances of succeeding with our Plan A.
★MAYBE WE SHOULD PUT ALL OUR EGGS IN ONE BASKET
You’ve probably heard the advice ‘Don’t put all your eggs in one basket’. When it comes to choosing a career or apply- ing to university, or even applying for a new job, having a back-up plan is widely thought to be a good idea. Studies have shown that this approach does help to alleviate some of the psychological discomfort associated with uncertainty, but astoundingly new research has also shown that it comes at a big cost.
Having a back-up plan, or even considering one, has been shown to potentially hinder your performance by making you less driven to hit your primary goal.
Across three studies, almost 500 students were asked to solve a difficult word puzzle that involved unscrambling muddled sentences. If they were successful, they would be given a deli- cious snack. Before attempting the puzzle, some groups of students were told to think through a back-up plan- other ways they could get a free snack on campus – if they couldn’t unscramble the sentences.
Researchers found that the groups that had no Plan B performed radically better than the back-up plan groups; they had higher levels of motivation, valued success more, and solved more of the puzzle. Subsequent experiments have replicated the results in other contexts with different rewards (e.g., money, other prizes and saved time), and the results were always the same.
One of the researchers, behavioural scientist Katy Milkman, concluded: ‘This suggests that thinking through a back-up plan will actually make you want to achieve your goal less, which then hurts your effort, performance, and ultimately, your chances of successfully achieving your goal. These findings apply to goals where success is highly depend- ent on effort.’
Additionally, while some can feel frozen by their fear of failure, research shows that the fear of failure can actually provide the impetus needed to get to your goal. In a similar vein, other research has shown that the more you perceive negative emotions in the event of failure, the more driven you will be to succeed. However, if you have a back-up plan, the
incentive to succeed is lessened because you have removed the fear of failure.
★BEING RISKY DOESN’T MEAN BEING RECKLESS
If you’re reading this and it’s made you consider making a deadly ten-day trek across the Andes mountains, I need to provide a disclaimer. There is a difference between taking a risk – focusing your entire being on a goal – and being outright reckless.
In my story, of course, I was not at risk of death; I’m fortu- nate enough to live in a society that would have caught me, fed me and housed me, if I had needed catching. And many of you will have dependents, mortgages and other responsi- bilities that you understandably need to protect. Practicality must be a priority.
THE LAW: YOU MUST BECOME A PLAN-A THINKER
This law remains one of those uncomfortable, unavoidable realities of the human condition. The amount of ourselves that we can dedicate to an outcome – mind, energy and focus – is positively correlated with the likelihood of that outcome. Some call this manifestation, but I call it Plan-A thinking. In the pursuit of your most important goals, a back-up plan is an additional weight to carry, a motivational burden to bring and distracting companion to call.
There’s no greater force of creativity, determination & commitment than a person undistracted by a plan B.
The Diary Of A CEO
LAW 23
DON’T BE AN OSTRICH
In this law you’ll learn why my biggest professional mistake in business was behaving like an ostrich when I should have acted like a lion. In your career being an ostrich will get you killed. This law will teach you how to avoid being an ostrich.
‘God himself could not sink this ship,’ said Edward Smith, captain of the Titanic, as people warned him of the dangers of ice in the area.
Hours later, when the ship struck an iceberg, and began to flood and sink, First Officer Murdoch, who had been on watch at the time of the collision, is reported to have turned to chief steward John Hardy and said, ‘I believe she [the Titanic] is gone, Hardy.’
Despite their looming fate, passengers later recalled a bizarre sense of calm, disbelief and normality on the decks.
“There were some people who were playing cards, and there was one man who was playing the violin. They were just as calm as if they were in a drawing room,’ said passenger Edith Russell.
Another passenger, Ellen Bird, described how some people seemed to completely ignore their impending fate: ‘I saw one or two men and women get up, look out of the
window, and then sit down again, evidently with the idea that they would go back to bed.
William Carter, who survived by climbing into a collaps- ible boat, one of the last lifeboats to get away, said he had tried to convince George Widener to come with him in the lifeboat. Carter said that Widener ignored his warning and said, ‘I think I’d rather take my chances.’
Consequently, the already limited number of lifeboats were leaving partially empty. As the situation grew more dire, crew members began to frantically blow whistles, panic and shout orders to try to get the passengers to the lifeboats. According to survivor accounts, some of the crew members had to physically force people to board lifeboats, against their will.
Very late in the sinking, just minutes before the boat was completely submerged, when most of the decks were completely flooded, widespread panic did begin. Second Officer Lightoller had to brandish his gun and Fifth Officer Lowe actually fired shots along the side of the ship to keep people from swamping the last lifeboats as they were being loaded and lowered. One frantic crew member even entered the radio room and attempted to steal the senior wireless officer Jack Phillips’s lifebelt as he was working the radio.
Consequently, of the 2,240 people on board, almost 70 per cent of them died.
Such denial is a complicated thing to understand. As you read this story, hindsight might portray these avoid- ant, unresponsive passengers as foolish, irrational and reckless. However, their response perfectly illustrates a very human, very common behavioural phenomena called ‘the ostrich effect’.
★THE OSTRICH EFFECT
When an ostrich senses danger, it buries its head in the sand. The idea is that if the ostrich can just hide from the threat, the danger will eventually pass. We humans are no differ- ent. When dealing with difficult information, situations or conversations, we tend to be like the ostrich and bury our heads in the sand too.
As humans, we are hard-wired to avoid discomfort. We stop ourselves from checking our bank accounts when we know we’ve overspent, we avoid difficult conversations that we don’t want to have, and more problematically, we delay booking that doctor’s appointment, to avoid receiving bad news about our health.
A report recently released by UK bank TSB revealed that indebted British people are cumulatively losing £55 million a month by not confronting their finances and making simple changes. One substantiating study found that investors were likely to check the value of their personal investment portfo- lios when the markets overall were rising, but would avoid looking when the markets were flat or falling.
In a more startling study of 7,000 women aged 50-64, researchers found that women who had heard a colleague had been diag- nosed with breast cancer were almost 10 per cent less likely to go and get a free check-up themselves.
In the moment when the ostrich effect kicks in, we don’t just have anxiety, the anxiety has us, and that anxiety presses us to avert our
gaze from the thing that is making us most anxious. As psychi- atrist George Vaillant notes, ‘Denial can be healthy, enabling individuals to cope with rather than become immobilized by anxiety, or it can be unhelpful, creating a self-deception that alters reality in ways that are dangerous.’
In entrepreneurship, the ostrich effect is too often the difference between a company’s success or failure. Research conducted by Leadership IQ, the corporate survey firm, collected data from more than 1,000 board members across almost 300 organisations that had fired their CEO. They found that 23 per cent of those boards had fired their CEO for ‘denying reality’, 31 per cent for ‘mismanaging change’, 27 per cent for ‘tolerating low-performing staff and 22 per cent for ‘inaction’. These are all common corporate symp- toms of the ostrich effect.
In business, the person with the fewest blind spots stands the greatest chance of victory.
We think better, make better decisions, and achieve better outcomes when we’re closest to reality. The stories of Kodak, Nokia, Blockbuster, Yahoo, BlackBerry and MySpace illus- trate clearly that those who feel most invincible are often most susceptible to becoming an ostrich in the face of inno- vation, change and inconvenient truths.
★ HOW TO AVOID BECOMING AN OSTRICH
I interviewed world-renowned author Nir Eyal in my office in New York in preparation for this book; he’s spent several years studying what motivates human behaviour at the best and worst of times. He told me:
People think they’re motivated by seeking pleasure; they’re wrong, they’re motivated by avoiding discom- fort. Even sex and the horniness it creates – is a form of discomfort that we seek to relieve ourselves from.
Most people don’t want to acknowledge the uncom- fortable truth that distraction is always an unhealthy escape from reality.
How we deal with uncomfortable internal triggers determines whether we pursue healthy acts of traction or self-defeating distractions.
In my own career, none of my greatest professional mistakes and regrets were unsuccessful business decisions that I made; they were the instinctively obvious but terribly uncomfort- able decisions I didn’t make: the things I avoided confronting through fear, uncertainty and anxiety. The person I knew I needed to fire but didn’t, the conversation I needed to have with a client but avoided, and the warning I needed to articu- late to the board that I delayed.
Similarly, we can all relate to the toxic consequences that the ostrich effect can have on our romantic relation- ships: avoiding the difficult conversation, evading the awkward issues and pretending things are fine. These symptoms of co-denial and mutual avoidance hold a failing relationship in place, when neither party has the words, courage or conviction to confront their unmet needs.
Arguments happen, but they’re rarely the right arguments.
In a relationship, if you’re having the same conversation over and over again, you are having the wrong conversa- tion. You’re avoiding the uncomfortable conversation you should be having.
Pain in every walk of life is unavoidable, but the pain that we create by trying to avoid pain is avoidable.
In business, the pain of the ostrich effect and the unresolved conflict it creates is felt by your employees, in parenting it’s felt by your children and in your own life it will be felt in your mind, your body and your soul.
A White House staff member during the Kennedy administration once commented that it was always obvious when there was conflict between the president and the First Lady versus when they were relating amicably. When met with surprise from the interviewer that their relationship would be so transparent, the staff member replied:
They actually were quite private about their strug- gles, but we knew when they were fighting simply by watching the interactions of their personal staffs. When the hairdressers and the transport people were argu- ing we knew this was because JFK and Jackie were in some form of conflict. When these groups had their act together, we knew the first couple was getting on OK.
At the core of this story from the Kennedy administration is the notion that conflict moves around within and between levels of a social system. When something is unresolved because we’ve chosen to bury our heads in the sand, it doesn’t sit dormant, waiting to be addressed; it becomes toxic, conta- gious and poisonous to those around us, and inflicts more collateral damage with every day that it remains unaddressed.
Five years ago, I realised that I needed to find a way to overcome my own ostrich-like behaviour so that I could
confront the most uncomfortable of realities in life, business and love, with speed and honesty. It’s my belief that you cannot reach your highest potential without a better rela- tionship with discomfort, bad news and inconvenient truths.
Using advice from behavioural economics, psychology and sociology, I created my own four-step approach to dealing with discomfort and avoiding procrastination.
STEP 1: PAUSE AND ACKNOWLEDGE
The first step is to pause and to admit to yourself that some- thing is not right. Such moments of pause tend to come about when people notice the power and horrible longevity of their own unwanted emotions. If you don’t pause, the process cannot begin and you cannot create enough space for the next step.
STEP 2: REVIEW YOURSELF
The next step is to inspect yourself in terms of feelings, behaviours and emotions. These examinations are critical.
They enable people to begin to articulate what they have only sensed: that something is awry in them, something is misaligned, a need is being unmet or a fear has taken control.
People who pause and inspect themselves are like detect- ives that are aware that a crime has been committed – they can see the evidence in its wake, but they haven’t yet identi- fied the culprit. Solving such crimes usually involves the help of others. People need help to get outside of their own narra- tives and accurately diagnose themselves, rather than simply being driven by their preferred ways to frame and blame.
STEP 3: SPEAK YOUR TRUTH
The next step is to speak your truth. Share the findings of your inspection, without blame and with an emphasis on personal
responsibility. This marks the moment that unaddressed interpersonal conflicts move from the wrong conversations to the right conversations.
In the ostrich effect, people turn away from and do not speak directly of the emotions that grip them. They avert their gaze, misdiagnose the issues and distract themselves with something else. The issue that lies beneath remains unspoken. That silence drives the ostrich effect. Loosening its grip begins with the moments that people speak what has not yet been spoken. Ironically, the science shows that it is in talking about our disconnections that people create more connectedness with one another.
STEP 4: SEEK THE TRUTH
In the last step, you must humbly seek the truth – a feat that is easier said than done in the presence of our cognitive biases, righteousness and ignorance. This means to listen. But not just listening to hear, listening to understand. Not from the perspective of an adversary that’s looking for victory, but from the perspective of a partner, patiently intent on over- coming a difficulty.
When you do seek, hear and understand the truth, the discomfort it creates may tempt you to bury your head once again, but the key is to return to the first step, take a pause, and repeat the process until you reach an end.
★THE LAW: DON’T BE AN OSTRICH
Avoiding uncomfortable realities and difficult conversations is unhelpful in business and in our personal relationships.
We must recognise what isn’t right, assess what we can do about it, share our findings and get to the truth, however challenging that might be.
If you want long-term success in business, relationships and life, you have to get better at accepting uncomfortable truths as fast as possible.
When you refuse to accept an uncomfortable truth, you’re choosing to accept an uncomfortable future.
The Diary Of A CEO
LAW 24
YOU MUST MAKE PRESSURE YOUR PRIVILEGE
This law teaches you how comfort is slowly killing us mentally, phys- ically and emotionally. It will help you understand how and why we must make life’s pressures our privilege.
With 39 Grand Slam titles, Billie Jean King was expected to win. People were counting on her. The pressure might have been too much for anyone else, but not her. She had won a record 20 titles at Wimbledon, the entire tennis world watched her play, every sportswriter was ready to criti- cise her every move. When asked how she coped with the unthinkable burden of the world’s expectations, Billie Jean King casually replied, ‘Pressure is a privilege – it only comes to those that earn it.’
This statement ‘pressure is a privilege’ naturally evokes a mixed reaction, as most overly simplified mantras do. When people hear it, they hear ‘stress is a privilege’, so it’s important to clarify that stress and pressure are two entirely different things. Stress is an internal psychological response and pressure is an external environmental force. Of course, pressure can cause both good and bad stress, depending on the individual, but the pressure itself is not