Posts

Marketing Science is Great in Theory…

/0 Comments/in /by

Lately I’ve been struck several times by the huge gap between what we might call management science, and the reality of what really happens in the world of management.

  • Corporate training people plan multi-stage programs for the maximal developmental impact; the programs more often than not get cut off in mid-program.
  • CEOs pronounce intentions; the tea leaves are read, rightly or wrongly, and the reactions are very often deep cynicism or blind faith—not much in the rational middle area.

This runs deeper than just events overtaking plans. This pattern of the irrelevance of theory in the real world of practice is rooted far more deeply—in the human psyche.

Consider the latest on Barnard Madoff and Susan Boyle.

Madoff Less Sociopath, More Common Crook?

Fortune Magazine  tells How Bernie Did It. Many things are astonishing about Madoff. One I figured out ahead of the crowd—the fact that his “investments” were pure vaporware.

But I mistook the scale of his crime for the scale of his mental bentness. I was hardly alone in thinking him a sociopath. Now, I think, he’s just more of a common crook.

In a recorded phone call Madoff made to Fairfield Greenwich’s representatives just before an SEC visit, Madoff began with these words: “Obviously, first of all, this conversation never took place…okay?”

These are Tony Soprano lines—not mentally ill or deluded, just garden variety sleazy crook talk. This fosters distrust based not on mental stability, but on the much more familiar grounds of low integrity.

Madoff went on to remind Fairfield of their cover story, that Madoff only executed strategies formulated by Fairfield. He then essentially told Fairfield he would send Fairfield’s revised strategy on to them, contradicting himself in an almost Kafkaesque way.

Madoff successfully threatened Fairfield with taking away their golden goose–and Fairfield groveled and apologized for daring to let their customers withdraw funds! Finally, it appears Fairfield left their own money in too.

And so–Fairfield claims they were bamboozled along with all the rest. And they appear to mean it.

How is it that can you be complicit with a crook, take massive ill-gotten gains, grovel to a blackmailer, then get ripped off–and then feel righteously indignant about it?

This is the same mindset that says ‘no convict is guilty,’ at least according to the inmates. Which begs the question: What’s the difference between Fairfield Greenwhich and the Craigslist Killer’s fiance’?  (answer–the fiance is less into denial).

The best logic of the best court system can’t lay a finger on the self-judgment of those being judged. Our ability to rationalize overwhelms our capacity to be rational.

Susan Boyle: Irrational Reactions

The NYTimes today has the last (please) word on the Susan Boyle phenomenon, and it is again about how “rational thought” is an oxymoron. Let’s look at what we all thought. We thought:

-she’s a frump; no, wait, she’s an angel
-Simon Cowell judged a book by its cover; me, I just changed my mind based on new data
-people use stereotypes all the time, except for me of course

Susan Boyle proves people are prejudiced. But people won’t change. “Proof” is pitifully weak when up against assumptions.

In business, I often think of Indiana Jones’ encounter with the intricately practiced Arabian master of the sword, threatening to bring years of skill and practice to bear on Indiana in the form of whirling cold steel.  Jones responds with a disgusted eye-roll—and a point blank shot from his .45.

Theory is the sword—so often outclassed by the blunt force of emotion, a far more powerful driver of human behavior.

Management theories that don’t take human reality into account are so much whistling in the wind.

Do People Trust Rationally?

/3 Comments/in /by

In the Q&A session of the webinar I gave yesterday, someone asked an interesting question: do people come to trust in rational ways? He didn’t mean “is it rational for people to trust the things they trust?” His question was about the ways in which we come to trust, not the choice we end up trusting.

The answer at first blush seems “clearly not.” After all, look at the success of con men, the concept of love at first sight, and, for that matter, the charisma of some politicians. Rational? Hardly.

And yet—if the way we come to trust isn’t logical, careful, thoughtful, cognitive and evaluative—then why do we act otherwise? Why do lawyers focus so much on briefs, consultants on proposals, and politicians on platforms? For many in business—particularly the professions—the belief that trust comes from rational argument is so deeply held that it’s enough to prove the opposite.

From a bastion of rational argument—Science Daily—comes more fuel for the non-rational side. In Extreme Appeal: Voters Trust Extreme Positions More Than Moderate Ones, Study Finds
we read:

Trying to appear moderate is not always the best strategy for capturing votes during an election, reveals a new study. Extreme positions can build trust among an electorate, who value ideological commitment in times of uncertainty.

[this is a] challenge to the widely accepted median voter theorem…in which voters who are fully informed will…choose the platform that is closest to their own beliefs. Thus…to attract the majority of votes, parties should try to appeal to the majority of voters.
The researchers argue that in the real world, few voters are “fully informed” or anywhere near it—thus the real persuasion happens not through individual voter policy analyses but through a comparison of the relative attractiveness of competing ideologies.

However, I think even this understates the non-“rational” approach to voting. Sure, to some extent we think “I’m more of a lib-social-democrat-cum-conservative-economics.”

But there’s more. There’s the power we all feel in the face of someone with certainty. Like confidence, it’s catching. It’s compelling. We may deplore sound bites, but they work—the war on poverty; government’s not the answer, government’s the problem. The Big Lie works because it’s simple: Saddam was behind 9/11, Obama is a Muslim. The less we know, the more awed we are by those who do know—or seem to.

Want to win an election? A (very) few voters swill tudy platform planks. A few more will “vote Democratic.” But more yet, I suspect, will vote for the guy who sounds like he’s got a simple answer to a complicated question.

From the same article:

"The current political advantage of the Republican Party stems from the ability of its candidates to develop ‘signature ideas.’ This strategy is rewarded even when the electorate has ideological reservations," says University of Southern California economist Juan Carrillo, adding that this poses a challenge for the Democrats.

 

Years ago, Herman Kahn of the Hudson Institute articulated the role of hypocrisy in social situations. A father in a small town, he said, doesn’t want his daughter to have access to pornography. And—if she finds it anyway—he wants to be able to say he didn’t know about it.

How can you talk about rational decision-making in a species that lies to itself?

The human mind is certainly complex. We like simple answers, but for complicated reasons. Sales author Jeffrey Gitomer says, “people buy from the heart, and then rationalize their decisions with the brain.” Often our brain arrives at rational decisions by bypassing “rational” thinking.

Do we come to trust rationally? No. It’s far more complicated than that. To describe human decision-making in purely rational terms is to under-estimate human nature.

Which means—if you want to be trusted, you won’t get there on powerpoint slides alone. Unless it’s just one slide. And real simple.

And you read it like it’s Revealed Truth that only you have access to.