12 secrets of ‘Alchemy’

In his first book ‘Alchemy’, advertising legend, Rory Sutherland, focuses on the challenge of succeeding with nonsensical ideas. Rory explains why we should let go of logic to enable us to generate better ideas and solve business problems creatively. Here are 12 secret ingredients of ‘alchemy’:

1. The opposite of one good idea can be another

Conventional logic loves the idea of a single right answer. This is because, once you’ve come up with the answer, no matter how narrow the pool of material you’re pulling from, no one can fault you for following the logic to its conclusion. No subjectivity or unnecessary deviation was involved. However, this is a potentially disastrous approach if you want to generate fresh thinking.

Before James Dyson got involved, vacuum cleaners were a purely grudge buy. A utilitarian purchase that was only necessary if your old one had died. Logically, it made no sense to reinvent vacuum cleaners as cool looking high-ticket items. There was no demand for them. However, Dyson managed to add a degree of excitement to a boring household item and, with that touch of creative magic, created to one of the most successful products of the 20^th century.

2. Don’t design for average, design for an unmet need

Most models of problem-solving will cause you to come up with a solution for a single, non-existent, representative individual with lots of completely average characteristics. This route can send you down a cul de sac, because it’s impossible to develop something you can be confident a fictitious person will definitely like. Instead, focus on standout ideas that might be readily adopted by those with an existing unmet need. Then you can make your way into the mainstream.

Take the humble sandwich. An 18^th century culinary stroke of genius. The Earl of Sandwich was an obsessive gambler and wanted his food in a form that wouldn’t require him to leave the card table. Hence, the mad but simple idea of packing a filling between 2 solid slices of bread. No need for cutlery or leaving the table.

3. It doesn't pay to be logical if everyone else is being logical

In Military strategy, logical means predictable - your opponent knows what you’re going to do before you do. Using logic alone makes it very likely you’ll land in the same place as everyone else. In a crowded marketplace, this creates a race to the bottom. Instead, figure out the logic model of your competitors. Find where their use of it is too narrow and exploit this.

When people want to find a new home in London, they typically consider their journey to work and start with the tube map. There are 2 problems with this. Firstly, landlords and estate agents also have the same starting point. Secondly, people forget it’s an engineering schematic and not actually a map. Instead, look for options near overground railways stations – they’re likely to be cheaper and the train will get you into central London just as fast as the tube.

4. The nature of our attention affects the nature of our experience

An experience isn’t just good or bad as a result of how its objectively judged. It also depends on expectations. Filling out a form with your contact details is a drag if you’re completing a tax return, but its quite exciting if you’re applying for a mortgage.

5. A flower is a weed with an advertising budget

In nature, you can see quite a lot of what seems like pointless and inefficient behaviour. However, the extravagance of the display is actually what conveys meaning. If you’re getting engaged, a diamond ring demonstrates you have skin in the game. Similarly, when you’re getting married, you don’t create a Facebook event to invite guests. You send out printed invitations and you make your vows publicly.

When you focus on marcomms as a game of efficiency, you lose sight of a large part of what makes broad reach campaigns work - namely that they’re costly to generate, costly to deliver, and messages are displayed indiscriminately. The evidence points to exactly those things that make campaigns effective. Trying to make something efficient and trying to make something effective are not the same thing. Flowers have evolved this way over 20 million years. We’re still catching up.

6. The problem with logic is that it kills off magic

Albert Einstein was once told by Niels Bohr (Danish physicist, philosopher and Nobel Laureate) “you are not thinking; you are merely being logical”. Once you’ve devised what seems like a logical framework for problem-solving, you’ve created something which is based on very simple rules. Something which will dictate a single right answer. Unfortunately, where logic exists, magic cannot.

If you want to improve a customer’s experience of your brand, logic dictates that you improve the product itself, rather than the perception of the product. For example, if you need to improve profitability at your hotel, McKinsey would tell you to cut unnecessary staff, such as a doorman. However, the presence of a doorman will enable you to charge more per room per night.

People don’t perceive the world objectively and, assuming that they do, means you’ll be confined to improving your product by doing objective things. Context is a marketing superweapon and it works because it works magically.

7. A good guess which stands up to empirical observation is still science. It’s also is a lucky accident.

According to the philosopher Paul Feyerabend, who describes himself as a methodological alchemist, the idea that all worthwhile scientific discoveries have been made by obeying the strict rules of scientific methodology doesn’t hold true. Instead, he supports an ‘anything goes’ type of approach to finding solutions. Why would you let methodological purity restrict the number of solutions you could produce? We’ve got to learn to be more comfortable with progress that arises from happy accidents, which is how penicillin was discovered.

Remember, as Steve Jobs said, to stay hungry and stay foolish. This is a distinguishable feature of successful entrepreneurs who, since they don’t have to defend their reasoning behind every decision, are free to experiment with solutions that are off-limits to others within a corporate setting.

8. Test counterintuitive things, because nobody else will

Some of the most valuable discoveries don’t make sense at first, because if they did, someone would have discovered them already. This is a bit risky, of course - if you have a bonkers idea and it fails, your job may be on the line. Conversely, trying something rational is less risky. However, there can be an extraordinary competitive advantage if you create a small space in your business for people to test things that don’t make sense. The great value of experimenting outside of the rationalists’ comfort zone is that most of your competitors will be too scared to go there.

Consider the iPhone, perhaps the most successful and disruptive product since the Ford Model T. It was not developed in response to consumer demand or extensive focus groups. It was the brainchild of one slightly deranged man, who simply didn’t like buttons. The iPhone shows that if you go a bit mad and experiment, the pearl you find can be a remarkably valuable one.

9. Solving problems using only rationality is like playing golf with only one club

Rationality has its uses, but you improve your thinking by abandoning artificial certainty and learning to consider the peculiarities of human psychology. In other words, if you make assumptions on what’s important to people, you’re basing your conclusions on a very narrow view of human motivation.

For instance, if you are selling a product and you are defining motivation to buy in economic terms, the solution logically boils down to either fining people or bribing people. Those are perfectly worthwhile solutions to behaviour change. Incentives do work. But that’s one golf club among many. There are lots of reasons why people do the things they do, and economic incentives only cover a small part of them.

10. Dare to be trivial

Sherlock Holmes tells us that paying attention to trivial things is not necessarily a waste of time. The most important clues may often seem irrelevant and a lot of life is best understood by observing trivial details. No one complains that Darwin was being trivial in comparing the beaks of finches from one island to another, because his ultimate inferences were so interesting.

Small things, like optimising a call centre script, can have an enormous overall impact. So does simply redefining the same action in different contexts. Typing in your address when you’re filing your tax return or adding your details to a mailing list feels like a waste of time. Doing exactly the same to inform the delivery of a new washing machine feels much more exciting. This is exactly where logical models and the idea of proportionality fail us; we assume that in a rational and mechanistic system big changes in behaviour require big inventions. In a complex system, this is miles away from the truth.

11. If there was a logical answer, we would have already found it

We idolise logic to such an extent that we are blind to its failings. It doesn’t help that rational people are everywhere and control everything, such as in finance team or procurement. When you set logical people the task to solve a persistent problem, you’re more likely to fail. Your problem is likely to be logic-proof, because the solution hasn’t yet been found. There will most likely be a solution, but conventional, linear rationality isn’t going to find it. These are the problems that hamper government decision-making and divide politicians. The reason why the problem persists might just be because no one has been brave enough to try an irrational solution.

12. Dare to look stupid

One of the ways to solve a problem is to ask a question no one has asked before. There are several potential reasons why a specific question hasn’t been asked before. One might be because no one has been clever enough to ask it or, more likely, that no one was stupid enough to ask it. There are copious amounts of questions that will make you sound incredibly dumb, but you should never hesitate to ask them. The only reason they make you sound like an idiot is because there is likely a preconceived, rational answer to that particular question. But, as we’ve seen, rationality is the enemy of alchemy.

We deploy more rigour and structure to our decision-making in business because so much is at stake. However, another potential explanation is that the limitations of a logical approach are what makes it appealing – the last thing people want when faced with a problem is a range of creative solutions with no means of choosing between them other than by subjective judgement. It seems safer to create an artificial model that allows only one solution and claim the decision was driven by the ‘facts’ rather than opinion. What often matters most to those making decisions in business or government is the ability to defend decisions – regardless of their outcome.

Value is relative

We tend to see ‘value’ as synonymous with ‘cost’ and interchangeable with ‘value for money’. In reality, value is entirely subjective and dependent on context. As a result, an intangible change in the positioning of a product can be just as impactful as a physical change and it’s a tried & tested technique.

Frederick the Great ruled the Kingdom of Prussia for approximately half of the 18^th Century. At that time, a failure in wheat crops not only meant famine but also dramatic price rises and inflation. Frederick wanted more farmers to adopt potatoes to keep the cost of living stable. The challenge was that Prussian people thought potatoes were ugly and had a weird taste. So, farmers were reluctant to grow them, as they weren’t valued as much as other produce.

Frederick, a clever marketeer, took a creative approach and effectively re-positioned the potato. He declared that potatoes were exclusively a food for royalty and began to grow them in his garden. His crop was also protected around the clock by his guards, which changed the perceived value of the humble potato almost overnight. So much so that an underground market quickly emerged.

More recently, Behavioural Economics research has explained how the value of something is often determined by how it is framed. For example, in Italy (infamous for aggressive drivers) points are deducted from your driving license rather than added as “penalty points”. They’ve found that loss aversion is a more powerful influence on behavior than deterrent.

Framing also works in the wine industry. Surprisingly, there is no correlation between quality and enjoyment of wine except when you’re told the cost.

In Marketing, Professor Mark Ritson (of Marketing Week fame) laments the era of ”Communification” where our role has gone from “listening to customers and responding in a way that offers a meaningful solution to them” to being ‘framed’ and ‘valued’ by tangible outputs, i.e. campaigns.

At Graymatter, we work hard to ensure our clients don’t all get the same answer but benefit from a tailor-made answer that results from many options being considered. Our process starts with a rigorous diagnosis before we get into tactics. Yes, we have a large creative team, but we also offer clients creativity in its boldest sense which might be in the form of smart technology or the right data to make our clients’ brands more meaningful and deliver results.

For that reason, we’re inspired as much by amateurs, such as Frederick the Great, as we are by iconic advertising figures, such as Bill Bernbach and John Webster.

Ecosystems, experiments and experience

Earlier this year, Microsoft briefly joined the likes of Amazon and Apple as a member of a very select group of businesses – ones who have cracked the trillion-dollar milestone. Yes, all 3 are technology businesses, but, aside from valuation, what else have they got in common?

In short, they also operate as ecosystems with at least as much more effort focused on the experience of existing customers as is invested into acquiring new ones. An approach which flies in the face of Byron Sharp’s “How Brands Grow”.

Jeff Bezos summarises Amazon’s successful model by saying: ““In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts.”

How do they act like an ecosystem? They’re constantly testing new things, learning from customers, striving to improve and adding to their breadth to their proposition to make it even stickier.

According to Tren Griffin at Microsoft, "The balance of power is shifting toward customers and away from companies. The right way to respond to this is to put the vast majority of your energy, attention and dollars into building a great product or service. The very best businesses acquire customers ‘organically’... word of mouth drives sales at these companies.”

Despite his private equity fund background, Griffin has a simple but risky point of view: “If you double the number of experiments you do per year, you’re going to double your inventiveness. If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table."

Experiments, by definition, can fail. You can reduce your exposure to failure by cutting down on the number of experiments. However, if you are taking inspiration from these trillion-dollar companies, you might consider that a bigger problem might be to fail to experiment, rather than to experiment and experience failure.

To quote Griffin once again, “you must adopt a non-consensus view and be right about that view to beat competitors."

BEHAVIOURAL SCIENCE TERMS USED IN EVERYDAY MARKETING CONTEXTS

Every day we read in the marketing press about brands seeking influencers to help promote their products or see friends making irrational choices or, perhaps, ads working subliminally to shape our own behaviour. However, we rarely take a step back and look at the underlying mechanisms that make creative work actually work.

Though it might not be your first instinct to put clunky sounding psych principles like “cognitive dissonance” into a document, incorporating these concepts into your marketing toolbox could help with the challenge of influencing your customers.

Behavioural Science investigates the drivers of human behaviour and processes involved in decision-making. Here are 3 behavioural science terms you may have heard mentioned recently:-

1. Cognitive Dissonance

This phenomenon partially explains why the tobacco industry is still alive and, relatively, well. Despite the stark health warnings on packets of cigarettes, people still smoke. ‘Cognitive Dissonance’ refers to our tendency to strive for consistency between our behaviours and attitudes. When confronted with information that doesn’t align with our behaviours, we experience unease and are motivated to engage in certain activities to restore ‘consonance’. For example, when a chain-smoker sees an anti-smoking ad, they acknowledge the potentially fatal effects of their behaviour and recognise the need to quit. However, if they are addicted, changing this deep-rooted behaviour requires immense effort and discomfort. Therefore, they would internally rationalise their smoking by asserting, “smoking is unlikely to kill me because I know plenty of elderly smokers”. Customers are most likely to encounter cognitive dissonance when making high-stakes purchases, such as cars, homes or holidays. In order to ease feelings of anxiety and regret, we can can use customer testimonials to affirm and justify a purchase decision.

2. Heuristics

Heuristics are the mental short-cuts that facilitate simple decision-making. During the purchase process, heuristics reduce a customer’s ‘cognitive load’ (see below) by reverting to a familiar brand or product preference.

3. Cognitive Load

Do you make smart purchasing decisions when you’re stressed out or distracted? No, me neither. Studies have shown that a customer’s cognitive load, or the amount mental effort being used by the cognitive processing, impacts how information is evaluated (Dewitte et al., 2005). Those with heavy cognitive loads (e.g. a new mother shopping with a screaming baby), process information in a very shallow way. They are more likely to revert to quick choices or heuristics that require little cognitive effort. However, when customer is in a state of cognitive ease, they are more likely to consciously mull over product information and pay attention to rational marketing messages.

“Everyone has a plan until they get punched in the mouth”

At the height of his career, Mike Tyson was the most dominating boxer the world had ever seen. Until he wasn’t. Eventually he got cocky, cut corners in his training and, in a championship fight against Buster Douglas, he got repeated punched in the mouth. After Douglas defeated him, Tyson was never quite the same. Potential opponents were no longer afraid of him and realised he could be beaten. He knew it too.

The interesting thing about Tyson’s mis-quote of Sun Tzu is that it suggests even he (renowned for not being the sharpest knife in the drawer intellectually) is that it suggests he’d taken part in a discussion on the important of planning and difference between Strategy and Tactics.

Another famous military quote (author unknown) is that the “perfect tactical plan is like a unicorn because anyone can tell you what it looks like, but no one has ever seen one”. Eisenhower built on this premise when he said 'in my experience plans are almost always useless, but planning is essential.' The upfront effort enables a more informed approach to be taken when your plan needs to adapt to the situation, rather than a reaction being forced upon you.

If your approach to 2020 planning will mainly comprise collecting tactical requests from stakeholders across the business, here are some thoughts on how to take a more informed approach in the absence of an overarching strategy:-

·         Ask what impact each of these initiatives will have and then explore how much time and budget each is likely to consumer

·         Is there an internal governance forum where a framework could be agreed for projects that won’t be supported? For example, where the contribution towards business objectives cannot be measured

·         Are there agreed priorities or ‘brand jobs to be done’ for marketing? If so, would these initiatives contribute towards them?

·         Are there priority segments? If so, would these initiatives engage them?

If you’re unclear on the difference between Strategy and Tactics, here are a couple of quick ‘rules of thumb’:-

·         They operate on different schedules - strategy is an occasional activity whereas tactical planning is ongoing

·         Strategy focuses on the problem you’re trying to solve and the best possible direction of travel to solve it

·         Strategy also focuses on who you’re talking to (your priority audiences) and what you need to say to influence them (how their needs compare to the product you’re selling)

·         Tactics are much more focused on how you’ll engage your audience and also when & where

Planning and the race to the bottom

In 1911, British explorer Robert Falcon Scott and Norwegian explorer Roald Amundsen went head to head for the honour of being the first man to reach the South Pole. It proved to be a dramatic journey for both of them – ending in victory for Amundsen and tragedy for Scott.

They set off within days of each other. Scott with experience on his side – he’d attempted to reach the South Pole before but had been forced to turn back due to the sub-zero conditions. It was always Scott’s intention to return and, with the support of the British Admiralty and the government, he secured a grant of £20,000. Scott recruited men from his previous voyage and from Ernest Shackleton’s ship Nimrod, which had recently returned from the Antarctic.

Amundsen was a respected explorer and was determined to beat the Brits. He had been preparing for years and kept his plans secret. Amundsen had undergone an intensive and long-term fitness regime, including travelling from Norway to Spain by bicycle. He planned for extreme scenarios and his studies of the Inuit people yielded actionable insights, such as the need to move slowly in cold conditions so sweat wouldn’t form inside your clothing and turn to ice.

Amundsen had also learned that dogs can thrive in sub-zero conditions and spent time with the Inuits in northern Canada learning to dogsled. Meanwhile, Scott travelled with a team of ponies, which were entirely unsuited to the sub-zero conditions, and also motor sledges, which were untested and quickly failed. The Amundsen party ran their teams of dogs to the pole and back, while Scott’s team pulled their sledges themselves – the Brits faced the tortuous journey with stoicism and dignity, but moved far more slowly and exhausted themselves in the process.

Amundsen laid down emergency supply caches along the route and marked them with highly-visible black flags. The Norwegians stored three tons of supplies for five men. In contrast, Scott stored one ton for 17 men. Amundsen insisted on carrying extra supplies in case they missed every one of his supply caches, so that they could still complete the journey.

Amundsen also brought four thermometers. Scott brought just the one, which soon broke. While both men knew there was no way to mitigate all of the risks involved, the Norwegian stress-tested his plans and prepared for the worst. In contrast, Scott appears to have been more reliant on good fortune and one of his final diary entries complains about bad luck.

On 15 December 1911, Amundsen and his team planted the Norwegian flag at the South Pole having reached it reached it on the day they’d planned. At that time, Scott’s expedition was still 360 miles away. Weak from exhaustion, hunger and extreme cold, Scott’s last diary entry is dated 29 March 1912. Sadly, he died in his tent along with two of his men.

It’s a tragic tale, but also a cautionary one especially for those of us starting to consider what next year’s plan looks like. We must remember to start with the problem we’re trying to solve and exploring the best direction of travel before prioritising tactical activities and allocating budgets.