Wednesday, September 21, 2016

SMORC model - Why people cheat?

In his book "The Honest Truth about Dishonesty", author Dan Ariely writes about the Psychology of Dishonesty. Why are people dishonest? Why do people cheat? Is it for reward?

He feels that most of us are inherently dishonest at some level and more than reward we weigh the pros and cons of getting caught.

Weighing the cost benefit analysis is more important than the consideration of right or wrong.

One simple example is about Parking in a no Parking zone. How often have all of us done this? If we have to rush for a meeting, we weigh the costs of getting a parking ticket versus costs of going late for a meeting. It's not about right or wrong.

He created this model called SMORC - Simple model of Rational Crime.

In some of the experiments that Dan conducted, he found that incentive for crime was not a motivation. However the risk of not getting caught was the real driver in such cases.

In this video below, Dan speaks about his SMORC model and some case studies.

This article from dwells into the puzzling case of the Wells Fargo scandal where 5,300 employees were sacked for committing fraud.

Tuesday, September 20, 2016

Color Psychology - The hunt for the world's ugliest color

What is the effect of color on our Behavior?

The Australian government hired a research agency to find out what is the world's ugliest color and they came up with Pantone 448C. 

The purpose of this activity was to color cigarette products with this colour to dissuade people from smoking. Check this video below

Monday, September 19, 2016

A site to check if you logo looks like a genital!!

A site has has been launched which checks if your logo looks like a Genital!!

How many of us have seen logos which have made us wonder what exactly was the designer thinking. Take a look at this one below

The site was started by Denver Designer Josh Mishell who saw some (probably unintended) genitalia on a beer coaster at a local brewery startup. He posted the photo online. While many people thought the photo was funny, a few concerned friends pointed out that he should do something constructive with his time, instead of just pointing out the hilarity of these unexpected genitals in design.

He says that when you’ve been looking at your own design too much, it’s easy to miss simple signs that your logo has some hidden genitals in it.

For a $25 design fee you can upload your logo and they'll investigate and inform if you there is even a hint of genitals in your logo.

Some of the funny examples shown on the site are

Pink color lowers Heart rate and reduces aggression

Drunk Tank Pink is a tone of pink claimed to reduce hostile, violent or aggressive behavior.

In the late 1960s, Alexander Schauss, Director of Life Sciences at the American Institute for Biosocial Research in Tacoma, Washington, did studies on psychological and physiological responses to the color pink. Schauss had read studies by the Swiss psychiatrist Max Luscher, who believed that color preferences provided clues about one's personality. Luscher noticed that color preferences shifted according to psychological and physiological fluctuations in his patients. Luscher asserted that color choice reflects emotional states. He theorized that one's color choices reflect corresponding changes in the endocrine system, which produces hormones.

In early tests in 1978, Schauss observed that color, surprisingly, did affect muscle strength, either invigorating or enervating the subject, and even influenced the cardiovascular system. Schauss began to experiment on himself, with the help of his research assistant John Ott. Amazingly, he discovered that a particular shade of pink had the most profound effect. He labeled this tone of pink P-618. Schauss noted that by merely staring at an 18 × 24 inch card printed with this color, especially after exercising, there would result "a marked effect on lowering the heart rate, pulse and respiration as compared to other colors."

In 1979, Schauss managed to convince the directors of a Naval correctional institute in Seattle, Washington to paint some prison confinement cells pink in order to determine the effects this might have on prisoners. Schauss named the color after the Naval correctional institute directors, Baker and Miller. Baker-Miller Pink is now the official name of the paint whose color has the following RGB code: R: 255, G: 145, B: 175.
At the correctional facility, the rates of assault before and after the interior was painted pink were monitored. According to the Navy's report, "Since the initiation of this procedure on 1 March 1979, there have been no incidents of erratic or hostile behavior during the initial phase of confinement". Only fifteen minutes of exposure was enough to ensure that the potential for violent or aggressive behavior had been reduced, the report observed

src Wiki

Also read the book - Drunk Tank Pink

In this interview the author talks about how the University of Iowa's famous football coach Hayden Fry was a psychology major before he got into coaching. And he had the visitors' locker room painted drunk tank pink at Iowa, and to this day it remains somewhat of a part of his legacy that he did this, and Bo Schembechler from Michigan used to cover the walls with newspaper to avoid the psychological effects of it on the football teams.

In one experiment with Mr. California, who was a weightlifter, and he was lifting very heavy weight quite comfortably. As soon as they held up this pink cardboard in front of him, he couldn't lift it anymore. And to snap him out of it, they had to show him a blue piece of cardboard, which undid the effect.

Social proof

Social proof, also known as informational social influence, is a psychological phenomenon where people assume the actions of others in an attempt to reflect correct behavior for a given situation. This effect is prominent in ambiguous social situations where people are unable to determine the appropriate mode of behavior, and is driven by the assumption that surrounding people possess more knowledge about the situation. src Wiki

The most famous study of social proof is Muzafer Sherif's 1935 experiment. In this experiment subjects were placed in a dark room and asked to look at a dot of light about 15 feet away. They were then asked how much, in inches, the dot of light was moving. 

In reality it was not moving at all, but due to the autokinetic effect it appeared to move. 

How much the light appears to move varies from person to person but is generally consistent over time for each individual. A few days later a second part of the experiment was conducted. Each subject was paired with two other subjects and asked to give their estimate of how much the light was moving out loud. Even though the subjects had previously given different estimates, the groups would come to a common estimate. To rule out the possibility that the subjects were simply giving the group answer to avoid looking foolish while still believing their original estimate was correct, Sherif had the subjects judge the lights again by themselves after doing so in the group. They maintained the group's judgment. Because the movement of the light is ambiguous the participants were relying on each other to define reality.

In 1951, Solomon Aisch conducted his confirmity lab experiments. Groups of 8 students particpated in a perceptual task. 7 of the 9 people were actors and only one was the true subject of the experiment

Each participant viewed a card with a line on it followed by another with 3 lines labeled as A, B and C. One of these lines were the same as that on the first card. 

In the trials, the actors were at times told to give the correct answer and at times all of them would give an incorrect answer.

The subject was also tested alone with none of the other participants.

It was observed that when in a group, in 1/3 of the cases the participants were swayed by the group's wrong answers.

Less is Good

Dieter Rams is a German industrial designer closely associated with the consumer products company Braun and the Functionalist school of industrial design. His unobtrusive approach and belief in "less but better" design generated a timeless quality in his products and have influenced the design of many products, which also secured Rams worldwide recognition and appreciation. src wiki

When he was a young engineer at Braun, he was asked to be a part of the team that was working on a record player. That was the era of the Turntable record players which was covered in solid wood. He instead went on to create a clutter free design by removing the inessentials and covered it with a plastic cover. 

It was so revolutionary at that time that people didnt know what to make of it and it even gained the nickname "Snow White's coffin" because it resembled the Disney princess' transparent sleeping chamber.

But over a period of time, this started becoming the design norm.

Source - 

Friday, September 16, 2016

Schumpters Gale - Creative Destruction

Schumpeter's gale, is a concept in economics which since the 1950s has become most readily identified with the Austrian American economist Joseph Schumpeter who derived it from the work of Karl Marx and popularized it as a theory of economic innovation and the business cycle. src Wiki

The "gale of creative destruction" describes the "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one".

Companies that once revolutionized and dominated new industries – for example, Xerox in copiers or Polaroid in instant photography – have seen their profits fall and their dominance vanish as rivals launched improved designs or cut manufacturing costs.

In technology, the cassette tape replaced the 8-track, only to be replaced in turn by the compact disc, which was undercut by downloads to MP3 players, which is now being usurped by web-based streaming services.

Companies which made money out of technology which becomes obsolete do not necessarily adapt well to the business environment created by the new technologies.

Online ad-supported news sites such as The Huffington Post are leading to creative destruction of the traditional newspaper. The Christian Science Monitor announced in January 2009 that it would no longer continue to publish a daily paper edition, but would be available online daily and provide a weekly print edition. The Seattle Post-Intelligencer became online-only in March 2009.

For half a century, until Johnson & Johnson introduced Tylenol, Bayer Aspirin drove the growth of Sterling Drug. Out of fear of cannibalizing its Bayer Aspirin leadership, Sterling Drug refused to introduce its leading European nonaspirin pain reliever (Panadol) to the United States. Instead, it tried to expand its Bayer line overseas but failed.

This failure ultimately led to its acquisition by Eastman Kodak. Sterling Drug had become immobilized, unable to change its half-century-old behavior out of fear. Its strong culture—its rules of thumb for decision making, its control processes, the information it used for decision making—blocked its progress and ultimately sealed its fate. It had locked itself into an ineffective approach to the marketplace despite clear signs that it needed to act in a new way.

src Mckinsey

Digital innovation at Dominos

Dominos has been at the forefront of Digital innovation through their initiatives in making their ordering as idiot proof as possible.

1. Zero click ordering
Just open Dominos Zero click app on your phone and after a 10 second count down the app will automatically place your order for the same pizza you bought the last time.

2. Order with an Emoji
Just text a Pizza Emoji and get your order

3. Tweet an order
Just tweet #Dominos #pizza and get your pizza

Thursday, September 15, 2016

MIE - Minimally Invasive Education - How a Girl from a remote Mexican slum won the All Mexico Math exam

How a Girl from a remote Mexican slum won the All Mexico Math exam using the MIE method.

Minimally invasive education (MIE) is a form of learning in which children operate in unsupervised environments. The methodology arose from an experiment done by Sugata Mitra while at NIIT in 1999, often called The Hole in the Wall

On 26 January 1999, Mitra's team carved a "hole in the wall" that separated the NIIT premises from the adjoining slum in Kalkaji, New Delhi. Through this hole, a freely accessible computer was put up for use. This computer proved to be popular among the slum children. With no prior experience, the children learned to use the computer on their own. This prompted Mitra to propose the following hypothesis: The acquisition of basic computing skills by any set of children can be achieved through incidental learning provided the learners are given access to a suitable computing facility, with entertaining and motivating content and some minimal (human) guidance.

Mitra explains how they saw to it that the computer in this experiment was accessible to children only "... We placed the computers 3 feet off the ground and put a shade on top, so if you are tall, you hit your head on it. Then we put a protective plastic cowl over the keyboard which had an opening such that small hands would go in. Then we put a seating rod in front that was close to the wall so that, if you are of adult height, your legs would splay when you sit. Then we painted the whole thing in bright colours and put a sign saying 'for children under 15'. Those design factors prevented adult access to a very large extent."

In 2013, a Mexican girl from a slum won the all Mexico Math exam. Her teacher Sergio Juárez Correa, 32, employs a “minimally invasive education" concept pioneered by Sugata Mitra, a professor of educational technology at Britain's Newcastle University. This technique lets students tap into their own curiosity and self-learning to solve problems.

Under this system, Juárez Correa saw his students’ scores in Spanish and math skyrocket, with nine other students scoring over 900 in the math section of the standardized test. src Fox News

Wednesday, September 14, 2016

Goldilocks effect

The Goldilocks principle is derived from a children's story "The Three Bears" in which a little girl named Goldilocks finds a house owned by three bears. Each bear has its own preference of food and beds. After testing all three examples of both items, Goldilocks determines that one of them is always too much in one extreme (too hot or too large), one is too much in the opposite extreme (too cold or too small), and one is "just right".

The Goldilocks principle states that in a given sample, there may be entities belonging to extremes, but there will always be an entity belonging to the average. Or in other words, in a sample, there will always be a U-shaped distribution. When the effects of the principle are observed, it is known as the Goldilocks effect. src wiki

In economics, a Goldilocks economy sustains moderate economic growth and low inflation, which allows a market-friendly monetary policy. A Goldilocks market occurs when the price of commodities sits between a bear market and a bull market. Goldilocks pricing is a marketing strategy that, although not directly related to the Goldilocks principle, uses product differentiation to offer three versions of a product to corner different parts of the market: a high-end version, a middle version and a low-end version.

James Clear defines the principle as

The Goldilocks Rule states that humans experience peak motivation when working on tasks that are right on the edge of their current abilities. Not too hard. Not too easy. Just right.

He gives an example of playing a game of Tennis. If we were to play against a child then we would be bored because of the easy opponent. At the other extreme if we were to play against a champion we would be demoralised into submission. However, we would love to play a game against an equal thus making the game more interesting and challenging for us.

Another example in this article is his observation about comedian Steve Martin's career. He realised his love for comedy at the age 10 and by age 28 he was a superstar. The secret of his success was that he would improve his comedy routines in small steps. Every year he would add just a minute or two to his routine thus keeping him motivated and managing the risks. He says it took him 10 years learning, 4 years refining and 4 years of wild success.

This HBR article however speaks of an aberration when 2 men are paired together to take decisions.

Marketers have long known that, when given a set of choices, individuals tend to choose the middle ground, the compromise option.

In a research involving more than 1200 participants, people were paired male - male, male - female and female - female.

The participants were asked to make a series of choices, where they could select either extreme items in a set (for example, a restaurant that was very expensive but had a very short wait time, or was very inexpensive and had a very long wait time) or moderate “compromise” alternatives (both price and wait time fall between the two extremes)

It was found that
1. Women always preferred the middle option whether alone or in pairs.
2. Pairs of men always chose the extreme options far more than single men or men - women pairs

One example that was cited was that if a father son pair went to buy a car, they were more likely to choose either fuel efficiency or one offering better interior design.

The complete research can be found here.

Tuesday, September 13, 2016

Thinking out of the Box - How a Ball point manufacturer became a market leader in razors and lighters

In his book Thinking in New Boxes, author Luc speaks about a case of how BIC, manufacturers of Ball point pens, got into Lighter manufacturing and disposable razors business.

BIC started as a stationery company and purveyor of popular low-cost ballpoint pens. Business was healthy, but BIC wanted to grow. Had BIC thought of itself as a “pen” company, it might have focused solely on expanding its range of pens with new colors, new sizes, and new price points.

But one executive perceived a new box. BIC was not in the pen business, it was in the “inexpensive disposable plastic items” business. With this breakthrough change to a different box, the company opened its eyes to a host of new opportunities—disposable lighters, razors, and even precharged mobile phones. BIC and its sales soared.

BIC launched its first disposable lighters in 1973 and its first disposable shavers in 1975 eventually becoming the global market leader in pocket lighters and number 2 position globally for one piece shavers.

Costa Rica has run for 113 days on renewable energy

Costa Rica has managed to run on renewable energy for 113 days straight. In 2015 it relied on nothing but renewables for 285 days of the year. In total, Costa Rica provided 99% of its energy needs last year with renewables alone.

The majority of this power comes from hydroelectric plants. Costa Rica is also diversifying with ventures in geothermal energy and solar.

Source: FastCo

Monday, September 12, 2016

When Leaders hire junior mentors

In the 1990s, when Jack Welch faced some tough decisions about how to exploit the Internet, he chose experience as a solution to the biases he might have.

He hired a personal Internet mentor who was more than 25 years his junior and encouraged his top managers to do the same.

Warren Buffett recommends extra challenge as a solution to biases that arise during acquisitions. Whenever a company is paying part of the price with shares, he proposes using an “adviser against the deal,” who would be compensated well only if it did not go through.

Self Awareness - The most important trait of a Leader

When the 75 members of Stanford Graduate School of Business’s Advisory Council were asked to recommend the most important capability for leaders to develop, their answer was nearly unanimous: self-awareness.

src HBR article

Also read about Vasella, CEO of Novartis who built an entirely new Novartis culture centered on compassion, competence, and competition. He did this because of his health issues during his childhood and the trauma he went through during his treatments.

When he was 8 years old, he still remembers the pain and fear when the nurses held him down during the lumbar punctures to prevent him from moving. One day, a new physician arrived and took time to explain each step of the procedure. Vasella asked the doctor if he could hold a nurse’s hand instead of being held down. Vasella recalls “The amazing thing is that this time the procedure didn’t hurt,”. “Afterward, the doctor asked me, ‘How was that?’ I reached up and gave him a big hug. These human gestures of forgiveness, caring, and compassion made a deep impression on me and on the kind of person I wanted to become.”

Time Management Analysis - Tracking every minute for 2 days

Debbie Good, clinical assistant professor of business at the University of Pittsburgh’s Katz Graduate School of Business, teaches time management to her MBA students.

She has them account for every minute of two full days in 15-minute increments. Many are surprised at how long they really spend on certain tasks, she says. You might think you’re only checking social media for 15 minutes, but it may be four or five times that long.

Write down to look at how long you’re spending on the things you do each day, she says. Once you have a good sense of how long various tasks take, you might even note those amounts on your list to help you track how much you’re trying to cram into your day, she says.

Source - Fast Company

The 100 year old Ivy Lee Method of Task Management

Ivy Lee was a PR consultant in the early part of the 20th century. In 1918, Charles Schwab, President of Bethlehem Steel invited Lee to help him increase productivity and efficiency in his organization.

Lee reportedly told him that he needed 15 mins with each of his executives and if things work out after 3 months he could pay him whatever he felt it was worth.

During his 15 mins with each executive, he outlined a simple method.

1. At the end of every day write down not more than 6 important things you need to do tomorrow.
2. Prioritize them in order of importance
3. Next morning focus only on the first task. Complete the first before moving to the next.
4. At EOD, move unfinished items to a new list of 6 tasks for the next day
5. Repeat daily

After 3 months Schwab was so happy with the outcome that he sent him a cheque of $25,000.

Source : Fast company

Sunday, September 11, 2016

Tough Performance Goals leads to cheating

In this HBR article an experiment was conducted with 2 groups of people. Both groups were given the same Anagram task.

However, Group 1 was given a specific performance goal of forming atleast 9 words whereas Group 2 was only told to do their best.

It was found that Group 1 were more likely to overstate their performance than Group 2 who were only told to do their best.

Monday, May 9, 2016

Reinheitsgebot, Germany’s 500 year old Beer purity law

Stamp celebrating the history of the Reinheitsgebot.

The Reinheitsgebot  (literally "purity order"), sometimes called the "German Beer Purity Law", is the collective name for a series of regulations limiting the ingredients in beer in Germany src Wiki

Five hundred years ago, on April 23, 1516, two Bavarian dukes enacted the law. “In all cities and markets and in the countryside,” the Reinheitsgebot reads, “only barley, hops, and water may be used for brewing beer.” (Yeast was added to the law later, after Louis Pasteur discovered what was doing the fermenting.)  src HBR

The text of the 1516 Bavarian law is as follows:
We hereby proclaim and decree, by Authority of our Province, that henceforth in the Duchy of Bavaria, in the country as well as in the cities and marketplaces, the following rules apply to the sale of beer:
From Michaelmas to Georgi, the price for one Mass [Bavarian Liter 1,069] or one Kopf [bowl-shaped container for fluids, not quite one Mass], is not to exceed one Pfennig Munich value, and
From Georgi to Michaelmas, the Mass shall not be sold for more than two Pfennig of the same value, the Kopf not more than three Heller [Heller usually one-half Pfennig].
If this not be adhered to, the punishment stated below shall be administered.
Should any person brew, or otherwise have, other beer than March beer, it is not to be sold any higher than one Pfennig per Mass.
Furthermore, we wish to emphasize that in future in all cities, market-towns and in the country, the only ingredients used for the brewing of beer must be Barley, Hops and Water. Whosoever knowingly disregards or transgresses upon this ordinance, shall be punished by the Court authorities' confiscating such barrels of beer, without fail.
Should, however, an innkeeper in the country, city or market-towns buy two or three pails of beer (containing 60 Mass) and sell it again to the common peasantry, he alone shall be permitted to charge one Heller more for the Mass or the Kopf, than mentioned above. Furthermore, should there arise a scarcity and subsequent price increase of the barley (also considering that the times of harvest differ, due to location), WE, the Bavarian Duchy, shall have the right to order curtailments for the good of all concerned.
— Bavarian Reinheitsgebot of 1516 (emphasis added), Eden, Karl J. (1993)
The Bavarian order of 1516 was introduced in part to prevent price competition with bakers for wheat and rye. The restriction of grains to barley was meant to ensure the availability of affordable bread, as wheat and rye were reserved for use by bakers. It has also been argued that the rule had a protectionist role, as beers from Northern Germany often contained additives that were not present in Bavarian beer.

Five hundred years ago, on April 23, 1516, two Bavarian dukes enacted the law. “In all cities and markets and in the countryside,” the Reinheitsgebot reads, “only barley, hops, and water may be used for brewing beer.” (Yeast was added to the law later, after Louis Pasteur discovered what was doing the fermenting.) src HBR

3+1 feedback model - 3 positive to 1 need for improvement

Why is Feedback only synonymous with Negative? Why do we give only Negative Feedback?

It's very common to see people get very defensive when someone gives a feedback which is perceived as Negative. One tends to lockdown and get into a counter offensive mode whenever such feedback is given. This very often results in promoting a culture where people don't openly discuss issues.

This author,Sonia Di Maulo proposes a 3+1 feedback model. For every One opportunity for improvement, 3 positives need to be highlighted first.

They key to the 3 positives is

  • It builds Trust and Collaboration
  • It increases engagement

Wednesday, March 23, 2016

Freedom vs Control - case study of 2 Nike factories in Mexico

MIT's Richard Locke researched 2 Nike tshirt factories in Mexico.

These two factories have many similarities - both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct.

Plant 1 gave workers complete freedom to decide production targets, team organization and managing production plants and schedule. Employees work in teams and are also responsible for routine maintenance of equipment. Jobs are rotated and they value knowing how to perform a variety of operations and claimed that this opportunity to work on several operations plus in teams significantly improved working conditions. Every morning, the supervisors communicate to each team the style and quantity of products they need to produce. The workers would get together and discuss amongst themselves how much they can actually produce and then meet with the supervisor and agree on the production target for the day. Tthe opportunity to participate in decisions related to work process had a strong and positive effect on work climate

Plant 2 was a tightly controlled unit with set rules and workers assigned fixed jobs and responsibilities. Workers are in fixed, individual stations, are specialized in narrowly defined jobs, which is routinized and repetitive and thus perform the same operation over the whole year. The workers were also not motivated to acquire new skills or perform a variety of operations. The production orders are communicated from the top of the plant’s hierarchy and there is no place for worker participation. The plant manager plans production and distributes the orders to the area supervisors.

The research showed that Plant 1 was more productive churning out 150 tshirts a day compared to Plant 2 which was producing 120 Tshirts a day

Read the entire research here

Tuesday, March 22, 2016

Google rejected Instagram founder Kevin Systrom from its APM programme

Kevin Systrom worked in Google for 3 years before quitting and eventually co founding Instagram which was acquired by Facebook for a billion dollars.

In his book "How Google Works", Eric Schmidt writes about this incident. Salar Kamangar was very impressed with young Kevin who was a marketing associate and wanted to transfer him to the Elite APM program (Associate Product Manager).

He was however rejected because the programme only accepted candidates with a computer science degree. Even though Kevin was a self taught programmer and had a history of working with engineers he wasn't allowed into the programme.

Read the book

Race and Gender diversity is good for Business

In this study by Sociologist Cedric Herring, he found an association between Diverse workforce and increased corporate profits and earnings. This is in contrast to other accounts that view diversity as either nonconsequential to business success or actually detrimental by creating conflict, undermining cohesion, and thus decreasing productivity.

This research tests eight hypotheses derived from the value-in-diversity thesis. The results support seven of these hypotheses: Racial diversity is associated with increased sales revenue, more customers, greater market share, and greater relative profits. Gender diversity is associated with increased sales revenue, more customers, and greater relative profits.

 The value-in-diversity perspective makes the business case for diversity, arguing that a diverse workforce, relative to a homogeneous one, produces better business results. Diversity is thus good for business because it offers a direct return on investment, promising greater corporate profits and earnings.

A paradoxical view suggests that greater diversity is associated with more group conflict and better business performance. This is possible because diverse groups are more prone to conflict, but conflict forces them to go beyond the easy solutions common in like-minded groups. Diversity leads to contestation of different ideas, more creativity, and superior solutions to problems. In contrast, homogeneity may lead to greater group cohesion but less adaptability and innovation.

Facebook rejected Whatsapp cofounders job application in 2009

WhatsApp co founder Brian Acton had applied for a job at Facebook in 2009 but was rejected. He had posted this sad tweet "Facebook turned me down. It was a great opportunity to connect with some fantastic people. Looking forward to life's next adventure."

Here's the link to the tweet

He eventually sold his company WhatsApp to Facebook for a whopping $19 billion

Monday, March 21, 2016

Listening to Problems followed by a Solution results in a Positive ruboff

In this research, the team found that just 3 minutes of Negative news in the morning can lead to a 27% higher likelihood of you having a bad day. The negative news in the morning can set the trend for the day.

One group was exposed to Negative News and another was exposed to Negative News with a solution focus. Individuals who watched just three minutes of negative news in the morning had a whopping 27% greater likelihood of reporting their day as unhappy six to eight hours later compared to the positive condition.

The article however also proposed another theory. When exposed to a Problem followed by a solution, the mood significantly changed. Participants were found to be less hostile than those only exposed to the problems.

Also read Consuming Negative News can make you less Effective at Work

Tuesday, March 15, 2016

Using Round figures in Negotiations may be disadvantageous

In this Harvard Research paper on "Initial Offer Precision and M&A Outcomes", the researchers put forward evidence to show that the maker of the first offer may be able to further tilt the bargaining game to her advantage by expressing the offer price in precise terms. For example, a list price of $1,020,000 is more informative and likely to lead to a smaller price adjustment than a list price of $1,000,000.

In another example, he states that a bid for $10.20 per share leaves the impression that the bidder is less likely to revise the bid significantly upward than a bid for $10.00 per share.

Some of the reasons are
1. Competing bidders may view precise offers as more informed, and, perhaps because of the winner’s curse, may not wish to enter a bidding contest against an ostensibly more informed bidder
2. Targets may interpret precise offers as evidence that the acquirer is informed and knows what it is doing.
3.  Targets may be more willing to close the deal with a party they consider competent

Managing Disagreements - If you don't like my idea you don't like me

Anthony Schuman, a health services researcher, has published a paper on Human relationships. Through his teaching and writing (more than 90 articles and book chapters and the book “Partnerships in Healthcare: Transforming Relational Process”) he has become a leading proponent of a partnership-based clinical approach known as Relationship-Centered Care. His work focuses on organizational change and how people can work together more effectively across all levels of healthcare.

When people disagree at work, it is often misinterpreted as a personal attack. The standard reaction is that " If you like my idea, you like me, if not, you don't like me"  src HBR

Suchman recommends using a series of Relationship building statements represented in the Acronym  PEARLS. src

            We’ll see this through together
            I really want to work on this with you 
            It sounds like that was frightening for you
            I can sense your sadness
            Great – I can see how happy that made you
            You put a lot of work into this.
            You did the right thing
            I so respect your knowledge
            I’ve always appreciated your ability to stay focused in a crisis
            This would be hard for anyone
            Who wouldn’t be worried about something like this?
            I’d like to help you with this
            I want to see you succeed

Monday, March 14, 2016

How a Toll strike revealed that the Toll collectors were stealing money

This NYTimes story cites a very interesting case of a Toll collector strike in England. During the strike drivers were just asked to put the toll money into a collection box. Surprisingly the government collected more told money during the strike. This indicates that the drivers were fairly honest but also indicated that the Toll collectors had been stealing a lot of money.

The Bagel story and Dishonesty

Paul Feldman, an Economist, was a Director research at a firm. He used to love Bagels and carried a few extra for his colleagues at work. Soon employees from the neighboring floors heard about it and they would want some too. So, he started bringing more bagels to work and would leave out a cash basket to recover his costs. His collection rate was about 95%.

After a point of time people would refer to him as the Bagel man instead of his fancy Director Research position.

Soon he quit his job and decided to get into the Bagel business. He drove around offices delivering Bagels early in the morning and would leave a cash basket in the company's snack room. He would return around Lunch and pick up the money and leftovers. It was an honor system. Within a few years he was delivering around 10,000 bagels a week to 140 offices.

He also inadvertently designed a beautiful economic experiment. By measuring the amount of money collected he could tell how honest his customers were. On the basis of this he could characterize a company and predict White Collar crime.

Some of his insights were
  • If payments is 90% or more then the company is honest
  • After Sept 11 terror attack, the collection rate iAs mproved by 2%. It may represent a surge in empathy.
  • Initially he left open cash baskets, but money would get stolen. Later he setup wooden money boxes with a slot. Of the 7000 cash boxes only one box got stolen.
  • People who steal his bagels never stoop to steal his money.
  • Telecom companies have robbed him
  • It also isn't worth the effort delivering to Law firms
  • Employees further up the corporate ladder cheat more than those down below.
  • Places where security clearance was required for an individual to have a job weren't that honest.
  • In places where people like their bosses, payment rate is high
  • Smaller offices with a few dozen employees have high payment rates than offices with a few hundred employees.
  • As unemployment rate goes down dishonesty goes up.
  • Payment rate doesn't change with increase in Bagel prices.
  • Unreasonably Pleasant weather makes people pay a higher rate.
  • Unseasonably cold weather makes people cheat
  • Holidays like Christmas week produces a 2 percent drop in payment.

Tuesday, March 8, 2016

What do you want in a Logo? - The pleasure of recognition and promise of meaning

Paul Rand defined the Logo as "The pleasure of recognition and the promise of meaning." What everyone gets confused about is the difference between meaning and the promise of it; like the "pursuit of happiness," what you're guaranteed is not success but its potential. src Design Observer article

Paul Rand was an American art director and graphic designer, best known for his corporate logo designs, including the logos for IBM, UPS, Enron, Morningstar, Inc., Westinghouse, ABC, and NeXT

Twitter has proven to be a nightmare for Logo Designers. Any new Logo design is subjected to an intense Twitter Firestorm with the inevitable "Even my 5 year old could have come up with something better"

In this article "Not Diving but Swimming", the author talks about a few secrets

In recent times some of the Logos that were mocked were

Uber has a New Logo and the Internet is not pleased - CNN article

MET Museum logo

The Metropolitan Museum of Art's Logo is a Typographic Bus Crash

Monday, March 7, 2016

Great Leadership - Allow yourself to be Persuaded

In his book "Persuadable",  Al Pittampalli talks about how great Leaders are those who are open to listening to others' opinion and allow themselves to be Persuaded.

Alan Mulally, the vaunted CEO who saved Ford Motor Company, is, for example, exceptionally skeptical of his own opinions. Ray Dalio, one of the world’s most successful hedge fund managers, insists that his team ruthlessly second-guess his thinking. Christine Lagarde, managing director of the IMF, seeks out information that might disprove her beliefs about the world and herself. One Nobel Prize-winning scientist discovered the cause of ulcers by bravely doubting his own entrenched beliefs.

In 1971, Phil Knight the founder of Nike favored "Dimension Six," as the name of his company but his 45 employees thankfully laughed that one down. Then Jeff Johnson, '63, a fellow running geek, proposed a name that came to him in a dream: Nike, for the Greek winged goddess of victory. The company paid $35 to commission a new logo--a fat checkmark dubbed a "swoosh"--and the new shoe debuted at the 1972 Olympic trials in Eugene, Ore. src Stanford - The Force Behind the Nike Empire

In our increasingly complex world, these leaders have realized that it is impossible to have all the answers and the ability to consider emerging evidence and change their minds accordingly provides extraordinary advantages.

In his book he also quotes Bezos "People who are right change their minds a lot. You need to have ideas tomorrow that contradicts ideas you have today".

Read the book

Sunday, March 6, 2016

Vice follows Virtue - Rewarding healthy food consumption with Unhealthy food

In an experiment where items being loaded into grocery carts were tracked, it was observed that for every healthy food that was added to the cart the shopper was more likely to then go over to ice cream or beer section.

After purchasing Virtue categories, consumers are more likely to shop at locations that carry vice categories.

This balancing act is very similar to how people reward themselves with beer or cake after a killer workout.

This is also known as a Tit for Tat effect.

In one experiment, one group was given placebo pills which they believed to be dietary supplements. This group expressed less desire to engage in exercise and more desire to engage in hedonistic activities like smoking and excessive eating. Another group was given the same pill and were told that it was a placebo and this group did not exhibit any of the hedonistic behavior of the first group.

In another experiment a group of smokers who thought they were given a Vitamin C pill smoked nearly twice as many cigarettes while filling out a questionnaire in comparison to a group who were told the pill was a placebo

Also read - NYTimes story - How Salad can makes us Fat

Optimising Healthy eating - A Google case study

Google is known for providing great food for free to its employees. In this HBR article, How Google Optimized Healthy Office Snacks, it talks about how subtle changes can promote Healthy eating. A few examples cited in the story are

  • Distance from Beverage station to snack bar makes a difference. It was observed that people tend to pick up a snack along with a beverage. The closer the snack station, the more likely people were to pick up a snack along with a beverage. Increasing the distance between the beverage station and snack station resulted in reduced consumption of snacks thus resulting in lower calorie consumption
  • Promoting unpopular healthy food next to the food helps. It was perceived that advertising healthy foods like Beetroot, cauliflower etc wouldn't get people to eat more. However, it was found that putting up posters right next to the dish with pictures and trivia increased the consumption of these foods.
  • Size of the bowl matters. M&M is very popular in Google and were made available through self serve bins with 4 ounce cups. Most People tended to fill the cups. The loose M&Ms were then replaced with small packages. This simple intervention reduced the average serving by 58%, from 308 calories to 130.

Tuesday, March 1, 2016

Meaning of Short/Long range planning - Peter Drucker

According to Drucker - The Idea of Short - Long range planning is very often misunderstood. They are not determined by any given Time span.

A decision is not short range because it takes only a few months to implement or long range because it takes a year to do so.

What matters is the time span over which it is Effective

Monday, February 29, 2016

ASA model - How organisations become Homogeneous

In 1987, Psychologist Benjamin Schneider in an article titled "The People make the place" lays out a model called ASA.

Attraction - Selection - Attrition.

He writes about how organization cultures are defined by the people that work there and not by people at the top.

He asserts that “the people make the place” and that organizational culture, climate and practices are determined by the people in the organization.

Attraction: People are differentially attracted to careers as a function of their own interests and personality. They have stated that people search environments that fit by their personality and that people would like to obtain their outcomes by selecting a specific organization.

Selection: Organizations select people who they think are compatible for many different kinds of jobs. In that way organizations end up choosing people who share many common personal attributes, although they may not share common competencies.

Attrition: The opposite side of attraction. When people do not fit an environment they tend to leave it. When people leave the environment a more homogenous group stays than those were initially attracted to the organization.

As this plays out over a period of time, an organization becomes increasingly Homogeneous in its culture.

Implications of the model are

1) the difficulty of bringing about change in organizations: Organizations have great difficulty when trying to change, because they not contain people with the appropriate inclinations. When the environment changes an organization will not be aware and probably not be capable of changing.

2) the genesis of organizational climate and culture: climate and culture are not easily defined in an organization, most often they exist when people share a common set of assumptions, values and beliefs.

3) The importance of recruitment: on personnel selection is paid a lot of attention. Surprisingly, on personnel recruitment, in which way do we communicate on vacancies, is not paid much attention.

4) The need for person-based theories of leadership and job attitudes. The research on this area is depressing according to Schneider (1987). We believe that the attitudes of people are created by the conditions of the work place.

Disorder produces Creativity

In this study "Physical Order Produces Healthy Choices,Generosity, and Conventionality, Whereas Disorder Produces Creativity" 3 experiments were conducted
  •  Experiment 1 showed that relative to participants in a disorderly room, participants in an orderly room chose healthier snacks and donated more money.
  • Experiment 2 showed that participants in a disorderly room were more creative than participants in an orderly room
  • Experiment 3 showed a predicted crossover effect: Participants in an orderly room preferred an option labeled as classic, but those in a disorderly room preferred an option labeled as new

Experiment 2

Forty-eight American students participated in a two-condition (orderly vs. disorderly environment) design.

Participants completed tasks in a room arranged to be either orderly or disorderly. Participants imagined that a company wanted to create new uses for the ping-pong balls that it manufactured. They were instructed to list up to 10 new uses for ping-pong balls.

Participants in the disorderly room would generate more creative solutions than would participants in the orderly room.

To read the complete report click here

Was Russia's 2010 grain export ban responsible for the Egypt revolution?

In 2010, a severe drought and a spate of wildfires devastated crops in Russia resulting in an export ban by the Government. Russia is the biggest producer of wheat, barley and rye. Its biggest export markets are Egypt followed by Turkey, Syria, Iran and Libya.

This Reuters article "Global dependence on food imports leaves countries vulnerable" states that the 2010 ban may have been partially responsible for triggering social unrest and revolution in Egypt as more than 500,000 tonnes were not supplied and global prices rose damaging Egypt's state bread subsidy program. 

This article also talks about how rapid urbanisation is resulting in wiping out of farmlands which results in countries being dependent on grain imports.

Sunday, February 28, 2016

HiPPO - Highest Paid Person's Opinion

HiPPO - Highest Paid Person's Opinion is an affliction that affects most organisations. Managers tend to throw the weight of their designations on their juniors by asserting their will even though the subordinates may have a better perspective. This results in a culture where the workforce gets into an execution mode throwing away their thinking hats.

A famous quote from Jim Barksdale, Netscape CEO is “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”

The most famous case is of Ron Johnson who was Sr VP of Retail operations at Apple and was responsible for the success and launch of Apple Stores. 

He was appointed CEO of JC Penney in 2011. Buoyed by his success at Apple, he had complete disdain for the competence of JC Penney staff or their culture. He frequently mocked Senior executives in public, ridiculing them for their decisions. 

He relied on his gut rather than data and bull dozed his way through implementing his mandate. 

By early fall 2011, Mr. Johnson was tackling Penney’s pricing, which he thought used too many discounts. He ignored a study Penney had just completed on customer preferences, and gave merchants a one-sheet grid explaining what prices they could use.

“Ron’s response at the time was, just like at Apple, customers don’t always know what they want,”

He was heady with his success at Apple and although encouraged by the company’s retail veterans to do so, Johnson decided not to test any of his changes because Apple  had never tested when growing its store network. 

Mr. Johnson liked to tell employees that there were two kinds of people: believers and skeptics, and at Apple, there were only believers. He wanted the same at Penney

Johnson had to finally be shown the door in 2013 with the company losing close to a Billion Dollars in 17 months and market capitalization fell by nearly 50%.

Src Forbes article What Happens When a 'HiPPO' Runs Your Company?

Src NYT's - Chief’s Silicon Valley Stardom Quickly Clashed at J.C. Penney

Why Work from office is better than work from home - a Google example

In their book "How Google Works" Eric Schmidt and Jonathan Rosenberg speak about the Google work culture. Google encourages people to stay longer in office and keep them in cramped quarters. In order to do this they have free food, games on campus, bring your family to work and an open cluttered and cramped office where people are in close proximity to each other.

This constant interaction with people in the office brings out new ideas, breaks communication barriers and keeps the flow of information which is difficult in the case of a work from home environment.

A very good example cited in the book is that Google's Adsense product which developed into a multibillion dollar business was invented by a group of engineers from different teams who were playing pool in the office.

Read the book

Increased Yelp penetration decreases footfall in chains

In this research paper by Michael Luca, "Reviews, Reputation and Revenue: The case of" the author has a few interesting findings. 

The notable one being that in markets where Yelp penetration has increased, chain restaurants have declined in market share. This may indicate that with greater visibility of independent restaurant through reviews, customers are more likely to experiment and visit newer places unlike markets where reviews are unavailable. In a market without reviews people probably choose eating places on the basis of popularity or because of the sheer marketing muscle of the chains. 

The few other highlights as quoted by the author are

(1) a one-star increase in Yelp rating leads to a 5% to 9% increase in revenue, 

(2) this effect is driven by independent restaurants; ratings do not affect restaurants with chain affiliation. 

(3) chain restaurants have declined in market share as Yelp penetration has increased. This suggests that online consumer reviews substitute for more traditional forms of reputation. I then test whether consumers use these reviews in a way that is consistent with standard learning models. I present two additional findings:

(4) consumers do not use all available information and are more responsive to quality changes that are more visible and

(5) consumers respond more strongly when a rating contains more information. Consumer response to a restaurant’s average rating is affected by the number of reviews and whether the reviewers are certified as “elite” by Yelp, but is unaffected by the size of the reviewers’ Yelp friends network.

Ideal Team Size - Bezos' 2 pizza rule

Amazon's Jeff Bezos is of the view that too much Communication is really a bad thing. 

This WSJ article quotes an Amazon executive who says that during an offsite when some employees suggested that there should be more communication in the organisation, Bezos declared that "No, Communication is terrible"

Bezos preferred a decentralized company where independent thinking prevails over Grouthink.

In order to achieve this, he implemented a company wide policy, the concept of the "2 Pizza team".

Any team should be small enough that it could be fed with 2 pizzas.

Small teams generally tend to function like families, fighting, bickering but eventually getting the work done. Larger teams tend to be more political.

Source: Birth of a Salesman, WSJ article by Richard L. Brandt

Thursday, February 25, 2016

The Impostor Syndrome - Women the major sufferers

The Impostor syndrome (also spelled imposter syndrome, also known as impostor phenomenon or fraud syndrome) is a term coined in 1978 by clinical psychologists Dr. Pauline R. Clance and Suzanne A. Imes referring to high-achieving individuals marked by an inability to internalize their accomplishments and a persistent fear of being exposed as "fraud". Despite external evidence of their competence, those exhibiting the syndrome remain convinced that they are frauds and do not deserve the success they have achieved. Proof of success is dismissed as luck, timing, or as a result of deceiving others into thinking they are more intelligent and competent than they believe themselves to be. Some studies suggest that impostor syndrome is particularly common among high-achieving women, while others indicate that men and women are equally affected. src Wiki

In this article the author states that World Health Organization chief Dr. Margaret Chan thinks she’s a fraud and so did Sheryl Sandberg

In this blog by Gulnara Mirzakarimova, a Jibe software engineer & Hackbright graduate she writes about how she suffered from the syndrome and overcame it.

Read some example stories on 

Embrace your inner imposter
The Imposter Phenomenon in High Achieving Women
Do Women Everywhere Suck at Their Jobs?

Expensive = Good

In his book "Influence, The Psychology of Persuasion", the author Robert Cialdini cites 2 examples where change in pricing/positioning influenced the decision of the buyer.

In the first example a Jewelry shop owner was desperately trying to sell a piece of Turquoise set. It was the peak of the tourist season with the store full of customers but the set just wouldn't move despite the set being of good quality and reasonable price. She tried positioning it in the store and even getting the sales staff to push it but to no effect.

Finally, in desperation when she was leaving for an outstation trip, she left a note to her Sales Head instructing her to price it at 1/2. When she returned she was not surprised when she was told that the pieces were sold off however she was shocked when she learnt that her sales Head misread the 1/2 to 2 and had in fact doubled the price.

The author talks about preconceived notions that we have and one of them that we have is that Expensive = Good.

In another example he discusses how Retailers try to order their sale. A customer who wants to buy a Suit and a sweater logically a sales person should show him the cheaper one first which is the sweater and then close the sale for the suit which is more expensive because if he has spent a lot of money buying the suit then he may not buy the sweater. However, what is practiced is the reverse, the sales person will first sell the Suit and then sell the sweater. The thinking is that if he buys a sweater at $100 first and then presented with a $500 bill for a suit, he will balk at the idea. However, once he spends $500 on the suit then anything which is priced lesser is easier to sell and hence it is also easier to sell a lot of accessories once a customer has bought a very high value item

Read the book at

Tuesday, February 23, 2016

Winning a competition predicts dishonest behavior

According to a study by Amos Schurr at Ben-Gurion University of the Negev and Ilana Ritov at The Hebrew University of Jerusalem, Winning a competition makes people more likely to later behave dishonestly

Winning a competition engenders subsequent unrelated unethical behavior. Five studies reveal that after a competition has taken place winners behave more dishonestly than competition losers.

The following are the key highlights of the study

  • Winning a competition increases the likelihood of winners to steal money from their counterparts in a subsequent unrelated task. 
  •  The effect holds only when winning means performing better than others (i.e., determined in reference to others) but not when success is determined by chance ie. a Lottery or in reference to a personal goal. 
  • A possible mechanism underlying the effect is an enhanced sense of entitlement among competition winners.
The authors also cites the case of the recent Volkswagen scandal

The key highlight of the research is that 

"Although we know much about contestants’ behavior before and during competitions, we know little about contestants’ behavior after the competition has ended. Connecting post competition behaviors with preceding competition experience, we find that after a competition is over winners behave more dishonestly than losers in an unrelated subsequent task. Furthermore, the subsequent unethical behavior effect seems to depend on winning, rather than on mere success. Providing insight into the issue is important in gaining understanding of how unethical behavior may cascade from exposure to competitive settings."

Monday, February 22, 2016

Structured Debates to eliminate Groupthink

In this HBR article , the author talks about using Structured Debates as a technique to eliminate Groupthink.

One strategy that can significantly help teams avoid the dangers of Groupthink and successfully respond to emerging threats and opportunities is to create structured debates. This is done by randomly assigning different team members to argue opposing points of view. Structured debates can provide an opportunity to rigorously discuss and dispute interpretations of current trends, as well as future predictions, in a kind of organizational “safe mode” that enables teams to explore external risks without putting individual members of the team at internal risk.

Randomly assign different team members to argue opposing points of view. Then, at a team meeting , set up a debate with scenarios such as: “Our organization’s mobile app will be obsolete within two years. Here’s what will replace it, and here’s what we need to do now to survive and thrive.” Ask half the team to argue why the current mobile app is sufficient, and the other half to argue how and why the mobile app needs to be changed. Debates like this can help overcome people’s reluctance to ask and answer tough questions about how the world has changed or is changing, and how the organization needs to evolve accordingly. src HBR


Groupthink is a psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative viewpoints, by actively suppressing dissenting viewpoints, and by isolating themselves from outside influences. src Wiki

The term was coined in 1952 by William Whyte, an American business writer who feared that corporate "groupthink" would suppress original thought and entrepreneurialism.

Nietzsche once said that Madness is the exception in individuals but the rule in groups.

In his book "Groupthink: Psychological studies of policy decisions & fiascoes" author Irving Janis cites an example of a disaster that struck a small mining town of Pitcher, Oklahoma in 1950. 

A few days before disaster struck the local mining engineer had warned the inhabitants to leave because the town had been accidentally undermined and might cave in at any moment. At a meeting of leading citizens, the members joked about the warning and laughed when someone arrived wearing a parachute. Within a few days this collective complacency cost some of these men and families their lives. 

This was a classic case of Groupthink where sane voices were drowned by the collective group.

Read the book