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.