Posts Tagged ‘Psychology’

Negotiation and evolutionary psychology – a look at our nature

May 18, 2012

A couple disparate events came together to form the basis for this post. One is my rediscovery of my interest in evolutionary psychology. The other is a random PR guy on the BBC breakfast show this morning. On a side note, I’m mentioning this show for the last time, because it is simply unwatchable. I put it on while feeding the baby at 7 AM, and was tempted to knock back some of the formula milk.

Let’s start with the random PR guy. ‘Breakfast’ wanted to discuss the Facebook IPO and realized they needed an angle apart from the purely financial aspects. So, they trotted out some guy to provide the expected, but painfully misguided idea that Facebook has cemented its place as our number one social media platform…forever. Random PR guy, meet book, book, random PR guy.

So why mention this? The point is that we are all biased – some more than others – and possibly irrevocably so. It is the same reason that some people believe they are the first one to develop new approaches to marketing, procurement, accounting, strategy or operations that have established a new framework which will then last forever. And develop the ego to go with it.

History vehemently disagrees, and although that is sort of known – again, some people are widely read while others are too busy enlightening the world – it gets conveniently pushed to the background. Certain approaches fit well in certain environments, but then the environment inevitably changes in a big way (here is where you go back and reference Black Swan and/or Fooled By Randomness).

The same human nature that causes the “I’m super-special” bias (have I just coined a term?) also was kind enough to bring us the “I am incapable of being in a true partnership” bias. If you are super-special, why should you partner with anyone? They will only mask your brilliance.

We have seen obvious examples of negotiations that are crying out for a true partnership (NFL and the NFL players union) for example. Companies with their main suppliers. CEOs with key executives. There are only a very small percentage that are able to break through the desire to pull leverage games, degrade the other side, and invent reasons why you are superior. This feeling comes through in every interaction and trust is broken down. In game theory terms, the recipient’s optimal strategy is then risk minimization mode…which then prevents reaching the larger prize.

If you are that guy, you most likely don’t know it. But give listening a shot and you may be surprised.

The Black Swan (film)

Random Black Swan photo. People like pretty pictures. The Black Swan (film) (Photo credit: Wikipedia)

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Branson’s conditioning

February 22, 2012
English: Sir Richard Branson at the eTalk Fest...

Good work, Richard. Image via Wikipedia

I recently received a two pieces of communication from Virgin media, who does my internet, phone, and cable TV. The first one celebrated the fact that I will be receiving up to 100 Mb/s in internet speed 18 months from now.

This celebratory letter spoke of the massive investment Virgin was making in me, and painted a clear picture of how wonderful life will be with all this speed. Richard Branson, the CEO of Virgin, was prominently featured…it was as if he reached into his own pocket and decided to help me out. What a guy!

Two days later I received a second letter telling me that there would be a price increase in my service bundle. No mention of Mr. Branson to be found. But I thought ol’ Richard was my benevolent, rich friend?!

This, ladies and gentleman, is called conditioning. In this particular case, Branson and staff played on how our minds are wired as it relates to gifts. We receive a gift (free extra internet speed), and are then hit with a price increase. Since we just received the gift (even one we didn’t ask for), we connect this to the price increase and the increase isn’t so bad. Fair is fair. And Virgin gets to win market share while having us pay for it.

The worst part is, it works. And there is nothing unethical or problematic about it.

The reality is that we’re just not as complex as we think we are.

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Behavioral Economics and Purchasing

November 19, 2011

I am currently reading a collection of scholarly articles by George Lowenstein. Who is George Loewenstein? Why, only one of the pioneers in the field of behavioral economics! If you did know who he was, well, neither of our lives are very exciting.

Ol’ George is also a man after my own heart. He’s taken concepts from psychology, and applied them to economics.

Painless Saving

Some of you out there will think you are very rational decision-makers when it comes to buying stuff. You are the ones that are especially dangerous…biased but in denial.

The funny thing is that humans make irrational decisions in systematic ways. For instance people fear loss more than appreciate the joy from a gain. We create stories by making sense out of random events. We predict that we’ll be more disciplined in the future than we act today, and inevitably don’t deliver.

It just so happens that in the day job, I advise on purchasing decisions, except in the realm of big corporate decisions rather than on an individual level. The question I get to, then, is whether behavioral economics is applicable at the organizational level. My hunch is that it is, but my next hunch is that “powerful” people will be uncomfortable with this notion…until 20-30 years from now when behavioral economics goes mainstream.

The other issue is the “So What?” factor…i.e. what do we do about it. Going through a process involving multiple viewpoints is a start, but the fundamental challenge is the fact that people who are, in fact, wildly biased are often those most convinced that they are perfectly rational. And, if perfectly rational, what need would there be to account for any biases? Compound all that by those same people surrounding themselves with those who either think the same as they do, or those that will realize it is much more profitable to fly under the radar without saying a word, and the problem is obvious.

All this may sound a bit cynical. However, I prefer to look at it the other way. Those who are open to this new knowledge will have an advantage over the rest.

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Levels of intelligence – Top 5 Style

July 10, 2011

IQ and other measures of intelligence are having a hard time justifying themselves these days – and with good reason. There are many different types of intelligence, so the chances of developing a good test are minimal. However, who needs IQ tests when you have the TPS Report! Here are the five levels of intelligence, as seen through the eyes of the editor in chief of TPS planet (editor in chief? Sounds a bit too official, but when you are a one-man band, you can have any title you like!).

5. Average or below average intelligence – whether one is born into this, or lacks the development necessary, I’m not sure. No one thinks they are here.

4. The sharpshooter – can point out minor flaws in someone else’s work, grammar, spelling, or thought process. Can be a valuable member of the team, but knock yourself back to 5 if you take yourself too seriously when performing this role.

3. The glue – Is creative once a pattern or template has been established. Understands the value of consensus and working together as a team, and seeks to resolve disputes. Considers their feedback carefully and looks to build up more than tear down. Asks a lot of questions. Depending on the situation, this person may be more valuable than number 2.

2. The egotist – intelligent to the point where some people will follow and be impressed by this individual. Able to create works from nothing, and good at selling their ideas to others. However,  the key (and dangerous) flaw is the lack of recognition of the limits of one’s own knowledge. Does not recognize that others have better ideas at times, and will rarely pause to consider (or if they do will normally conclude that their current way is correct) whether one’s own conception of the world does not fit with reality.

1. The pinnacle – recognizes number 2 when he/she sees it, and is not drawn in. Understands that no one person or book holds the one “right” way to do things. Sees the world as one big system with lots of moving parts and varying causes, and therefore resists the temptation to blame individuals very often. Actively seeks out the other side of the story and/or dissenting opinions. Is creative, and appreciates the creativity found in others. Provides opportunities for others to develop beyond current capabilities through an atmosphere of trust and a conspicuous lack of second-guessing. Knows that lecturing does not teach, and asks questions more often than provides advice/explanations. Most importantly, this rare person sees himself/herself as a small part of a whole, and therefore gives credit easily and is parsimonious with blame.

Got you with parsimonious,  didn’t I?! Stingy just didn’t sound very good, and the Google box was just too tempting. Post your comments or thoughts below. Do these describe people you know? What did I leave out?

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“Why do you have to golf every week?!”

March 4, 2011

For anyone that is unfortunate enough to engage me regularly in conversation, they are most likely sick and tired of hearing about evolutionary psychology. It’s the school of psychology that’s all the rage these days, especially amongst, you know, nerds.

I won’t attempt to sum up an entire way of thinking in a couple sentences, but I wanted to highlight one of the more depressing tenets of my studies (with a bit of my own amateur opinion thrown in). It is in a woman’s genetic interest to complain to her boyfriend/husband. Now, I understand that making that statement won’t exactly bring this guy down to do an interview, as guys have somehow known this innately for centuries.

One of the things that women look for in a mate is good genes – the well-chiseled gentleman dancing on top of a bar in Frankfurt on Tuesday night comes to mind. The other thing they look for is a guy that will provide high parental investment, which includes things like time raising kids as well as material resources. Of course, most of this thinking is done at a sub-conscious level, but be assured, it’s there. How do women know when a guy is committed enough to stick around? Complain, moan, and winge (for the Brits out there). The level of nonsense the guy is willing to accept without dashing for the door is a sort of proxy for male parental investment (MPI) that he may one day provide. Of course, guys’ brains weren’t exactly constructed to make women happy either, but the beauty of a blog is that I don’t need to pretend to be objective. Hopefully, when I feel like putting a bit of effort into this line of thought, I’ll discuss the implications for economic decision-making and negotiation.

Clearly, our genes weren’t constructed to make us happy, but the results speak for themselves. So the whole idea behind evolutionary psychology is not some right-wing Darwinian nonsense. It’s like what ICE-T said…”don’t hate the player, hate the game.”  Ah…ICE-T…wise beyond your bling.

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