Rory Sutherland, vice chairman, Oglivy & Mather UK, talks to Marketing Society editor, Elen Lewis on the importance of overtrust, the rewards of shouting 'scissors' when everyone else shouts 'paper' and driving a jag.
Taking the cue from 'a little less conversation' - what's your favourite example of behavioural economics in practice today?
This should be a very easy question for me to answer but it isn't. My great hope for behavioural science is that it allows psychologists, marketers and creative people to increase the range and scope of the problems for which they are allowed to find solutions - so I am delighted not so much by any one example of behavioural thinking, but by the extraordinary diversity of its application. This 'scope' expands in two dimensions. First of all in breadth: we have recently been briefed with reducing the risk of contamination in a Chilean food factory and training the staff of a call centre in behavioural nudges (thereby increasing conversion by 200%); neither of these briefs would previously have found their way into an agency. But then there is also depth. The beauty of this approach is that it is immensely scalable. I have recently seen a beautiful technological idea from our Dubai agency which discourages drivers from tail-gating, and an idea which allows children or grandchildren discreetly to check on the welfare of elderly relatives. These small things - like the flies etched on to urinals - are very good, focused ideas which solve a specific problem. Equally there is some recent work by Gerd Gigerenzer on defensive decision-making which has immensely widespread implications for anyone in the private or public sector - and especially for medicine and healthcare.
'It's better to be brave than good' - can this advice be applied to business?
A huge amount of effort in business is now dedicated to optimising things: a problem then arises when lots of businesses in the same sector all optimise the same damned things. The result is that competing companies rapidly become more or less indistinguishable from each other - and are hence effectively commoditised. There is a recognised problem with 'wind-tunnel marketing' - see Jim Carroll of BBH here - but we are in danger of creating wind-tunnel businesses.
It takes some courage to be distinctive. Jules Goddard of London Business School attacks the idea of 'best practice' since, if everyone shares the same narrow idea of 'best', you end up with a range of near-identical goods. No-one benefits from this: not consumers, not businesses, not share-owners. Business isn't just about being a good manager, it's also about being a good game theorist - what Dave Trott calls Predatory Thinking. When everyone else shouts 'paper', the rewards go to the man who shouts 'scissors'.
But everyone shouting 'paper' feels safe. If you do something conventional and fail, you can make excuses: if you do something different and fail you get blamed.
This problem arises from defensive decision-making. Please read Gerd Gigerenzer's book Risk Savvy for more about this.
What does bold marketing leadership look like?
Jules Goddard again: 'Strategy is the art of staying one step ahead of the need to be efficient.'
What advice would you give to brands looking to re-invent, re-define and re-imagine...
Ask yourself what your brand gives you a licence to do which nobody else can. Game theory again.
What is the most valuable lesson you've learnt about leadership?
Overtrust. Here's Charlie Munger of Berkshire Hathaway: 'By the standards of the rest of the world, we over-trust. And so far, our results have been far better, because we carefully selected people who should be over-trusted. I think a lot of organizations work better when there is a culture of trust. And in modern organizations, where there are tight controls and monitoring, I think they're going to be worse for it.'
What advice would you offer to businesses looking to reset the agenda for the future?
What is the most effective way to cope with discontinuity?
What are the best examples of businesses today that are reshaping the value exchange?
Uber, Hailo, etc. And I must also add a shout-out to our client British Gas for the Hive idea. This is a really transformational idea - and a rare case of a big British company reshaping their category. It is a great melding of technology and psychology.
Just as an additional high-five here, someone had the great idea of giving the product to the engineers who install it. My British Gas engineer was hence a brilliant expositor and advocate for the product he was installing. Respect.
What is your most hated business expression?
'Big data'. I don't hate it, actually - I think in some cases it will be miraculously useful - but I worry that it may cause more harm than good.
What is your golden rule?
'What are the assumptions surrounding this problem?'
'Which of these damned assumptions is false, and is hence making the problem needlessly difficult to solve?'
When you simply reframe a problem you will often find its solution is much easier than you imagined.
What has been the tensest moment of your career?
Definitely those 24 hours in a Qatari jail as Ogilvy's answer to Johnny Cash.
What would you say to your 17-year-old self?
Nothing, as the act might create a hole in the space-time continuum. Or something.
What’s your guilty pleasure?
Voting Conservative and driving a huge Jag.
What are you reading?
Think Like a Freak by Levitt and Dubner. It is worth it just for the statistical disquisition on penalty-taking, which I find fascinating even though I don't like football very much.
Tell us a secret
Occasionally, when I am forced to fly on low-cost airlines, I book the seat next to me under a false name to keep it empty. Sorry Martin.