Just because logic proved useful in the physical sciences doesn't mean it's applicable everywhere, especially in the field of human affairs. We built a logic-run world because it gives us a sense of control. But that's merely an illusion.
The following is a summary of ideas Rory Sutherland shared in 2 of his books on marketing and creativity. To sum it up:
"Our conscious mind tries hard to preserve the illusion that it deliberately chose every action you have ever taken; in reality, in many of these decisions it was a bystander at best and much of the time it did not even notice the decision being made."
Cracking the (human) code
Suppose we allow logical people to run the world. In that case, we only discover logical solutions (The world would look similarly to how ChatGPT currently writes - it seems like a good piece, but upon closer inspection, it's clearly written by AI (This statement is not going to age well 😁)). But in real life, things aren't logical, they are psycho-logical. There are two reasons for people's behavior: Ostensibly logical reasons—the real reason.
The real reason is never the logical reason. We just like to pretend it is. Large parts of human behavior are like cryptic crosswords: things aren't what they seem on the surface.
Psycho-logic
Humans are deeply social, and in fields such as economics, policy, politics, etc, treating humans as rational agents is being blind to reality. Sutherland gives an example of the Hilary-Trump candidacy in 2016. Trump's election was blamed on stupid and uneducated voters.
But Rory argues that hyper-dependence on prediction data and mathematical models on Hilary's side was the issue. Clinton's strategist told her to skip Wisconsin because the data predicted it would vote Democrat. But what his data-driven predictions missed out on was real-life observations such as:
- Wisconsin has always been an eccentric state politically, so it couldn't offer a guarantee.
- Trump was gathering stadiums, whereas Hilary had sparse crowds.
One of the promises Trump ran with was 'We're gonna build a wall, and Mexicans will pay for it." We all knew he was not going to, right? But the thing is, he doesn't need to build the wall - he just needs people to believe that he might.
Hilary thought like an economist, whereas Trump was a game theorist. In the pretend world, we're playing rational, but in the real world, we're emotional, and Trump tapped into that.
Logic in business
In a mechanical system, such as a machine, one thing serves a narrow purpose. The human systems are complex, therefore things can have multiple uses depending on the context. Just because we don't know why something works, we shouldn't discard it, like religion or silly-looking ad campaigns.
If you were a business owner whose product is not selling well which one would you suggest to a board?
A) Reduce the price.
B) Feature more ducks in the ads.
It seems like nonsense, but reality shows that B is the correct answer, and it's been shown time and again. And yet, if you stood in front of a board, you'd propose A because that sounds logical.
Board meetings
Bureaucrats or big company executives become risk-averse and, therefore, begin to demand logic out of fear of losing control. But logical solutions fail because logic requires universally applicable laws that human behavior does not adhere to.
For example, there are two equally potent yet contradictory ways to sell a product:
a) Not many people own this, so it must be good (scarcity).
b) Many people own this, so it must be good (ubiquity).
Or, imagine entering a boardroom with these pitches:
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What people want is a really cool vacuum cleaner (Dyson)
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And the best part of this is that people will write the entire thing for free! (Wikipedia)
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I confidently predict that the great enduring fashion of the next century will be a coarse, uncomfortable fabric that fades unpleasantly and takes ages to dry. To date, it has been largely popular with indigent laborers. (Jeans)
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People will be forced to choose between three or four items and love it. (McDonald's)
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And best of all, the drink has a taste that consumers say they hate. (Red Bull)
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Just watch as perfectly sane people pay $5 for a drink they can make at home for a few pence. (Starbucks)
Contrary to physics, in psychology, two or more things can be true at the same time. Rory claims businesses that fixate on logic and corporate spreadsheets rather than psychology fail. Businesses that focus on logic are illogical.
Context is everything
In his book Skin in the Game, Taleb gives an example of someone's seemingly contradictory account of his political position:
'At the federal level, I am a Libertarian.
At the state level, I am a Republican.
At the town level, I am a Democrat.
In my family, I am a Socialist.
And with my dog, I am a Marxist.'
This is the most honest account you could find, and it's true for almost everyone in any field of their lives, including business.
Ideas that don't make sense
Sutherland argues that great marketing ideas are often built around a profoundly irrational core. Below are 11 rules he developed over the years:
- The opposite of a good idea can also be a good idea.
- Don't design for the average.
- It doesn't pay to be logical if everyone else is being logical.
- The nature of our attention affects the nature of our experience.
- A flower is simply a weed with an advertising budget.
- The problem with logic is that it kills off magic.
- A good guess which stands up to observation is still science. So it is a lucky accident.
- Test counterintuitive things only because no one else will.
- Solving problems using rationality is like playing golf with only one club.
- Dare to be trivial.
- If there were a logical answer, we would have found it.
Read part 2.
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Also published here.