3BI: Branding, Narratives, and Curiosity
Welcome to my 3BI newsletter, where I share three insights from the world of behavioral science on psychology, decision-making, and behavioral change.
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Narratives Run the World
Our world is shaped by narratives more so than technology. Case in point: we aren’t usually convinced by “rational” evidence from math or science, but rather by the most compelling stories. From Barry Schwarz:
Search engines and microchips don’t change the world unless they work. Ideas, in contrast, can have a major impact on human life even when they are false.
We buy narratives, not technologies. Breakthroughs in science and engineering aren’t enough - they must also be marketed well to be adopted at large. The iPhone wasn’t the first smartphone and Facebook wasn’t the first social network, but both told better stories about their products than competitors and took control of the market.
This is why marketing is an underrated skill set. In a complex world with more information than we can possibly process, stories and narratives break through the noise. Rather than ignore this, we should utilize it! Many important innovations just need a more compelling story to be adopted.
Read more at Behavioral Scientist.
Branding for Professions
The best marketers know that we don’t tend to buy products that simply meet functional needs or technical requirements, but ones that also reflect our taste, cultural preferences, economic status, and social class. This is why they spend a lot of time establishing brands that communicate those underlying needs. Think of a car company like GM which sells affordable middle class vehicles under the Chevrolet brand and expensive luxury ones under Cadillac. There’s no reason that a Chevy couldn’t be made the exact way a Cadillac is, but customers want it packaged in the right branding.
This extends beyond consumer products, too. As Matt Levine points out, branding can be a key factor in our professional choices:
You could have a model of Harvard Business School that is like:
Harvard Business School teaches you skills that would make you good at running a company.
There are lots of companies that could use those skills.
But you don’t want to run those companies, because they make, like, ball bearings.
You want to run a fancy company; you want to run a hedge fund or a tech startup or something.
Meanwhile, the people currently running the ball bearings company would not be all that excited about you, a fresh-faced business school graduate who has never run anything, coming in to run their company, even if you did learn a lot of useful skills at Harvard.
Therefore various industries exist whose principal business is laundering ball bearings companies into opportunities that appeal to Harvard Business School graduates. You wrap the ball bearings company in a name like “private equity” and suddenly it is legible to the Harvard students, so they flock to it.
Those industries are also in the business of getting the ball bearings companies to accept the Harvard Business School graduates, which in practice means not so much “make the ball bearings company excited about its new Harvard CEO” but rather “buy the ball bearings company and install new management.”
This is an interesting way that job markets sort using criteria beyond pay and benefits. Professionals with an elite pedigree don’t seem to have an issue with the actual work involved at more traditional “boring” industries or companies, but are only willing to do it if the official job title is sufficiently prestigious. Thus, the market creates intermediaries like private equity and management consulting to fix the mismatch. It’s the job market’s version of consumer branding.
Read more at Money Stuff.
Know the Why
There is always an underlying purpose to behaviors, even if those reasons are messy and hard to understand. When actions don’t align with stated intentions, we have to step back and ask why before devising solutions, as Rory Sutherland states:
You should never denigrate a behavior until you have worked out what purpose it really serves.
Changing behavior requires being dispassionate about people’s actions and calmly assessing the real reason for what’s happening. We have to understand the logic and deeper meaning behind the actions in order to effectively change them.
Ramit Sethi has a nice framework for this called the “D-to-C principle:” Disparagement to Curiosity. When we see others (or even ourselves) do things that seem silly or nonsensical, we should shift from judgement to curiosity. Asking why people do things that don’t make sense is much more illuminating than shrugging it off as stupidity, laziness, or ignorance.
Quote via Greg Power.