Why Do Weather Forecasters Get Paid Even When They Get it Wrong?

Rory Sutherland on Influence from The School of Life on Vimeo.


I'm quite sure you asked yourself that question. I know I have. It's fascinating. Weather is a complex system.

Complex in a different way is the brain. We make decisions and base our behavior on two systems. System 2 is the conscious, rational, sequential thinking we have come to worship in the West to over rationalize life. This is a slow system, because it needs to collect evidence and assemble proof.

System 1 is the intuitive system, and it's much faster. We use it to make decisions that feel right — many of which end up working — yet we often can't explain why they worked. Much of the wisdom that was passed down through generations in my family is rooted in system 1-thinking. Natural medical remedies that work, therefore they survive over time.

Economies are complex systems, too. Which is why we cannot predict things by following an exact scientific solution. It's too narrow for the job.

The point is that in a complex system intelligence and rationality are not the same thing. You can have an intelligent or astute, clear cut rule without it being rational. And we do know that the brain shortcuts on habits. Says Sutherland:

“broadly speaking, something apparently very stupid and silly, which has been around for a million years or so, probably has some function to it.”

Hello Heuristics

In this talk at the School of Life Sunday Sermons adman Rory Sutherland introduces the idea that when we write for the wrong OS, i.e., system 2 instead of system 1, we have a lot of wasted time and effort. To solve the conundrum, he says, we should use heuristics.

Where do heuristics come from and what do they do?

Mini roundaboutThis useful term is essentially a rule of thumb the brain uses to choose fast. For example, think about mini roundabouts.

In Europe we use mini roundabouts to keep traffic moving, instead of stopping it. It works based on a simple heuristic — if anything comes from the right, you stop.

Another example of a heuristic is — if something feels too good to be true, it probably is. We're not allowed to use those in the Board Room, by the way.

An even simpler one. You know when in the Western movies someone says: it's too quiet. They know something is about to go down. Usually they act without definite proof — it would be way too late for it in that case.

This is important information to share about what we believe in and how we act.

Daniel Kahneman, recipient of the Nobel Prize in Economic Sciences for his seminal work in psychology that challenged the rational model of judgment and decision making, has written a book about the relationship between the two systems titled Thinking Fast and Slow.

The point is human behavior is not mathematical. Yet, we focus on the things that are numerically representable. Instinct is grossly undervalued.

There is a double system in business, where people who come up with really good ideas that work when tested need to then rationalize them to get them accepted and done. Sutherland calls the advertising agency a translation agency — because that is mostly their function.

Good ad agencies do that. The worst marketers reserve their best strategies for themselves.

Acting on instinct

Or going extinct. We act based on things like signaling, which is why companies and brands spend money to build reputation, to signal they will be around for a long time. Inversely, what is the message when they don't? Brands are proxies that compress data into a story.

Likeability is another instinctual prompt. Why are women often late for appointments with men? It's a built-in mechanism to test the guy's temper. A sociopath, for example, will lose his marbles, and you will know to stay away from them.

System 1 is interested in risk avoidance. Do you listen to your gut?

There is a wonderful exchange in Umberto Eco The Name of the Rose, Seventh Day, Night:

"I have never doubted the truth of signs, Adso; they are the only things man has with which to orient himself in the world. What I did not understand is the relation among signs . . . I behaved stubbornly, pursuing a semblance of order, when I should have known well that there is no order in the universe."

"But in imagining an erroneous order you still found something…"

"What you say is very fine, Adso, and I thank you. The order that our mind imagines is like a net, or like a ladder, built to attain something. But afterward you must throw the ladder away, because you discover that, even if it was useful, it was meaningless . . . The only truths that are useful are instruments to be thrown away."

Ad people know, we act on impulse. Therefore, an opportunity for advertising is to evolve into a different kind of conversation, one where that connection between impulse and action is utilized to create a different outcome. 

Brands that close the gap between promises made and promised kept are able to make better promises.

Sutherland provides the example of Westpac Bank in New Zealand, a country that saw the dangerous decline in people's savings rate. They designed an app that creates the opportunity for impulse saving.

Most of the influences arise from system 1. We pay for how things make us feel. This is also the undercurrent in relationships.

It was Dr. Angelou — poet, memoirist, novelist, educator, dramatist, producer, actress, historian, filmmaker, and civil rights activist — who said:

"people will forget what you said, people will forget what you did, but people will never forget how you made them feel."

Listen to the talk, it will make you feel smarter by helping you look at things in a new way.


[hat tip Farnam Street]


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