Daniel's blog

One of my friends had this status after the 2010 Haiti earthquake. AA managed to help and launch a really successful viral PR campaign at the same time.

>I have recently read a very interesting book called Nudge by Thaler and Sunstein. It explores our decision making processes and extends it to application in choice architecture. The authors argue that while people are able to think rationally (economically) they not always do so. Here is why, what it means for us and how we can at least partially overcome this problem.

It is either impossible or impractical to precisely calculate the trade offs between our options most of the times. Our previous experiences (intuition) and emotions then come in play and influence what decisions we make. Our rational and emotional selves are pulling us in opposite directions; the right, emotional, side of our brain often being the more dominant one (you know that you should choose A but end up choosing B because your feelings are telling you so). This is how we make sub-optimal choices.

Behavioural economics deals with this phenomena and, unlike rest of the field, it does not pretend that people always make rational choices. If applied, we can then speak of choice architecture. Since we always make our decisions in a certain context, it is possible to influence our choices by designing our decision making circumstances. It is important to say that choice architecture is not about tricking people into certain choices which might not be in their interest. It is about making decision processes easier for people by giving people so called nudges.

Nudges are small and deliberate changes to one’s decision making context. They are designed to influence one’s emotional decision making process in a direction that the rational system would take. They help people make better judgements while leaving them with the ultimate option to choose. Bellow are six examples of nudges that help ensure people’s rational and intuitive/emotional sides are not in conflict.

Defaults
As mentioned earlier, people do not always think about choices they are making. If there are multiple options, we tend to choose the default one (e.i. we do not switch to a different one). When designing a choice context, select the default option carefully as it is likely to end up being the most popular one. If you want people to make an active choice, do not offer an default one but force people to make a decision (e.g. by not allowing them to proceed before they make a selection).

Example: Much higher percentage of people agree to donate organs after their death if the organ donor form has ‘Yes I agree to be a donor’ as a default option.

Expect error
People can make bad decisions. Moreover, we tend to make the same mistakes over and over again. Try to guess therefore or, if possible, test on a sample of people what decisions they usually make in a situation you are putting them into. When designing a choice context you can then guide people away from making those mistake.

Example: People were forgetting their cards in ATM’s when taking cash. A nudge to counter this ensures that a machine does not give us money unless we take our card first. Another great example is a gmail functionality that gives you a warning message if you mentioned word attach(ment) in your email but did not attach anything.

Give feedback
Design a system that tells people if the decisions they are making are good or not. Receiving a feedback is one of the best ways to learn.

Example: Laptops warn us when the battery is low and we need to plug in the charger (e.i. if we make a decision to ignore the decreasing percentage count in the bottom corner of our display and we do not plug in the cord).

Understand mappings
This rather mysteriously called nudge suggests that you should make it as easy as possible for people to understand and evaluate potential outcomes of their decisions before they make them.

Example: Mobile operators having simple tables telling users how much it costs to use their services. This allows us to make a better choice when deciding if we should browse the internet from our mobile phone while abroad or not.

Structure complex choices
When the number of options is too big to evaluate each one individually, we need to apply certain filters. By allowing us to narrow down our domain of selection according to various criteria they make the selection simplier. Think therefore what are the most important criteria for the people you are presenting a decision with and offer them relevant filters.

Example
Amazon allows us to search for books by genre, price or date of publication.

Incentives
Let people know in as far as possible the real costs of their choices and hope it will improve their ability/willingness to think rationally. This nudge is the one closest to conventional economic theory.

Example
Thermostats showing us the cost of energy consumption in real time hence giving us a disincentive to keep the air condition on or treadmills telling how many calories we have burned as we run in a gym.

Happy nudging!

>We just got back from the Masai Mara National Park. We were lucky enough to be there during the great migration when thousands of animals come from the Serengeti park in Tanzania to graze in Kenya. The name Masai Mara means a Masai river. And Masai is a name of the tribe living there. We had a chance to visit their village and to see their traditional pastoral way of life.

What is unique about the Masais is that they are one of the few tribes that have not changed their traditional way of life. They have the same traditions they have had for centuries and while some of them might seem illogical and even funny to us at first sight, they have allowed them to survive until now.

Here are some examples:

Jumping competitions and polygamy.
Masai men often engage in jumping competitions. They do so for two main reasons. Firstly, if there is a pretty girl, more men get together and the one who is able to jump the highest, gets to marry the lady. That is of course providing he has enough cows to give as a dowry (10 cows is a standard). Secondly, if you are a really good jumper and can jump more then approximately 80cm you can pay only 7 cows instead of 10. If you have lot of cows or you are a good jumper you can have more wifes, usually up to five.

Houses with no chimneys
When entering a Masai house, the first impression is that there is almost no light inside and the second one is the heavy smoke that hits you as you go further inside. This is because there is a fireplace in the middle of the hut and only one small window on the side wall, there is no chimney.

When we were discussing these observations with rest of our party over dinner, some people found them illogical and funny indeed. But myself and our friend Klaus from Germany actually appreciated that there must be a reason why they are behaving in this way. Klaus called it the unconscious intelligence.

If you able to jump high, it means you are healthy and physically fit; e.i. you have good genes. If you have lot of cows, you are able to feed your family. It therefore makes sense for such man to have more wifes and kids then man who is weak and will not be able to secure his family (I am not advocating polygamy here, just trying to find logics behind local customs. Also remember, that there is no welfare state in Africa). As for the house, it is able to withstand long periods of heavy rain without any leakage despite being made from wooden branches, grass and cow manure.

I would be the last person to speak against progress and innovation and this article is not meant to defend the traditional ways of doing things. It is to remind us that everything is happening in a certain way for a reason and before trying to change it, we should understand what that reason is. Having understood it, we will be in a better position to judge if there is a better way of doing things and in determining what that way is.

>One of my first blog posts was about the importance of listening with a genuine desire to understand what the other person is trying to tell you. I now had follow up conversation on this with my friend Freddie from Uganda.

The key take away is that when deciding for how long we should be listening to others before proceeding to giving our point of view there are two key questions to answer.

The first one is how much time should I take to listen to others in order to fully understand what they are saying. This is quite an obvious one. The second one is less obvious and I honestly have not thought about it before. It is how much time should I take to listen to the other person so that he/she gets an impression that I have listened long enough. Sometimes we think (correctly or not) that we got what the other person is saying but he/she might be thinking that we could not have understood it yet. Then we need to listen for a bit longer otherwise the person will think that we do not care about what he/she is saying and will disregard our comments. This is very cultural but especially in Africa it is from my experience a very useful concept to consider and apply.

>Freddie, my friend from Uganda told me a great thing when we were at the Kenyan coast together. We were a group of 10 people from various countries and were having some great discussions. Some of them got quite fast paced as we were very passionate about the topics. And then Freddie, who was listening to us for a while, came to me and told me about the benefits of being like a teacher.

A teacher has an audience of kids that all learn things at a different pace. She has to be patient and take the time to explain the topic to all kinds otherwise part of the class will not be able to participate and will not be able to do what the teacher is asking them to do. It is the same with travelling across different cultures. You have to understand that not all people get things as quickly as you and you have to adjust your pace.

Taking time often results in getting a better answer. Be it because of a language barrier, lack of knowledge of the particular topic or simply an inability to think critically (from my experience the type of education one received has a huge influence on this) people often get stressed and just say yes or are unable to respond. Take your time and you will get a better answer.

>I am now in Nairobi, a great and vibrant city, but one of it’s nicknames is Nairoberry (my backpack with a camera got stolen already). Yesterday, I had a great chat about the security situation here with one friend who has been here for 12 weeks already. She told me that it is a very safe place if you do not break the rules.

In the main header of my blog I wrote that life is game and that it has it’s rules. My stay in Nairobi is a game as well and I broke one of it’s rules. I put the backpack next to my chair instead of having it on my lap while eating out. It was not the Kenyan’s who broke a rule by stealing my backpack it was me breaking a rule that you never keep your things out of sight here.

It is a very simple and powerful idea that can be applied to anything. Always get to know the local rules and be willing to follow them. The final takeaway is that the locals never break rules. It is their game and as a visitor, you have to play it. If you break any rule, you might get punished. In which case it is not the local people being bad or treating you unfairly, it is you breaking a local rule.

Here are some other rules I have Iearned here so far:
- look confident and that you know what you are doing
- walk fast on the streets, focused on where you are going and do not look people in the eyes (unless you want to speak to them in which case do so all the time)
- always bargain and offer either a bit less than what it usually costs or one third of what they quote you. Do not be afraid to walk away from an offer
- take time to ask questions, speak slowly. Do not ask yes/no questions because answer to those will always be Yes, ok, no problem…

I saw these couple lines by Dey Dos recently. They are so true!

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>I am now reading a book called Start Up Nation about innovation and entrepreneurship in Israel and I found there a nice quote by George Bernard Shaw.

‘If you have an apple and I have an apple and we exchange apples, then you and I will have an apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.’

>I recently discovered the podcasts section in iTunes and started downloading all sorts of talks and lectures. One of the best ones I have heard so far is a talk called What Great Leaders do by Bob Sutton as part of the Stanford Technology Lectures – Entrepreneurial Though Leaders podcast.

Bob summarises there his book called Good Boss, Bad Boss and in just over half an hour talks us through qualities of both kind of bosses. It is great for anybody thinking about moving into leadership roles or as a call for reflection for those already being bosses. I could certainly relate to a lot of his points from my experience of leading AIESEC UK.

I will let you listen to it yourselves but the three points I liked the most were:

- Good boss acts on his/her intuition as if it was a fact but is open to listening and when new piece of information comes in that proves he is wrong he is willing to change his/her position.

- Good bosses allow and foster what he calls a loving conflict. That seems to be taken a bit from Good to Great by Jim Collins but what it is basically about is that it is all right to have conflicts as long as they are open, do not get personal and finish up constructively for benefit of the team/organization.

- The final one I want to mention is when he actually builds on Good to Great’s concept of great organisations having a BHAG (a Big Hairy Audacious Goal – that is a statement which sets an ambition for the company for the next 20-30 years and which looks almost impossible to achieve without strong determination and a bit of hubris). Bob says that BHAGs freak people out and suggest that the best way to overcome this feeling is to break it into small and tangible steps which can be achieved quickly and create a sense of success to get the organisation moving towards achieving it’s BHAG.

All in all, you would have probably heard most of the things Bob talks about before (and he himself acknowledges that this book is his take on the topics having read lots of various journal articles) but he summarises them very well and they are so important that you should hear them again anyways if you want to be/are managing others.

You can find it here: http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=80867514