Rory Sutherland: prediction

Transcript context

…I love all these examples you're sharing of ways products stand out sometimes by accident, sometimes intentionally. If I were to zoom out and try to describe what you encourage people to do, you basically are intent on convincing people to think less logically, to think less rationally, which I think is pretty counterintuitive to a lot of people, especially in business where they're told, "Be more rational, be more logical." I think what it is psychology is a branch of complexity theory, and there are lots of things in it which are nonlinear butterfly effects, small things that have a huge effect, and there are also lots of things which are, if you like yin and yang. In other words, what I say is the opposite of a good idea can be another good idea. I always say there are two great ways to check into a hotel. One of them is insanely high touch and the other way is no touch. It'd be pretty cool to check into a hotel where basically you just walked in with your mobile phone and unlocked your room. That'd be pretty cool. It's also pretty cool if you go to the Mandarin Oriental in Hong Kong that they take you up to your room, show you how to use the television, the shower, I hope, because that's always a baffling thing and that actually make you a cup of tea in the room while you're filling out the paperwork at your vast desk. They're both pretty great ways to check into a hotel. They're complete opposites, but they are distinctive. I think understanding the fact that what we're trying to do is we're trying to run the world of business entirely to a reductionist kind of maths and physics and finance model where everything's linear and everything works in straight lines and everything's proportionate, and the opposite of a good idea is wrong, and the past is a fantastic guide to the future. We're basing our decision making on high school maths questions. It always bothers me by the way that intelligence tests are multiple choice. The SAT is a multiple choice in the US I think, aren't they? Very weirdly, a great aunt of mine actually, who spent some time in the US I think at Princeton, was actually involved with the guy who designed those early intelligence tests. By the way, she had her doubts. One of the things she commented on was that basically if they did an intelligence test in which white academics didn't come top, they rejected it as a measure of intelligence. So they found, for example, I think that Native Americans and African-Americans were, for instance, better at memorizing poetry than white people were, and all credit to my great aunt. They rejected this then as a measure of intelligence because it didn't fit their narrative. But the other thing that bothers me, I'm slightly proud of my great aunt for spotting this, calling this out as a bit of bullshit to be honest, but the other thing that always bothers me is that by definition, multiple choice questions have a single right answer. Theoretically, you could have multiple right answers and you simply have to choose one that is acceptable, but basically they've got a right answer and three wrong answers. That's how you do multiple choice questions. But real life decisions aren't like that. You can have multiple right answers, and also you don't have all the information you need to answer the question contained within the question. ice questions. But real life decisions aren't like that. You can have multiple right answers, and also you don't have all the information you need to answer the question contained within the question. And some of the information you have, which you think is important, is actually irrelevant to answering the question. So we have this when you look at those intelligence tests, SAT measures, IQ tests, they're all two buses leave a bus station, one travels due north. They all have an assumption of complete proportionality and linearity. The buses are all traveling in a straight line. You have to calculate what time it is when the buses are a hundred kilometers apart and there's a single right answer. And all the information in the question is germane to the answer that generally there isn't any extraneous information which you have to ignore. And there was a famous experiment actually, which I think originated in France where they said, "This ship stops, 27 goats get on, three sheep get off, then they add 25 cows. How old is the captain of the ship?" And what they found is actually pretty intelligent kids would not give the answer, "It is impossible to tell." They'd assume that the information in the question, because it's in the question, had to be of use in formulating the answer. And you can Google it because it then appeared in a Chinese school exam and it was a very interesting experiment done I think by a French philosopher or psychologist, which is what happens if you actually just give people a load of data and then you give them a question? Are they so habituated by high school questions to assume that what's in the question must therefore give you a single right answer? And this is exactly what happened. If you look at real life, i.e business decisions, which anything that involves human behavior, it's simply all those conditions that we are expected to look for in something when we call it scientific. None of those conditions are met, single right answer, proportionality, the scale of the input being proportionate to the scale of the effect, none of those things are met in real world decisions, and yet we select and promote people on their ability to perform those artificial activities.…

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