It started with a business model workshop for social enterprise run by innovation expert, Suhit Anantula. I left the day with a few stubborn messages in my head – which told me that the day was time well spent. We worked off the business model canvas and focused particularly on the triad between my value proposition, what my customer needs and how revenue would flow from the matching of value with needs.
I know a lot about the players in an energy transition space but I am not particularly good at putting my finger on what they would be willing to take a risk on and possibly pay for. I clearly have some work to do. To make the exercise easier, I thought I would focus on a favourite organisation of mine, CORENA. I am hoping to join the CORENA management committee and at the AGM tomorrow night I’m running an exercise on taking CORENA to the next level. Most of the feedback from members so far relates to appealing to donors and reaching donors and I’m thinking the business model frame will fit quite well. Particularly the parts about defining our customers, finding channels to reach them, building relationships with them and understanding our value proposition from their perspective. This 4 minute video hones in on the customer perspective bit:
And that brings me to the real content of this post – my recent reading of ‘think like a freak’, which I enjoyed, which covered a range of stories I have already listened to on Freakonomics radio AND which reminded me once again that people don’t behave like you expect them to. I have read numerous articles and books on this latter point, on the science of Influence (Robert Cialdini) on the motivations of individuals etc. But this week was the right time to take the customer / donor frame and place it squarely next to the question – what do they really want? No – what do they really need, what will really make them act?.
The book’s main theme is that we should all make claims and decisions based on data that supports our case, as opposed to many of the things we are led to believe in life where the data points the other way. So here are a few takeaways from the book for you to ponder:
- Learn to say “I don’t know”. We have been trained from childhood to avoid admitting our ignorance but admitting that you don’t know is actually a key act to helping yourself to find out and will improve your credibility in the long run. Experts can be notoriously bad at forecasting and we need to experiment in order to learn.
- Tackle manageable problems and don’t be afraid to define them differently to gain alternative perspectives on what you are trying to solve – even to get to the root cause. Your mind can be your biggest limitation so don’t let the status quo create limits on how you tackle the problem or where the answers could lie.
- Children do this well because they don’t have the strong preconceptions that adults do. In ‘think like a child’, the authors advocate for asking obvious questions, having fun and shedding preconceived ideas (and pretense).
- Then we move to incentives – and freakonomics is all about incentives as the basic measure of what motivates someone to act:
- people aren’t motivated in the same way – it is too easy and often wrong to assume that others will see the world my way. (and while I know that, I need to be reminded)
- declared preferences are often different from revealed preferences. (what people say is important doesn’t always match with where they spend their money/time/effort.
- some people will game a system
- some people will read a message differently from the way you intend it.
- The authors include an interesting case study of a charity that offered to never ask for a donation again on the theory that one motive to act is that donors feel socially pressured to give. This gave the donor control over the relationship and may have even adjusted the frame. I was quite intrigued to think about the customer/provider relationship in terms of frames:
- The financial framework which tends to limit our relationship to a value for money one.
- The us vs them framework which may work for your sports team, political flavour and other tribes you belong to.
- The loved one framework defines the rules of transactions between family and friends (and, as you know, is quite different from financial transactions even when the services on offer have a value in the market – eg cooking someone dinner or driving them to the airport)
- and finally the ‘authority figure’ framework.
For the record here are the authors’ rules for designing incentives:
- figure our what people really care about, not what they say they care about. (The value proposition canvas in the video above suggests thinking about their pain, the gains they would love to have and the jobs they need to do)
- incentivise them on the dimensions that are valuable to them and worth providing for you
- pay attention to how people respond – if they surprise or frustrate you, learn from it and try something different.
- whenever possible, provide incentives that switch the frame from adversarial to cooperative.
- never think people will do something just because it is the right thing to do.
- know that some people will try to game the system – applaud their ingenuity, if only to keep yourself sane.
In the last three chapters the book explores some of the HOW.
Designing a communication that distinguishes those you want can be effective. One theory is that the Nigerian scam emails deliberately mention Nigeria because they want to filter out everyone but the most gullible. King Solomon offered to chop a baby in half – the ruse allowing him to distinguish its real mother from a pretender (the real mother offered the baby to the other woman to avoid having it killed). David Lee Roth insisted that M&M’s in the dressing room didn’t have brown ones, in order to understand if performance venues had read all the other requirements too and hence set up for the show correctly.
Understanding that we are all bad at quitting can give you a head start on moving away from a bad initiative early on. Fail fast and fail cheap is the mantra. Instead most of us take pride in not failing – and therefore push on, long past the sensible abandonment point. We don’t like the idea of sunk costs, so the more we invest, the more we are loathe to quit and finally, we do a poor job of evaluating the opportunity cost. Those things we could do instead, if we are prepared to quite something that isn’t going so well.
Finally – I think it’s worth repeating the rules for persuading others. Thinking like a freak apparently makes you unpopular – going against conventional wisdom, peddling statistics etc. So if you really want to make a difference with unpopular truths it is worth understanding that it will be hard work.
- It’s not me, it’s you – I might create the argument but the only vote that counts is the person who stands to be persuaded (or not)
- Don’t pretend your argument is perfect – acknowledging nuance and issues that don’t support your argument makes you more trustworthy
- Acknowledge the strength of the other persons argument and if possible use the issue they highlight as important in your own frame.
- Don’t use insults – them, their argument, their tribe – game over, you lose
- Tell persuasive stories, not one dimensional anecdotes, fact filled stories.
I hope there’s something useful here for you all and if you like to indulge in an exploration of data and interesting insight I do recommend a read of the book or a listen to their podcasts.