When the Heart Wins

September 11th, 2014

Heartand mindIn the balance of hearts and minds, which should win? It’s one of the oldest questions in persuasion; Aristotle drew the distinction between logos, which appeals to the mind, and pathos and ethos on the other. His contention was that ethos is the strongest of the three, which put him on the side of the heart.

In more modern parlance, we can view it as the difference between Daniel Kahneman’s distinctions between fast System 1 thinking and slow System 2 thinking.

A central theme of this blog is that content is king: the most persuasive and sustainable arguments are those built from sound logic and verifiable facts. One way of looking at it is that in the battle of hearts and minds, the mind should win. Another way is that need should trump want in influencing others’ decisions. Calm deliberation, judgment and careful weighing of pros and cons should lead to better and smarter decisions, which is especially necessary when you’re making decisions with momentous consequences in terms of money and even lives.

But the reality is that there is often a vast gulf between should and do, and even big decisions can be swayed by appealing to the heart.

A famous quote attributed to Josef Stalin is, “A single death is a tragedy; a million deaths is a statistic.” We saw that played out last night as President Obama addressed the nation about the need to step up military action against ISIL forces in Iraq. A few short months ago, the idea of getting entangled in Iraq again would have been unthinkable; now it is almost unthinkable not to. Before the President’s speech, ABC News reported that 91% (!) of Americans supported increased military action in Iraq.

Why has public opinion changed so fast and so radically? I don’t believe it’s the statistics of the horrifically high death toll from the Syrian civil war – that’s been going on for three years and has claimed an estimated 190,000 lives. But none of those lives distracted our attention long enough to care, until two American hostages died. And it’s not their deaths that galvanized us, it’s the way they died, in revolting and public fashion.

Of course there are very sound geopolitical reasons to get involved to stop the spread of the ISIL “caliphate”, including denying a territorial base that can be used for terrorist attacks, and further destabilization of a volatile and critical region of the world. But those reasons existed before Foley and Sotloff lost their lives. The justification was there, but the drive was not. Without an appeal to the heart, those reasons would not have been enough to drive action.

It’s important not to take this too far. The emotional side attracts so much attention that it’s easy to forget that there has to be a strong logical justification underlying it. As I’ve written before, you can sell the sizzle all you want, but if the steak turns out to be crappy, no one wins. Effective and ethical persuasion requires an appropriate balance between the heart and the mind.

But no matter how smart and rational your idea is, no matter how eloquently you can explain your reasoning, logic will only get you as far as agreement. If you want action, you must appeal to the heart.

The Greatest Salesman You Never Heard Of

August 26th, 2014
Think you can sell? Try this!

Think you can sell? Try this!

When one of America’s greatest salesmen and entrepreneurs launched his career, it was announced in the press by the Boston newspaper in 1806, under the following story: “No Joke. A vessel with a cargo of 80 tons of ice has cleared out from this port for Martinique. We hope this will not prove to be a slippery speculation.”

A young man named Frederic Tudor was testing an idea that was suggested to him at a party the previous summer, when he was enjoying a drink cooled by ice stored in an icehouse during the winter before.

Tudor came from a well-to-do Boston family, and was the first of his brothers not to attend Harvard College. Instead, he went to work at age 13, but he was not destined to work for a salary. At the age of 21 he got the crazy idea that he could cut blocks of ice from ponds surrounding Boston and ship it to the Caribbean.

His first stop was Martinique, then under French control. He had sent his brother William ahead to try to secure a monopoly, which he achieved by bribing a secretary, but William otherwise did little to prepare for the arrival of the first shipment. Martinique did not work out so well, but the experience he gained there helped him establish a market in Cuba. In the ensuing years he set up markets in Charleston, New Orleans, and Savannah, with various levels of success.

When he embarked on his enterprise, Tudor began a notebook, and his first entry read:

“He who gives back at the first repulse and without striking the second blow despairs of success has never been, is not and never will be, a hero in war, love, or business.”

These were brave words, but it almost did prove to be a slippery speculation and if he knew then how much he was going to need that mindset, he may have stuck to working for someone else. Plagued by bad partners, occasional poor judgment, debtor’s prison, and the little matter of the War of 1812, he struggled for almost 20 years before he finally became consistently successful. In those days, when you couldn’t pay your creditors you were thrown in jail until your friends and relatives could raise the money to get you out. At one point, Tudor was sitting in a jail cell until his friends could raise the money to have him released; as he contemplated his surroundings, he wrote: “I smiled to think that anyone should believe I was beaten.”

In the end, he finally overcame all obstacles and became wealthy, selling an item that at home was at best a commodity and at worst a nuisance. He sold ice as far abroad as Calcutta and Bombay and became known as The Ice King. By the time of Tudor’s death in 1864, ice exporting had become a hugely successful global business. From the first shipment of 130 tons in 1806, the trade grew to 146,000 tons in 1856.

Unquestionably, Tudor’s perseverance and grit were critical factors in his success. But it was his selling approach that finally made him successful. Tudor’s main selling challenge was to transform ice from a novelty item into a necessity. How did he do it? He demonstrated remarkably sophisticated sales techniques that we would recognize today. Although he might have benefited from a little more tact, his example of insight selling in Martinique two centuries before its time is worth quoting at length:

“The man who keeps the Tivoli garden insisted ice creams could not be made in this country & that the ice itself would all thaw before he could get it home! …so putting my fist down pretty hard upon the table I called for a pen & ink. I wrote an order for 60 lbs. of ice & in a pretty warm tone directed the man to have his cream ready & that I would come & freeze it for him in the morning which I did accordingly being determined to spare no pains to convince these people that they can not only have ice but all the luxuries arising as well here as elsewhere. The Tivoli man recd. for these creams the first night $300 – after this he was as humble as a mushroom & shrugging up his shoulders said he knew nothing hoped monsieur would take some coffee – some liqueurs. ‘Devil take your coffee.’ Said I & came home.”

But his main customers were the coffee-house keepers, and he showed a deep understanding of his their business success factors by insisting that bartenders not charge a premium for adding ice to drinks. By holding the price steady for a superior offering, they could draw business away from other bars in town, which in turn clamored to become customers in the next season. Even better, the bar patrons became hooked on cold drinks. Tudor estimated that it took about three years in a location to establish the cold-drink habit.

He also had to educate consumers. At his first stop in Martinique, he complained that customers bought the ice and took it home without insulation, and then returned to complain that it had melted in the tropical heat! He had to explain that they had to insulate it in blankets, and then sold them the blankets at $1 each. Tudor also developed a “little icehouse” for the home which ran on three pounds of ice per day and ensured constant demand.

Tudor was constantly innovating. He came up with an idea for a cooling jar which allowed bartenders to produce more cold water cheaply; he experimented with different ways to build icehouses; he tinkered with better ship designs. On the production side, his employee Andrew Wyeth devised better methods of cutting the ice from the New England ponds, which improved efficiencies and standardized block sizes.

With perseverance, innovation, and customer insight, Frederic Tudor single-handedly created a lucrative industry using sales practices that were way ahead of their time. He truly was one of the great salesmen in American history.

Tudor deserves to be better remembered, and the best part of this story is that Tudor Ice is making a revival. The modern-day inheritors of the Tudor Ice company are setting out to prove that you can sell a commodity at a premium…but that’s a story for a future article.

Note:

If you want to learn more about Tudor’s remarkable career, here are two valuable sources:

The Ice King: Frederic Tudor and His Circle, by Carl Seaburg and Stanley Patterson

Crystal Blocks of Yankee Coldness, Philip Smith

Calibration: How Well Do You Know What You Know?

August 18th, 2014
Measure twice, speak once

Measure twice, speak once

To know that we know what we know and that we do not know what we do not know, that is true knowledge.[1]

                Confucius

If you could know – and prove – beyond a reasonable doubt that everything you say or write is true, you would quickly become immensely credible. You would also probably live on another planet.

Credibility is nothing but the probability estimate that others form when deciding whether to rely on what you tell them. You’re credible when they assume a reasonably high probability that what you say is correct.

But even though credibility is something that others assign to you, it has to begin with your own probability estimate. Any time you utter something controversial, you put your personal credibility at risk. It may be a slight risk, as when you tell someone they would probably like that new restaurant, or a huge risk, as when you passionately advocate a major investment for your company. So, you weigh the evidence in your mind, maybe carefully and analytically, or maybe intuitively, to figure out how certain you are before you decide whether to take the risk.

Since you can’t be sure of everything, the next best thing is to be able to accurately measure how sure you should be. For example, you may be 100% sure that the sun will rise tomorrow, but how sure are you that it will rain tomorrow, or that the project you’re proposing will cut costs in half? If you think it’s a high probability, you might estimate the chances at 80%. If you have no clue, your estimate would be 50%, if you think it’s possible but not probable, it might be 20%.

But here’s the rub. How accurate is your estimation of certainty? Calibration is a measure of the accuracy of your own probability estimate about what you believe to be true. It’s a measure of how closely your level of certainty accords to the true facts. If you are generally accurate, you’re said to be well-calibrated. If you’re over- or under-confident in your certainty, you are poorly calibrated.

Just as some people know more than others, some people are better calibrated than others. So, for example, in one of the simplest tests you may answer ten questions and if you’re 70% certain about each of your answers, you will get seven right if you’re well-calibrated, fewer than seven if you’re overconfident, and more than seven if you’re underconfident. Most people are overconfident; one study that gave a quiz to over 2000 people found that fewer than 1% were not overconfident.[2]

Overconfidence is not all bad – it encourages difficult efforts and can help you sell your ideas. It will tend to increase your credibility in a single situation, because listeners will take cues from your perceived confidence. Your level of certainty about what you’re saying will affect the confidence with which you express it, which will in turn affect how much listeners believe you.

But excessive overconfidence can definitely hurt your credibility by increasing the odds that you will be shown to be wrong. We all know people who are often wrong, but never in doubt – just watch any of the early stages of American Idol to see this overestimation displayed to a painful degree. In fact, studies have shown that the people with the least competence are the most likely to overestimate their actual knowledge. It’s called the Dunning-Kruger Effect[3]. Justin Kruger and David Dunning of Cornell University ran a study that measured subjects’ objective performance in tests of humor, grammar and logic, and found that those scoring in the bottom quartile were the most overconfident of their abilities; scoring on average in the 12th percentile, they rated themselves on average in the 62nd.

But there’s also an external aspect, which is others’ perceptions of how well-calibrated you are. If you’re well-calibrated, you are less likely to run ahead of your facts and get yourself into trouble, which is a good thing for long-term credibility.

Some very few people are underconfident in their estimate of certainty.[4] They are less sure of their knowledge, which certainly lowers the risk of being proven wrong, but also limits their influence. Their uncertainty may show through in their expression, or they may be less apt to speak up on behalf of their position or interests.

So, being well-calibrated will improve your credibility in two ways. First, it will help you avoid the extremes of over- and underconfidence. Second, by being perceived to be well-calibrated, or self-aware, you can be more credible to your listeners.

Because most people are overconfident, improved calibration will most likely cause you to dial back your confidence a little when you speak. Although it would seem that being tentative would lower your credibility, it depends on the situation. One area where perceptions of credibility have immediate and important consequences is in criminal trials, and researchers have found – in mock trials – that jury members are affected by how well-calibrated they perceive witnesses to be. Jury members were initially more likely to believe witnesses who expressed certainty about what they had seen than those who were less sure. But when their testimony was later shown to be wrong in a minor detail, the effects were reversed. The confident ones were seen as less credible, while the unsure ones were seen as more credible.

If you’re already seen as an expert, being a little less sure may help. Experts who express some uncertainty were found in one study to be seen as more credible than when they expressed certainty[5]. The author of the study ascribes this to the surprise factor that makes people pay closer attention to their message and hence be more influenced. But I think there may be a different explanation. Showing that you know you could be wrong makes you seem more self-aware (better calibrated) and open-minded, which plays better with educated audiences.

What’s the lesson we can draw from this? Don’t get ahead of your facts. Be transparent about your levels of confidence. When you’re unsure of something, say so. It will make you more credible when you say you’re sure.

How to improve your calibration

Calibration can be improved through training and experience. It begins with awareness of the problem and acceptance of the fact that you are probably susceptible to it. Here are a half-dozen ways to get better.

Test your calibration. ProjectionPoint has a test on their website that allows you to test your calibration. Simply seeing the results, if they are bad, will make you aware of the need to improve your calibration.

Separate fact from opinion. As Richard Feynman said, “The most important thing is not to fool yourself. And you’re the easiest person to fool.”

Keep track. Experience tends toreduce overconfidence and improve calibration, as long as you learn from that experience. It’s no accident that two of the best-calibrated professions are bookies and meteorologists. This is because they get rapid feedback on their decisions, and are held accountable for being wrong.

Be more foxy. As we saw previously, hedgehogs, who know one thing very well, tend to be less calibrated than foxes, who have more breadth of knowledge. He found that hedgehogs were not only wrong more often than foxes, but that they were less likely to recognize or admit that they were wrong when events did not match their predictions

Try not to make up your mind too quickly. Early judgments can serve as anchors, so that if you adjust your position in light of new information, you will probably not adjust as far. If you do, be on the lookout for confirmation bias, which is the general tendency to notice evidence that supports your view and be less apt to seek out or even notice contrary evidence. Follow Charles Darwin’s example:

“I had also, during many years, followed a golden rule, namely, that whenever a published fact, a new observation or thought came across me, which was opposed to my general results, to make a memorandum of it without fail and at once; for I had found by experience that such facts and thoughts were far more apt to escape from the memory than favourable ones.  Owing to this habit, very few objections were raised against my views which I had not at least noticed and attempted to answer.”

Practice productive paranoia. When you’re very confident and it’s important, try extra hard to find holes in your idea. Individually, you can take the time to list reasons why you might be wrong. With colleagues, you can conduct a PreMortem: imagine that it is some future time and your idea has failed, and try to figure out all the ways it could have happened.[6]

If you follow these six practices, I’m 90% confident that your calibration will improve, and 75% confident that your personal credibility will also.

 

[1] Quoted in “Managing Overconfidence, by J. Edward Russo and Paul J.H. Schoemaker, Sloan Management Review, Winter 1992.

[2] Russo and Schoemaker 1992.

[3] Kruger, Justin; David Dunning (1999). “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments”.

[4] Russo and Schoemaker say that public accountants are slightly underconfident.

[5] Experts Are More Persuasive When They’re Less Certain, Zakary Tormala, Harvard Business Review, March 2011.

[6] The term was coined (I believe) by Gary Klein, in his book, The Power of Intuition.

Listening Math

August 14th, 2014

Have you noticed that most of the training we need is about what we already know, but don’t do enough of? That’s certainly the case with listening skills. We all know how important listening is, but we all fall short of the level we’re capable of.

The interesting thing about listening skill is that we all can perform at top levels when we’re really, really motivated, so it’s not a question of knowing what to do; it’s about executing at the necessary level consistently.

If you think you’re a good listener, here’s some listening math to ponder:

50/25/10 A study showed that the average person remembers only 50% of what was said immediately after a 10 minute oral presentation. After 24 hours, the figure drops to 25%, and to 10% after a week. The first 50% is not a memory problem, it’s a listening problem, as anyone knows who hears a person’s name for the first time and “forgets” it ten seconds later.

 

500/125 In standard American spoken English, we speak at about 125 words per minute, but process words mentally at about 500 words per minute. I’m not sure how scientific the thinking speed measurement is, but it’s obvious that we can think much faster than others can speak. That’s why it’s so easy to get distracted while listening to someone else. We think we can listen and think about something else at the same time, but we’re actually rapidly switching back and forth – except when we forget to switch back.

 

583 The number of people killed when two 747s collided at Tenerife airport in 1977, caused primarily by a chain of listening errors and misunderstandings between pilots and air traffic control, and between pilots and copilots.

 

80/45 Those of us in business spend up to 80% of our waking hours in communicating almost half (45%) of our communication efforts consist of listening. There’s a lot of effectiveness left on the table if we’re not listening to our full potential.

 

43,8 The average length of a political sound bite on national news in 1968, and the average length in 1988. CBS News tried to counter this trend by mandating a minimum 30-second sound bite, but had to abandon the effort when people would not listen.

 

18 “That’s the average time it takes a doctor to interrupt you as you’re describing your symptoms. By that point, he/she has in mind what the answer is, and that answer is probably right about 80% of the time.”  Jerome Groopman, How Doctors Think

 

N = 1 One of the reasons that doctors (and possibly ourselves) tune out is that we think we’ve heard it all before. Maybe the other person needs advice with a problem, and it’s something we’re familiar with. Every conversation has a sample size of 1, because every person feels themselves unique, and maybe if we listen a little longer we may learn something new ourselves.

 

51+ This is a number I made up. 51+ represents the minimum level of responsibility you should take for your side of the conversation. When listening, don’t just passively take in the other’s words; meet them more than halfway and make sure you get their meaning. When talking, don’t assume that they got it just because you said it, make sure.