Human beings aren’t machines that follow a simple logic. The same thinking used for designing a car cannot be used for designing a society. We are a complex system where the rules change according to context. And we follow a much more evolved form of logic called psycho-logic.
Rory Sutherland starts his book Alchemy with a fascinating insight.
Suppose you are an entrepreneur who has to create a product that will have to rival the giant Coca-Cola, what would you do?
Most likely you’ll think of something like: “This drink should taste nicer than Coke, cost less than Coke, and come in a big bottle so that people get great value for money.”
Basically, this drink should be tastier yet cheaper. And this makes complete logical sense. Your board members would definitely agree with you.
Unless you were trolling you would never say something like: “Let’s market an expensive drink that comes in a tiny can…and tastes disgusting.”
Yet, that is exactly what one company did.
In customer trials, people said, “I wouldn’t drink this piss even if you paid me to.” And yet, Red Bull has sold enough cans to rival Coca-Cola and fund a Formula 1 team on the side. If you’ve ever tasted Red Bull, you would not disagree with the customer trials.
This is an interesting story. But there are not many stories like this because most businesses treat human beings in a simplistic way. They assume that all people want things to be better and cheaper. This is only partially true.
What you have to understand is that human beings aren’t logical machines. The logic of a machine doesn’t change. But the logic and decision of a person depends more on the context than any universal rule. In other words, it’s marred with exceptions.
Since logic makes sense in the physical sciences, we believe it must be applicable everywhere—even in the messy affairs of human psychology. But what most decision makers don’t understand is that unlike machines, human beings are highly complex beings. As Rory Sutherland writes, “The human mind does not run on logic any more than a horse runs on petrol.”
Logic maybe the best way to succeed in an argument or a board meeting. But if you want to have an edge in business and in life, logic is not very useful. As much as economists would want us to believe, human beings don’t run on logic. They run on psycho-logic.
Let’s take an example to understand this better. Why do you think we brush our teeth every day? If you say it is to preserve dental health and reduce cavities and decay, why do you think all toothpastes are mint flavoured?
Being rational has its limits. If I ask you to explain something, you may give a plausible-sounding answer that may seem rational, but may not be the real answer. So yes, dental health isn’t the only reason why people brush every day.
In a designed system, such as a machine, one thing usually serves only one narrow purpose. But in an evolved and complex system such as human behaviour, things can have multiple uses depending on the context within which they are viewed.
We brush our teeth so that they look clean when we smile, so that our mouth feels fresh (with a minty tingling sensation), and so that there’s no bad breath when we talk. Dental health is important, but it’s the least important. This chain of reasoning is purely psycho-logical. Businesses that understand this know how to take advantage of this and create magic. Why else do you think they named a toothpaste “Close-Up” and made it gel-based?
Real life is not a conventional science. The kind of thinking that works so well while designing a car does not work so well while designing a customer experience. The rules of human behaviour have many exceptions. For example, offering people money when they do something for you makes perfect sense but paying your friends for hanging out with you is the rudest thing you can ever do.
In theory, you can’t be too logical, but in practice, you can. Yet, we never seem to believe that it is possible for logical solutions to fail. After all, if it makes sense logically, how can it possibly be wrong?
Rory Sutherland writes, “Logic is what makes a successful engineer or mathematician, but psycho-logic is what has made us a successful breed of monkey, that has survived and flourished over time. This alternative logic emerges from a parallel operating system within the human mind, which often operates unconsciously, and is far more powerful and pervasive than you realise.”
You need psycho-logical solutions to solve human problems because human behaviour is logic-proof. Most political, business, foreign policy, and marital problems are psycho-logical problems. There’s no one-formula for solving them and more than often you aren’t sure how you solved them even after you do.
So, what you need is experimentation and a lot of trial to error to detect which patterns work. It’s easier to understand what works than why it works. Knowing why something works is good, but definitely not a prerequisite.
Aspirin, for instance, was known to work as an analgesic for decades before anyone knew why it worked. It was a discovery made by experience and only much later was it explained. Such must be the approach while dealing with human behaviour as well. A reason-first-discovery-later methodology that is practised by policy- and business decision-makers is wasteful in the extreme. Not knowing why something works shouldn’t deter something from working.
Evolution, as a process, discovers through trial and error what can survive in a world where some things are predictable, but others aren’t. It works because each gene reaps the rewards and costs from its lucky or unlucky experiments. Evolution works, but it doesn’t give a damn about why it works.
The simple lesson is this: a plausible why should not always be a prerequisite in deciding a what when it comes to dealing with human behaviour. A better approach is to try a few experiments, detect the patterns, understand the contexts in which they work, and apply psycho-logic. This creates magic—that moment when you feel, “It just works.” Apple products are a good example.
Rory Sutherland calls this process alchemy—the science of knowing what pure logic is wrong about. He writes, “The trick to being an alchemist lies not in understanding universal laws, but in spotting the many instances where those laws do not apply. It lies not in narrow logic, but in the equally important skill of knowing when and how to abandon it. This is why alchemy is more valuable today than ever.”
We think we are rational creatures. Economics and business rely on the assumption that we make logical decisions based on evidence.
But we aren’t, and we don’t.