Thinking Differently About Complex Leadership Issues

Pam Harper (00:00): What can top leaders gain from the books “Think Like a Freak” and “Predictably Irrational?” Paired together, they not only complement each other, they’re even more relevant. Join us for our special series of book pairing quick takes on Growth Igniters Radio with Pam Harper and Scott Harper.

Chris Curran (00:27): This episode is brought to you by Business Advancement Incorporated -- enabling successful leaders and companies to accelerate to their next level of success. on the web at businessadvance.com. And now, here's Pam and Scott.

Pam Harper (00:44): Welcome everyone. I'm Pam Harper, founding partner and CEO of Business Advancement Incorporated. And sitting right across from me as always is my business partner and husband, Scott Harper.

Scott Harper (00:57): Hi everybody. It's great to join you again. And as always, our purpose here is to spark new insights, inspiration, and immediately useful ideas that can help visionary leaders accelerate themselves -- and their companies -- to their next level of game-changing innovation, transformation and growth.

Pam Harper (01:16): Between now and the beginning of the new year, Scott and I are featuring quick take episodes, pairing some of our all time favorite business books -- a special series we call "book pairings from Pam Scott's bookshelf." Like a wine pairing or beer pairing, book pairings can provide you with new perspectives that can produce entirely new insights. Let’s get going.

Pam Harper (01:46): The first pair of books that we’re recommending challenges us to think differently about why people make decisions and behave the way that they do, otherwise known as behavioral economics.

Scott Harper (01:58): Behavioral economics is a branch of microeconomics where we’re really dealing with individuals making decisions, and they don’t always seem to make sense, but there’s always a reason.

Pam Harper (02:11): And we see this in real life all the time.

Scott Harper (02:13): Oh, all the time.

Pam Harper (02:14): So I think you have one you're going to talk about first.

Scott Harper (02:16): I do. One I just finished, actually, and really enjoyed. It’s [art of the Freakonomics series − Think Like A Freak by Steven D. Levitt and Stephen J. Dubner. They wrote Freakonomics a few years ago, then SuperFreakonomics, and now Think Like A Freak. I like this one because it’s just a little bit more practical.

Pam Harper (02:46): Okay, wait a moment. Before we go too much into that, what is the basic premise of Freakonomics? Why do I care if I think like a freak?

Scott Harper (02:46): It’s really challenging convention, challenging assumptions. So many times we think we know what an answer is or we think we know why somebody does something, but that may not be.

Pam Harper (02:59): So what's an example ot this?

Scott Harper (03:00): An example is incentives. They talk a lot about incentives, being economists. For example you can say, “Well, you know what, I want you to get better grades, so I’m going to pay you to get better grades.” What happens? You may take really easy courses so you’ll get better grades and get more money.

Pam Harper (03:22): So let's take it into the Freakonomics tagline, "The hidden side of everything."

Scott Harper (03:32): The hidden side of everything. So what Think Like a Freak does is it tells stories like Freakonomics does, and then they delve into the hidden side.

Scott Harper (03:45): So for instance, one of the stories they tell and think like a freak is about David Lee Roth, who used to have very complex contracts and riders for when they were doing concerts. And one of the riders, one of the stipulations was, "we need M&Ms in the dressing room, but no brown ones. Well, people thought that was just stupid diva behavior, but years later it came out that they did that because they had a very complex setup. It was dangerous, some of the equipment, and they wanted to make sure people were paying attention to the details. So if they went and they saw Brown M&Ms in the dressing room, they said, "ah, these people aren't paying attention. We better do a extra special safety check." So they were using behavior to get into people's heads in ways that the people had no idea.

Pam Harper (04:36): Now that's really interesting. Now assume I'm a CEO. I want to know what those brown and M&Ms have to do with me leading my company to that next level of success that I want to get to.

Scott Harper (04:49): Well, very frequently when we come into work with clients, they say "we have a challenge or we have something we want done. We want people to do things. So we should have a reward system." Or "we think that we know why people are doing this dysfunctional stuff. We're having fights between these two departments and they need interpersonal skills training." Well, not necessarily. One of the premises of think like a freak is to look beyond the surface.

Pam Harper (05:21): Look beyond the surface. Look for root causes. We say that a lot. You have to look beyond what you see. And Freakonomics and Think Like a Freak especially, is a great way to train your brain to think and look at things differently and look beyond the surface.

Pam Harper (05:41): That sounds good. Let's talk about the next one. And this one is "Predictably Irrational" by Dan Ariely. I especially like this book because so much of what we see out there doesn't seem to make sense. And what Dan Ariely says is that there's always a reason why people do things. And I think there's a nice pairing between these two books.

Scott Harper (06:11): Well, that's right,

Pam Harper (06:12): Because you have to look beyond the surface and you have to look − as Ariely says − you have to look at the patterns. If people are doing things that don’t make sense, there’s always a reason. I like to say that. He says it a little differently, but it’s that same message. You have to think, “Okay, there are certain things that you can predict that would not seem to make sense.”

Scott Harper (06:37): Well, it doesn't make rational sense, but if you get down into it, it makes sense. For instance, say you're dealing with social norms -- you talk about informal culture and company cultures all the time.

Pam Harper (06:51): That's right. In my own book, I talk about these kinds of things. Social norms often don’t make sense. I remember going in to one company and the most powerful person in the whole company was giving out the stapler. Now, that does not make sense. Yet it did, because this person had a lot of control over a number of other supplies that were the most important things for people to get their work done in this particular company at that particular time.

Scott Harper (07:25): So this person was exercising power by controlling what seemed like trivial resources.

Pam Harper (07:30): Right. So I think that when you read books like Predictably Irrational and Think Like a Freak, and you think about behavioral economics, then you have a different framework to think about a lot of what any leader comes up against.

Scott Harper (07:48): Well, that's true. And what really is useful for me is when I look at books like this, is to read the stories that they have in the book and then sit back and superimpose that upon stuff that we have dealt with or are dealing with and say, "Okay, here's an issue that is sort of weird. What's underneath it? What are the incentives? What are the hidden incentives for people doing things the way they do?"

Pam Harper (08:13): Before you treat the symptom, look for the cause.

Scott Harper (08:16): Look for the cause. That's right.

Pam Harper (08:18): And look for a new way to encourage what you're looking for.

Scott Harper (08:21): That's right. And so these two books very much work on that.

Scott Harper (08:30): That's our quick take book pairing for today. Thanks to you out there for listening to Growth Ignites Radio with Pam Harper and Scott Harper.

Pam Harper (08:37): If you are enjoying this podcast episode, spread the good word, open Growth Igniters Radio on whatever podcast app you use, and write a review.

Scott Harper (08:47): And to find out more about our strategic growth advisory services, learn about Pam's latest keynote speech and access our full podcast archive, go to businessadvance.com.

Pam Harper (08:59): Until next time, this is Pam Harper...

Scott Harper (09:01): And Scott Harper...

Pam Harper (09:02): Wishing you continued success and a happy, healthy, and prosperous new year.

Chris Curran (09:16): Growth Igniters and Growth Igniters Radio with Pam Harper and Scott Harper are registered service marks of Business Advancement Incorporated. All Growth Igniters Radio episodes are copyrighted Productions of Business Advancement Incorporated, intended for the private use of our audience, except as otherwise provided by copyright law. All other uses, including copying, editing, redistribution, and publication without prior written consent of Business Advancement Incorporated are prohibited. All rights reserved.