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TEDSalon London 2010

Rory Sutherland: Sweat the small stuff

April 19, 2010

It may seem that big problems require big solutions, but ad man Rory Sutherland says many flashy, expensive fixes are just obscuring better, simpler answers. To illustrate, he uses behavioral economics and hilarious examples.

Rory Sutherland - Advertising guru
Rory Sutherland stands at the center of an advertising revolution in brand identities, designing cutting-edge, interactive campaigns that blur the line between ad and entertainment. Full bio

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Double-click the English subtitles below to play the video.
Those of you who may remember me from TEDGlobal
00:15
remember me asking a few questions
00:17
which still preoccupy me.
00:19
One of them was: Why is it necessary to spend
00:21
six billion pounds
00:23
speeding up the Eurostar train
00:25
when, for about 10 percent of that money,
00:27
you could have top supermodels, male and female,
00:29
serving free Chateau Petrus to all the passengers
00:31
for the entire duration of the journey?
00:34
You'd still have five billion left in change,
00:36
and people would ask for the trains to be slowed down.
00:38
Now, you may remember me asking the question as well,
00:41
a very interesting observation,
00:43
that actually those strange little signs
00:45
that actually flash "35" at you,
00:47
occasionally accompanying a little smiley face
00:49
or a frown,
00:51
according to whether you're within or outside the speed limit --
00:53
those are actually more effective
00:56
at preventing road accidents than speed cameras,
00:58
which come with the actual threat
01:01
of real punishment.
01:03
So there seems to be a strange disproportionality at work,
01:05
I think, in many areas of human problem solving,
01:08
particularly those which involve human psychology,
01:11
which is: The tendency
01:14
of the organization or the institution
01:16
is to deploy as much force as possible,
01:18
as much compulsion as possible,
01:21
whereas actually, the tendency of the person
01:23
is to be almost influenced
01:25
in absolute reverse proportion
01:28
to the amount of force being applied.
01:30
So there seems to be a complete disconnect here.
01:33
So what I'm asking for is the creation of a new job title --
01:35
I'll come to this a little later --
01:37
and perhaps the addition of a new word
01:39
into the English language.
01:41
Because it does seem to me that large organizations
01:43
including government, which is, of course, the largest organization of all,
01:46
have actually become
01:49
completely disconnected
01:51
with what actually matters to people.
01:53
Let me give you one example of this.
01:55
You may remember this as the AOL-Time Warner merger, okay,
01:57
heralded at the time as the largest
02:01
single deal of all time.
02:03
It may still be, for all I know.
02:05
Now, all of you in this room, in one form or other,
02:07
are probably customers of one or both
02:09
of those organizations that merged.
02:11
Just interested, did anybody notice anything different
02:13
as a result of this at all?
02:16
So unless you happened to be a shareholder
02:18
of one or the other organizations
02:20
or one of the dealmakers or lawyers involved in the no-doubt lucrative activity,
02:22
you're actually engaging in a huge piece of activity
02:25
that meant absolutely bugger-all to anybody, okay?
02:28
By contrast, years of marketing have taught me
02:32
that if you actually want people to remember you
02:34
and to appreciate what you do,
02:37
the most potent things are actually very, very small.
02:39
This is from Virgin Atlantic upper-class,
02:42
it's the cruet salt and pepper set.
02:44
Quite nice in itself, they're little, sort of, airplane things.
02:46
What's really, really sweet is every single person looking at these things
02:49
has exactly the same mischievous thought,
02:52
which is, "I reckon I can heist these."
02:54
However, you pick them up and underneath,
02:57
actually engraved in the metal, are the words,
02:59
"Stolen from Virgin Atlantic Airways upper-class."
03:01
(Laughter)
03:04
Now, years after
03:06
you remember the strategic question
03:08
of whether you're flying in a 777 or an Airbus,
03:10
you remember those words and that experience.
03:13
Similarly, this is from a hotel in Stockholm, the Lydmar.
03:17
Has anybody stayed there?
03:19
It's the lift, it's a series of buttons in the lift.
03:21
Nothing unusual about that at all,
03:24
except that these are actually not the buttons that take you to an individual floor.
03:27
It starts with garage at the bottom, I suppose, appropriately,
03:30
but it doesn't go up garage, grand floor, mezzanine, one, two, three, four.
03:33
It actually says garage, funk, rhythm and blues.
03:36
You have a series of buttons. You actually choose your lift music.
03:40
My guess is that the cost of installing this in the lift
03:44
in the Lydmar Hotel in Stockholm
03:47
is probably 500 to 1,000 pounds max.
03:49
It's frankly more memorable
03:52
than all those millions of hotels we've all stayed at
03:54
that tell you that your room has actually been recently renovated
03:57
at a cost of 500,000 dollars,
04:00
in order to make it resemble every other hotel room you've ever stayed in
04:02
in the entire course of your life.
04:05
Now, these are trivial marketing examples, I accept.
04:09
But I was at a TED event recently and Esther Duflo,
04:12
probably one of the leading experts in,
04:15
effectively, the eradication of poverty in the developing world,
04:17
actually spoke.
04:19
And she came across a similar example
04:21
of something that fascinated me
04:23
as being something which, in a business context or a government context,
04:25
would simply be so trivial a solution
04:28
as to seem embarrassing.
04:30
It was simply to encourage the inoculation of children
04:32
by, not only making it a social event --
04:35
I think good use of behavioral economics in that,
04:37
if you turn up with several other mothers
04:39
to have your child inoculated,
04:41
your sense of confidence is much greater than if you turn up alone.
04:43
But secondly, to incentivize that inoculation
04:46
by giving a kilo of lentils to everybody who participated.
04:48
It's a tiny, tiny thing.
04:53
If you're a senior person at UNESCO
04:55
and someone says, "So what are you doing
04:58
to eradicate world poverty?"
05:00
you're not really confident standing up there
05:02
saying, "I've got it cracked; it's the lentils," are you?
05:04
Our own sense of self-aggrandizement
05:08
feels that big important problems
05:10
need to have big important, and most of all, expensive
05:12
solutions attached to them.
05:15
And yet, what behavioral economics shows time after time after time
05:18
is in human behavioral and behavioral change
05:21
there's a very, very strong disproportionality at work,
05:23
that actually what changes our behavior
05:26
and what changes our attitude to things
05:29
is not actually proportionate to the degree
05:31
of expense entailed,
05:33
or the degree of force that's applied.
05:35
But everything about institutions
05:38
makes them uncomfortable
05:40
with that disproportionality.
05:42
So what happens in an institution
05:44
is the very person who has the power to solve the problem
05:46
also has a very, very large budget.
05:49
And once you have a very, very large budget,
05:51
you actually look for expensive things to spend it on.
05:53
What is completely lacking is a class of people
05:57
who have immense amounts of power, but no money at all.
05:59
(Laughter)
06:02
It's those people I'd quite like to create
06:04
in the world going forward.
06:06
Now, here's another thing that happens,
06:08
which is what I call sometimes "Terminal 5 syndrome,"
06:10
which is that big, expensive things
06:12
get big, highly-intelligent attention,
06:14
and they're great, and Terminal 5 is absolutely magnificent,
06:17
until you get down to the small detail, the usability,
06:20
which is the signage,
06:22
which is catastrophic.
06:24
You come out of "Arrive" at the airport, and you follow
06:26
a big yellow sign that says "Trains" and it's in front of you.
06:28
So you walk for another hundred yards,
06:31
expecting perhaps another sign,
06:33
that might courteously be yellow, in front of you and saying "Trains."
06:35
No, no, no, the next one is actually blue, to your left,
06:38
and says "Heathrow Express."
06:40
I mean, it could almost be rather like that scene from the film "Airplane."
06:42
A yellow sign? That's exactly what they'll be expecting.
06:45
Actually, what happens in the world increasingly --
06:48
now, all credit to the British Airport Authority.
06:50
I spoke about this before,
06:52
and a brilliant person got in touch with me and said, "Okay, what can you do?"
06:54
So I did come up with five suggestions, which they are actually actioning.
06:57
One of them also being,
07:00
although logically it's quite a good idea
07:02
to have a lift with no up and down button in it,
07:04
if it only serves two floors,
07:06
it's actually bloody terrifying, okay?
07:08
Because when the door closes
07:11
and there's nothing for you to do,
07:13
you've actually just stepped into a Hammer film.
07:15
(Laughter)
07:17
So these questions ... what is happening in the world
07:19
is the big stuff, actually,
07:21
is done magnificently well.
07:23
But the small stuff, what you might call the user interface,
07:25
is done spectacularly badly.
07:28
But also, there seems to be a complete sort of gridlock
07:30
in terms of solving these small solutions.
07:33
Because the people who can actually solve them
07:36
actually are too powerful and too preoccupied
07:38
with something they think of as "strategy" to actually solve them.
07:40
I tried this exercise recently, talking about banking.
07:43
They said, "Can we do an advertising campaign?
07:45
What can we do and encourage more online banking?"
07:47
I said, "It's really, really easy."
07:50
I said, "When people login to their online bank
07:52
there are lots and lots of things they'd probably quite like to look at.
07:54
The last thing in the world you ever want to see is your balance."
07:57
I've got friends who actually
08:01
never use their own bank cash machines
08:03
because there's the risk that it might display
08:05
their balance on the screen.
08:07
Why would you willingly expose yourself to bad news?
08:09
Okay, you simply wouldn't.
08:12
I said, "If you make, actually, 'Tell me my balance.'
08:14
If you make that an option rather than the default,
08:16
you'll find twice as many people log on to online banking,
08:19
and they do it three times as often."
08:22
Let's face it, most of us -- how many of you
08:24
actually check your balance before you remove cash from a cash machine?
08:26
And you're pretty rich by the standards of the world at large.
08:30
Now, interesting that no single person does that,
08:33
or at least can admit to being so anal as to do it.
08:35
But what's interesting about that suggestion
08:39
was that, to implement that suggestion wouldn't cost 10 million pounds;
08:41
it wouldn't involve large amounts of expenditure;
08:44
it would actually cost about 50 quid.
08:46
And yet, it never happens.
08:48
Because there's a fundamental disconnect, as I said,
08:50
that actually, the people with the power
08:53
want to do big expensive things.
08:55
And there's to some extent a big strategy myth
08:57
that's prevalent in business now.
08:59
And if you think about it, it's very, very important
09:01
that the strategy myth is maintained.
09:03
Because, if the board of directors convince everybody
09:05
that the success of any organization
09:08
is almost entirely dependent on the decisions made by the board of directors,
09:10
it makes the disparity in salaries
09:13
slightly more justifiable
09:16
than if you actually acknowledge that quite a lot of the credit for a company's success
09:18
might actually lie somewhere else,
09:21
in small pieces of tactical activity.
09:23
But what is happening is that effectively --
09:26
and the invention of the spreadsheet hasn't helped this;
09:28
lots of things haven't helped this --
09:30
business and government suffers from a kind of physics envy.
09:32
It wants the world to be the kind of place where
09:35
the input and the change are proportionate.
09:38
It's a kind of mechanistic world
09:41
that we'd all love to live in
09:43
where, effectively, it sits very nicely on spreadsheets,
09:45
everything is numerically expressible,
09:48
and the amount you spend on something is proportionate
09:50
to the scale of your success.
09:53
That's the world people actually want.
09:55
In truth, we do live in a world that science can understand.
09:57
Unfortunately, the science is probably closer to being climatology
09:59
in that in many cases,
10:02
very, very small changes
10:04
can have disproportionately huge effects,
10:06
and equally, vast areas of activity, enormous mergers,
10:08
can actually accomplish absolutely bugger-all.
10:11
But it's very, very uncomfortable for us
10:15
to actually acknowledge that we're living in such a world.
10:17
But what I'm saying is we could just make things
10:20
a little bit better for ourselves
10:22
if we looked at it in this very simple four-way approach.
10:24
That is actually strategy, and I'm not denying that strategy has a role.
10:28
You know, there are cases where you spend quite a lot of money
10:31
and you accomplish quite a lot.
10:33
And I'd be wrong to dis that completely.
10:35
Moving over, we come, of course, to consultancy.
10:38
(Laughter)
10:40
I thought it was very indecent of Accenture
10:44
to ditch Tiger Woods in such
10:46
a sort of hurried and hasty way.
10:48
I mean, Tiger surely was actually obeying the Accenture model.
10:50
He developed an interesting outsourcing model for sexual services,
10:53
(Laughter)
10:56
no longer tied to a single monopoly provider,
10:58
in many cases, sourcing things locally,
11:01
and of course, the ability to have between one and three girls delivered at any time
11:04
led for better load-balancing.
11:07
So what Accenture suddenly found so unattractive about that, I'm not sure.
11:10
Then there are other things that don't cost much and achieve absolutely nothing.
11:13
That's called trivia.
11:16
But there's a fourth thing.
11:18
And the fundamental problem is we don't actually have a word for this stuff.
11:20
We don't know what to call it.
11:23
And actually we don't spend nearly enough money
11:25
looking for those things,
11:28
looking for those tiny things that may or may not work,
11:30
but which, if they do work,
11:33
can have a success absolutely out of proportion
11:35
to their expense, their efforts
11:37
and the disruption they cause.
11:39
So the first thing I'd like
11:41
is a competition -- to anybody watching this as a film --
11:43
is to come up with a name for that stuff on the bottom right.
11:45
And the second thing, I think,
11:48
is that the world needs to have people in charge of that.
11:50
That's why I call for the "Chief Detail Officer."
11:52
Every corporation should have one,
11:54
and every government should have a Ministry of Detail.
11:56
The people who actually have no money,
11:59
who have no extravagant budget,
12:01
but who realize that actually
12:03
you might achieve greater success in uptake
12:05
of a government program
12:07
by actually doubling the level of benefits you pay,
12:09
but you'll probably achieve exactly that same effect
12:11
simply by redesigning the form
12:14
and writing it in comprehensible English.
12:16
And if actually we created a Ministry of Detail
12:18
and business actually had Chief Detail Officers,
12:21
then that fourth quadrant,
12:23
which is so woefully neglected at the moment,
12:25
might finally get the attention it deserves.
12:27
Thank you very much.
12:29

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Rory Sutherland - Advertising guru
Rory Sutherland stands at the center of an advertising revolution in brand identities, designing cutting-edge, interactive campaigns that blur the line between ad and entertainment.

Why you should listen

From unlikely beginnings as a classics teacher to his current job as Vice Chairman of Ogilvy Group, Rory Sutherland has created his own brand of the Cinderella story. He joined Ogilvy & Mather's planning department in 1988, and became a junior copywriter, working on Microsoft's account in its pre-Windows days. An early fan of the Internet, he was among the first in the traditional ad world to see the potential in these relatively unknown technologies.

An immediate understanding of the possibilities of digital technology and the Internet powered Sutherland's meteoric rise. He continues to provide insight into advertising in the age of the Internet and social media through his blog at Campaign's Brand Republic site, his column "The Wiki Man" at The Spectator and his busy Twitter account.

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