TEDSalon London 2010
Rory Sutherland: Sweat the small stuff
Filmed:
Readability: 4.6
1,236,257 views
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
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
Double-click the English transcript below to play the video.
00:15
Those of you who may remember me from TEDGlobal
0
0
2000
00:17
remember me asking a few questions
1
2000
2000
00:19
which still preoccupy me.
2
4000
2000
00:21
One of them was: Why is it necessary to spend
3
6000
2000
00:23
six billion pounds
4
8000
2000
00:25
speeding up the Eurostar train
5
10000
2000
00:27
when, for about 10 percent of that money,
6
12000
2000
00:29
you could have top supermodels, male and female,
7
14000
2000
00:31
serving free Chateau Petrus to all the passengers
8
16000
3000
00:34
for the entire duration of the journey?
9
19000
2000
00:36
You'd still have five billion left in change,
10
21000
2000
00:38
and people would ask for the trains to be slowed down.
11
23000
3000
00:41
Now, you may remember me asking the question as well,
12
26000
2000
00:43
a very interesting observation,
13
28000
2000
00:45
that actually those strange little signs
14
30000
2000
00:47
that actually flash "35" at you,
15
32000
2000
00:49
occasionally accompanying a little smiley face
16
34000
2000
00:51
or a frown,
17
36000
2000
00:53
according to whether you're within or outside the speed limit --
18
38000
3000
00:56
those are actually more effective
19
41000
2000
00:58
at preventing road accidents than speed cameras,
20
43000
3000
01:01
which come with the actual threat
21
46000
2000
01:03
of real punishment.
22
48000
2000
01:05
So there seems to be a strange disproportionality at work,
23
50000
3000
01:08
I think, in many areas of human problem solving,
24
53000
3000
01:11
particularly those which involve human psychology,
25
56000
3000
01:14
which is: The tendency
26
59000
2000
01:16
of the organization or the institution
27
61000
2000
01:18
is to deploy as much force as possible,
28
63000
3000
01:21
as much compulsion as possible,
29
66000
2000
01:23
whereas actually, the tendency of the person
30
68000
2000
01:25
is to be almost influenced
31
70000
3000
01:28
in absolute reverse proportion
32
73000
2000
01:30
to the amount of force being applied.
33
75000
3000
01:33
So there seems to be a complete disconnect here.
34
78000
2000
01:35
So what I'm asking for is the creation of a new job title --
35
80000
2000
01:37
I'll come to this a little later --
36
82000
2000
01:39
and perhaps the addition of a new word
37
84000
2000
01:41
into the English language.
38
86000
2000
01:43
Because it does seem to me that large organizations
39
88000
3000
01:46
including government, which is, of course, the largest organization of all,
40
91000
3000
01:49
have actually become
41
94000
2000
01:51
completely disconnected
42
96000
2000
01:53
with what actually matters to people.
43
98000
2000
01:55
Let me give you one example of this.
44
100000
2000
01:57
You may remember this as the AOL-Time Warner merger, okay,
45
102000
3000
02:01
heralded at the time as the largest
46
106000
2000
02:03
single deal of all time.
47
108000
2000
02:05
It may still be, for all I know.
48
110000
2000
02:07
Now, all of you in this room, in one form or other,
49
112000
2000
02:09
are probably customers of one or both
50
114000
2000
02:11
of those organizations that merged.
51
116000
2000
02:13
Just interested, did anybody notice anything different
52
118000
3000
02:16
as a result of this at all?
53
121000
2000
02:18
So unless you happened to be a shareholder
54
123000
2000
02:20
of one or the other organizations
55
125000
2000
02:22
or one of the dealmakers or lawyers involved in the no-doubt lucrative activity,
56
127000
3000
02:25
you're actually engaging in a huge piece of activity
57
130000
3000
02:28
that meant absolutely bugger-all to anybody, okay?
58
133000
3000
02:32
By contrast, years of marketing have taught me
59
137000
2000
02:34
that if you actually want people to remember you
60
139000
3000
02:37
and to appreciate what you do,
61
142000
2000
02:39
the most potent things are actually very, very small.
62
144000
3000
02:42
This is from Virgin Atlantic upper-class,
63
147000
2000
02:44
it's the cruet salt and pepper set.
64
149000
2000
02:46
Quite nice in itself, they're little, sort of, airplane things.
65
151000
3000
02:49
What's really, really sweet is every single person looking at these things
66
154000
3000
02:52
has exactly the same mischievous thought,
67
157000
2000
02:54
which is, "I reckon I can heist these."
68
159000
3000
02:57
However, you pick them up and underneath,
69
162000
2000
02:59
actually engraved in the metal, are the words,
70
164000
2000
03:01
"Stolen from Virgin Atlantic Airways upper-class."
71
166000
3000
03:04
(Laughter)
72
169000
2000
03:06
Now, years after
73
171000
2000
03:08
you remember the strategic question
74
173000
2000
03:10
of whether you're flying in a 777 or an Airbus,
75
175000
3000
03:13
you remember those words and that experience.
76
178000
3000
03:17
Similarly, this is from a hotel in Stockholm, the Lydmar.
77
182000
2000
03:19
Has anybody stayed there?
78
184000
2000
03:21
It's the lift, it's a series of buttons in the lift.
79
186000
3000
03:24
Nothing unusual about that at all,
80
189000
3000
03:27
except that these are actually not the buttons that take you to an individual floor.
81
192000
3000
03:30
It starts with garage at the bottom, I suppose, appropriately,
82
195000
3000
03:33
but it doesn't go up garage, grand floor, mezzanine, one, two, three, four.
83
198000
3000
03:36
It actually says garage, funk, rhythm and blues.
84
201000
3000
03:40
You have a series of buttons. You actually choose your lift music.
85
205000
3000
03:44
My guess is that the cost of installing this in the lift
86
209000
3000
03:47
in the Lydmar Hotel in Stockholm
87
212000
2000
03:49
is probably 500 to 1,000 pounds max.
88
214000
3000
03:52
It's frankly more memorable
89
217000
2000
03:54
than all those millions of hotels we've all stayed at
90
219000
3000
03:57
that tell you that your room has actually been recently renovated
91
222000
3000
04:00
at a cost of 500,000 dollars,
92
225000
2000
04:02
in order to make it resemble every other hotel room you've ever stayed in
93
227000
3000
04:05
in the entire course of your life.
94
230000
3000
04:09
Now, these are trivial marketing examples, I accept.
95
234000
3000
04:12
But I was at a TED event recently and Esther Duflo,
96
237000
3000
04:15
probably one of the leading experts in,
97
240000
2000
04:17
effectively, the eradication of poverty in the developing world,
98
242000
2000
04:19
actually spoke.
99
244000
2000
04:21
And she came across a similar example
100
246000
2000
04:23
of something that fascinated me
101
248000
2000
04:25
as being something which, in a business context or a government context,
102
250000
3000
04:28
would simply be so trivial a solution
103
253000
2000
04:30
as to seem embarrassing.
104
255000
2000
04:32
It was simply to encourage the inoculation of children
105
257000
3000
04:35
by, not only making it a social event --
106
260000
2000
04:37
I think good use of behavioral economics in that,
107
262000
2000
04:39
if you turn up with several other mothers
108
264000
2000
04:41
to have your child inoculated,
109
266000
2000
04:43
your sense of confidence is much greater than if you turn up alone.
110
268000
3000
04:46
But secondly, to incentivize that inoculation
111
271000
2000
04:48
by giving a kilo of lentils to everybody who participated.
112
273000
3000
04:53
It's a tiny, tiny thing.
113
278000
2000
04:55
If you're a senior person at UNESCO
114
280000
3000
04:58
and someone says, "So what are you doing
115
283000
2000
05:00
to eradicate world poverty?"
116
285000
2000
05:02
you're not really confident standing up there
117
287000
2000
05:04
saying, "I've got it cracked; it's the lentils," are you?
118
289000
3000
05:08
Our own sense of self-aggrandizement
119
293000
2000
05:10
feels that big important problems
120
295000
2000
05:12
need to have big important, and most of all, expensive
121
297000
3000
05:15
solutions attached to them.
122
300000
3000
05:18
And yet, what behavioral economics shows time after time after time
123
303000
3000
05:21
is in human behavioral and behavioral change
124
306000
2000
05:23
there's a very, very strong disproportionality at work,
125
308000
3000
05:26
that actually what changes our behavior
126
311000
3000
05:29
and what changes our attitude to things
127
314000
2000
05:31
is not actually proportionate to the degree
128
316000
2000
05:33
of expense entailed,
129
318000
2000
05:35
or the degree of force that's applied.
130
320000
3000
05:38
But everything about institutions
131
323000
2000
05:40
makes them uncomfortable
132
325000
2000
05:42
with that disproportionality.
133
327000
2000
05:44
So what happens in an institution
134
329000
2000
05:46
is the very person who has the power to solve the problem
135
331000
3000
05:49
also has a very, very large budget.
136
334000
2000
05:51
And once you have a very, very large budget,
137
336000
2000
05:53
you actually look for expensive things to spend it on.
138
338000
3000
05:57
What is completely lacking is a class of people
139
342000
2000
05:59
who have immense amounts of power, but no money at all.
140
344000
3000
06:02
(Laughter)
141
347000
2000
06:04
It's those people I'd quite like to create
142
349000
2000
06:06
in the world going forward.
143
351000
2000
06:08
Now, here's another thing that happens,
144
353000
2000
06:10
which is what I call sometimes "Terminal 5 syndrome,"
145
355000
2000
06:12
which is that big, expensive things
146
357000
2000
06:14
get big, highly-intelligent attention,
147
359000
3000
06:17
and they're great, and Terminal 5 is absolutely magnificent,
148
362000
3000
06:20
until you get down to the small detail, the usability,
149
365000
2000
06:22
which is the signage,
150
367000
2000
06:24
which is catastrophic.
151
369000
2000
06:26
You come out of "Arrive" at the airport, and you follow
152
371000
2000
06:28
a big yellow sign that says "Trains" and it's in front of you.
153
373000
3000
06:31
So you walk for another hundred yards,
154
376000
2000
06:33
expecting perhaps another sign,
155
378000
2000
06:35
that might courteously be yellow, in front of you and saying "Trains."
156
380000
3000
06:38
No, no, no, the next one is actually blue, to your left,
157
383000
2000
06:40
and says "Heathrow Express."
158
385000
2000
06:42
I mean, it could almost be rather like that scene from the film "Airplane."
159
387000
3000
06:45
A yellow sign? That's exactly what they'll be expecting.
160
390000
3000
06:48
Actually, what happens in the world increasingly --
161
393000
2000
06:50
now, all credit to the British Airport Authority.
162
395000
2000
06:52
I spoke about this before,
163
397000
2000
06:54
and a brilliant person got in touch with me and said, "Okay, what can you do?"
164
399000
3000
06:57
So I did come up with five suggestions, which they are actually actioning.
165
402000
3000
07:00
One of them also being,
166
405000
2000
07:02
although logically it's quite a good idea
167
407000
2000
07:04
to have a lift with no up and down button in it,
168
409000
2000
07:06
if it only serves two floors,
169
411000
2000
07:08
it's actually bloody terrifying, okay?
170
413000
3000
07:11
Because when the door closes
171
416000
2000
07:13
and there's nothing for you to do,
172
418000
2000
07:15
you've actually just stepped into a Hammer film.
173
420000
2000
07:17
(Laughter)
174
422000
2000
07:19
So these questions ... what is happening in the world
175
424000
2000
07:21
is the big stuff, actually,
176
426000
2000
07:23
is done magnificently well.
177
428000
2000
07:25
But the small stuff, what you might call the user interface,
178
430000
3000
07:28
is done spectacularly badly.
179
433000
2000
07:30
But also, there seems to be a complete sort of gridlock
180
435000
3000
07:33
in terms of solving these small solutions.
181
438000
3000
07:36
Because the people who can actually solve them
182
441000
2000
07:38
actually are too powerful and too preoccupied
183
443000
2000
07:40
with something they think of as "strategy" to actually solve them.
184
445000
3000
07:43
I tried this exercise recently, talking about banking.
185
448000
2000
07:45
They said, "Can we do an advertising campaign?
186
450000
2000
07:47
What can we do and encourage more online banking?"
187
452000
3000
07:50
I said, "It's really, really easy."
188
455000
2000
07:52
I said, "When people login to their online bank
189
457000
2000
07:54
there are lots and lots of things they'd probably quite like to look at.
190
459000
3000
07:57
The last thing in the world you ever want to see is your balance."
191
462000
3000
08:01
I've got friends who actually
192
466000
2000
08:03
never use their own bank cash machines
193
468000
2000
08:05
because there's the risk that it might display
194
470000
2000
08:07
their balance on the screen.
195
472000
2000
08:09
Why would you willingly expose yourself to bad news?
196
474000
3000
08:12
Okay, you simply wouldn't.
197
477000
2000
08:14
I said, "If you make, actually, 'Tell me my balance.'
198
479000
2000
08:16
If you make that an option rather than the default,
199
481000
3000
08:19
you'll find twice as many people log on to online banking,
200
484000
3000
08:22
and they do it three times as often."
201
487000
2000
08:24
Let's face it, most of us -- how many of you
202
489000
2000
08:26
actually check your balance before you remove cash from a cash machine?
203
491000
3000
08:30
And you're pretty rich by the standards of the world at large.
204
495000
3000
08:33
Now, interesting that no single person does that,
205
498000
2000
08:35
or at least can admit to being so anal as to do it.
206
500000
3000
08:39
But what's interesting about that suggestion
207
504000
2000
08:41
was that, to implement that suggestion wouldn't cost 10 million pounds;
208
506000
3000
08:44
it wouldn't involve large amounts of expenditure;
209
509000
2000
08:46
it would actually cost about 50 quid.
210
511000
2000
08:48
And yet, it never happens.
211
513000
2000
08:50
Because there's a fundamental disconnect, as I said,
212
515000
3000
08:53
that actually, the people with the power
213
518000
2000
08:55
want to do big expensive things.
214
520000
2000
08:57
And there's to some extent a big strategy myth
215
522000
2000
08:59
that's prevalent in business now.
216
524000
2000
09:01
And if you think about it, it's very, very important
217
526000
2000
09:03
that the strategy myth is maintained.
218
528000
2000
09:05
Because, if the board of directors convince everybody
219
530000
3000
09:08
that the success of any organization
220
533000
2000
09:10
is almost entirely dependent on the decisions made by the board of directors,
221
535000
3000
09:13
it makes the disparity in salaries
222
538000
3000
09:16
slightly more justifiable
223
541000
2000
09:18
than if you actually acknowledge that quite a lot of the credit for a company's success
224
543000
3000
09:21
might actually lie somewhere else,
225
546000
2000
09:23
in small pieces of tactical activity.
226
548000
2000
09:26
But what is happening is that effectively --
227
551000
2000
09:28
and the invention of the spreadsheet hasn't helped this;
228
553000
2000
09:30
lots of things haven't helped this --
229
555000
2000
09:32
business and government suffers from a kind of physics envy.
230
557000
3000
09:35
It wants the world to be the kind of place where
231
560000
3000
09:38
the input and the change are proportionate.
232
563000
3000
09:41
It's a kind of mechanistic world
233
566000
2000
09:43
that we'd all love to live in
234
568000
2000
09:45
where, effectively, it sits very nicely on spreadsheets,
235
570000
3000
09:48
everything is numerically expressible,
236
573000
2000
09:50
and the amount you spend on something is proportionate
237
575000
3000
09:53
to the scale of your success.
238
578000
2000
09:55
That's the world people actually want.
239
580000
2000
09:57
In truth, we do live in a world that science can understand.
240
582000
2000
09:59
Unfortunately, the science is probably closer to being climatology
241
584000
3000
10:02
in that in many cases,
242
587000
2000
10:04
very, very small changes
243
589000
2000
10:06
can have disproportionately huge effects,
244
591000
2000
10:08
and equally, vast areas of activity, enormous mergers,
245
593000
3000
10:11
can actually accomplish absolutely bugger-all.
246
596000
3000
10:15
But it's very, very uncomfortable for us
247
600000
2000
10:17
to actually acknowledge that we're living in such a world.
248
602000
3000
10:20
But what I'm saying is we could just make things
249
605000
2000
10:22
a little bit better for ourselves
250
607000
2000
10:24
if we looked at it in this very simple four-way approach.
251
609000
3000
10:28
That is actually strategy, and I'm not denying that strategy has a role.
252
613000
3000
10:31
You know, there are cases where you spend quite a lot of money
253
616000
2000
10:33
and you accomplish quite a lot.
254
618000
2000
10:35
And I'd be wrong to dis that completely.
255
620000
3000
10:38
Moving over, we come, of course, to consultancy.
256
623000
2000
10:40
(Laughter)
257
625000
3000
10:44
I thought it was very indecent of Accenture
258
629000
2000
10:46
to ditch Tiger Woods in such
259
631000
2000
10:48
a sort of hurried and hasty way.
260
633000
2000
10:50
I mean, Tiger surely was actually obeying the Accenture model.
261
635000
3000
10:53
He developed an interesting outsourcing model for sexual services,
262
638000
3000
10:56
(Laughter)
263
641000
2000
10:58
no longer tied to a single monopoly provider,
264
643000
3000
11:01
in many cases, sourcing things locally,
265
646000
3000
11:04
and of course, the ability to have between one and three girls delivered at any time
266
649000
3000
11:07
led for better load-balancing.
267
652000
3000
11:10
So what Accenture suddenly found so unattractive about that, I'm not sure.
268
655000
3000
11:13
Then there are other things that don't cost much and achieve absolutely nothing.
269
658000
3000
11:16
That's called trivia.
270
661000
2000
11:18
But there's a fourth thing.
271
663000
2000
11:20
And the fundamental problem is we don't actually have a word for this stuff.
272
665000
3000
11:23
We don't know what to call it.
273
668000
2000
11:25
And actually we don't spend nearly enough money
274
670000
3000
11:28
looking for those things,
275
673000
2000
11:30
looking for those tiny things that may or may not work,
276
675000
3000
11:33
but which, if they do work,
277
678000
2000
11:35
can have a success absolutely out of proportion
278
680000
2000
11:37
to their expense, their efforts
279
682000
2000
11:39
and the disruption they cause.
280
684000
2000
11:41
So the first thing I'd like
281
686000
2000
11:43
is a competition -- to anybody watching this as a film --
282
688000
2000
11:45
is to come up with a name for that stuff on the bottom right.
283
690000
3000
11:48
And the second thing, I think,
284
693000
2000
11:50
is that the world needs to have people in charge of that.
285
695000
2000
11:52
That's why I call for the "Chief Detail Officer."
286
697000
2000
11:54
Every corporation should have one,
287
699000
2000
11:56
and every government should have a Ministry of Detail.
288
701000
3000
11:59
The people who actually have no money,
289
704000
2000
12:01
who have no extravagant budget,
290
706000
2000
12:03
but who realize that actually
291
708000
2000
12:05
you might achieve greater success in uptake
292
710000
2000
12:07
of a government program
293
712000
2000
12:09
by actually doubling the level of benefits you pay,
294
714000
2000
12:11
but you'll probably achieve exactly that same effect
295
716000
3000
12:14
simply by redesigning the form
296
719000
2000
12:16
and writing it in comprehensible English.
297
721000
2000
12:18
And if actually we created a Ministry of Detail
298
723000
3000
12:21
and business actually had Chief Detail Officers,
299
726000
2000
12:23
then that fourth quadrant,
300
728000
2000
12:25
which is so woefully neglected at the moment,
301
730000
2000
12:27
might finally get the attention it deserves.
302
732000
2000
12:29
Thank you very much.
303
734000
2000
ABOUT THE SPEAKER
Rory Sutherland - Advertising guruRory 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.
Rory Sutherland | Speaker | TED.com