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Oblique rules (or the importance of being irrational)

“Do I contradict myself?  Very well then, I contradict myself.  I am large, I contain multitudes.”  – Walt Whitman

In Obliquity, John Kay provides an elegant and clear explanation of why goals are more likely to be achieved when pursued obliquely rather than head on.  He provides great examples of how the most profitable businesses are not run for profit, the most successful careers do not pursue success and many other cases where iterative or adaptive approaches lead to greater success than more direct ones, with the ability to cope with the complexities of a changing world and human social networks.

Dan Ariely explored similar ideas in Predictably Irrational, although both books beg the question as to what is “rational” and what is “irrational”?  Typically, we interpret irrational to mean not making sense, but if something is predictable in being irrational, does that very predictability then make sense?  I believe there are two main issues here.

Firstly, rational and irrational are typically used to describe “conscious” behaviours, in the sense that we are consciously thinking about it when it happens.  Fortunately (and I use that word advisedly), the majority of behaviours are learned habits, of which we are not at all conscious.  For example, when I learnt to drive, I had to think very hard about each action:  were you taught like me, mirror-signal-reverse?  I had to work hard to remember to take the hand brake off before moving, and had to listen carefully to the engine to decide when I needed to change gear.  However, this soon became habit, and when I drive now, which is not very often, I am not aware of these things and just behave completely from habit.

Similarly, when I jump back from the stick in the field (before I consciously work out that it’s not a snake), my behaviour is completely sensible, although neither rational nor irrational.  It just reflects what I (and arguably my ancestors) have learnt over time.  John Kay uses the example of someone who desires to lose weight (something I constantly do) and at the same time would love to eat the cream cake in front of them.  Reconciling contradictory ideas, is a key to breakthrough innovations, but more importantly reflects the different human drives – the desire to eat sweet and fatty food has been learnt over thousands (perhaps millions) of years, and until recently reflected a shortage (rather than abundancy) of resources in the outside world.  Does that make it an irrational desire?  In any case, we know which desire wins in many cases.

This brings me to the second issue, which is that “irrational” behaviour is seen as subjective and associated with strong emotions, whereas “rational” behaviour is seen as more objective and without emotion.  However, this is misguided, as we know from neuroscience that decision-making is dependent on both reason and emotion (with emotion the more important).  For instance, Antonio Damasio’s work shows that humans who use their emotions are unable to make decisions.  Many decisions are based on “gut feel” (be that unconscious, habit or emotions) and then rationalized post hoc.  John Kay calls this Franklin’s Gambit, and psychologists use the phrase “confirmation bias”.   This does not mean that we are all irrational, it just reflects that many (perhaps the majority) of daily decisions are based on instincts which reflect simple heuristics that our brain uses to make decision making easier – these reflect what we have learnt over a lifetime.  Where we do not have such simple heuristics, we often struggle to decide, and often just decide to do nothing (Barry Schwartz presents many examples of this in his book The Paradox of Choice).

Rational and direct approaches do not work in many spheres of business including innovation (read previous posts) and economics.  The failure to acknowledge this can have devastating consequences as Akerlof and Shiller discuss in their recent book Animal Spirits.  Economic models are all based on assumptions of rational decision-making, self-correcting markets and perfect information.  We know that none of these assumptions can be true in real life, and that markets are driven by human psychology far more than by mathematical laws.

So we ignore “animal spirits” at our peril in all aspects of business.  In order to change human behaviour, we must first understand existing habits and then help our customers to learn new habits.  New habits are only learned when they have emotional resonance as well as rational meaning.

REFERENCES

Obliquity by John Kay

Predictably Irrational by Dan Ariely

The Paradox of Choice by Barry Schwartz

Animal Spirits by George A. Akerlof and Robert J. Shiller

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