Transcription
Damn. [Music] I think there's a really vital question, which is that about 90% of success in business, actually most success in, uh, science, in pharmaceuticals, is actually highly messy, non-linear, non-directional. Most of the effort in business is devoted to pretending that's not true. It's, it's basically devoted towards pretending upwards that things make much more sense than they really do. And I think there's a cost we pay when we do this. Okay, there's a huge cost we pay whenever we pretend things are neat. Okay, which is an opportunity cost, as economists would call it. It's effectively lost creative opportunities, which potential interesting ideas are destroyed whenever you design things to look neat from the top down. And the most interesting ideas tend to emerge from the bottom up. Actually, you know, scientific progress is much more penicillin than it is sequential, logical activities all agreed in advance to reach some preordained goal. It's much more Viagra. It's much more penicillin. A huge amount of progress actually happens backwards, but unintentionally. I think through our love of neatness, we're actually stopping that from happening. We're demanding that everything you do makes sense in advance, and we're designing a world for people who win arguments, not for people who solve problems.
You know, I think that, you know, the political class are now designed to win top-down arguments, not to solve problems. In fact, they get into trouble when they solve a problem. I always find it strange that John Major was ridiculed for proposing a "Cone's Hotline." Okay, it was considered far beneath the dignity of a Prime Minister who is supposed to be talking about interest rates or something. And yet, it was, at least it still exists, bizarrely. It was at least a small solution to a problem. And I think if we keep on elevating the argument winners over the problem solvers, that's where our fundamental stasis, that's why we get stuck. Because actually, being honest, there are very senior clients in the room, but is there anybody here who can actually, in a work or institutional context, make a decision on their own? I'm seriously asking that question. In the old days, you could. Okay, but now it's highly unlikely you can make any decision without reference to HR or the commissary at in finance. Okay, which means you've got to win an argument first before you can do anything. And once you make a requirement of anything you do, the need to win an argument in advance, A, gives the finance department the right of veto over every single activity in the business, but also, it limits the solution space by maybe 95%. If you can't do things that, to some small degree, don't quite make sense in advance, okay, you can't really innovate.
And so, if you really want the sort of, sort of serious academic stuff about this, there's an extraordinary book called "Seeing Like a State" by James C. Scott, who rather weirdly wrote, um, wrote a book which is really an attack on the idea of the whole control economy, top-down control. And yet, he's an anarchist anthropologist by background, but it's a very, very interesting book. There's a bit more about 19th-century and 18th-century German forestry than you may fundamentally want. But he, to that, of course, there will be three people in the room who go, "Hmm, okay." But he made the point that in order to make forestry look neat, the Germans adopted a top-down solution, which was to impose Norwegian Spruce, which was the fastest-growing form of timber, planted at equal intervals, um, everywhere throughout large German forests because they thought that would maximize efficiency. And by the way, for a few years, it did. It worked very well because Norwegian Spruce grows very, very quickly. And that's one of the problems, by the way, about efficiency-seeking ideas. They tend to work in the short term because the actual hidden costs and the problems and the, you know, what you might call the, um, the dangers only become apparent over time. What subsequently happened was a thing called "Volsteuben Forest Death," which is, first of all, if you're a parasite that plays, preys on, uh, Norwegian Spruce, okay, a monoculture forest is like a complete fantasy. Secondly, you destroyed all the, effectively all the undergrowth. You destroyed all the ecosystems that used to survive in mixed-use forestry, um, which effectively meant that the quality of the soil very, very rapidly degraded. It was a catastrophe, but it made sense from the top. All those instructions were going, "This is really stupid. My patch of forest is totally unsuited to these trees, or it's full of rocks, so we can't plant them at equal intervals, or the soil doesn't support this frequency of planting." But they were ignored because the essential thing was it had to make sense from the top. You could call it "seeing like a corporation" or "seeing like a holding company" if you wanted to be mischievous about this, but it's the idea that all data, all stories, all facts have to be aligned to be legible by the people at the top, okay? And there's a massive hidden cost when you do this.
I mean, the equivalent to this is, look, Baron Haussmann's plan for Paris. I'm not making this up, okay? So, you demolish all the buildings in Paris, you separate regions into work, residential, and retail, okay? And he conceived this idea looking at Paris from the air. Now, two things there. One, if there's anything wrong with Paris, it really isn't the building, right? Okay, yeah, cook breakfast will be a start, okay? And secondly, what the hell is the point of designing a city that looks that, you, you must know Brasilia, right? Did they? Okay, which is a city that makes absolutely perfect sense when viewed from the air. The problem you face there is that most people don't live in the air. And so your efforts to make sense of an architectural conception, this, this comes down to the whole Robert Moses, uh, versus Jane Jacobs debate. And Chris Graves tells me there was actually an opera composed about the fight in New York between Robert Moses and Jane Jacobs. But this is the vital question: do you want to solve? Do you want to win arguments? Because to some degree, these are mutually exclusive. I would argue that the urge to win arguments and to come to, to come to a kind of QED forces you, effectively, to make assumptions that are highly dangerous, possibly erroneous, or just silly. And actually, the fact that we've created a culture, probably with the expansion of higher education, which cherishes argument winning over problem-solving, seems to be fundamental.
And, um, this is an interesting thing, which is that I've given you examples of bad top-down thinking. This is really bottom-up thinking. What Conan Doyle called "thinking backward." Okay? And this is Sherlock Holmes speaking in "A Study in Scarlet": "The grand thing is to be able to reason backward. It is a very useful accomplishment and a very easy one, but people do not practice it much in the everyday affairs of life. It is more useful to reason forward." And so the other comes to be neglected. There are 50 who can reason synthetically for one who can reason analytically. That we've created a society where the ability to reason forwards is prized, encouraged, even taught. The ability to reason backwards requires creativity. It requires an act of imagination, okay? So reasoning forwards is kind of, "This is true, and therefore..." And whenever you know, whenever you look at most business slides, they're based on some bit of data, and you go, "This is true, and therefore we should do something else." Okay? That's just reasoning forwards. And people like it because there's no subjectivity involved, so you can't get blamed for your conclusions. Okay? The alternative, the creative alternative, is to ask the question, "What, what would have to be true if, if we want more people to do this? Can we imagine a world which is designed, an environment, a context, a form of messaging, doesn't matter what? Can we invent or imagine something where things would be different?" And that is inherently creative. And so we created this world where most of our world is Darwin, but we're pretending it's Newton, effectively. You know, most of the world is, you know, really, we need a theory about how things change. But what we're trying to do, as Jeffrey Miller spotted in that tweet, is we're trying to cram them into immutable, consistent laws all the time. And the creative opportunity cost that arises. And I think, by the way, the creative community, the advertising community, have acquired a kind of Stockholm Syndrome where they've started to acquire the attributes of their abusers. Instead of saying, "You're full of it, the data you've got is irrelevant," we go, "Oh yes, data and accountability, they're so important. We can do that too." Okay? And I think that's fundamentally a mistake.
Notice this total asymmetry in all business life. Complete, absolutely unvarying asymmetry. Creative people always have to present their ideas to rational people. By the way, I don't think that's necessarily wrong. Okay? What's really weird about it is it never happens the other way around. You'd never get a bunch of people in the finance department who go, "I think the answer is 3.75, but before I present this to the shareholders, I'm going to ask some wacky people whether they've got some alternative ideas." Never happens, right? Never, ever happens. This is a quote proving, I think, that actually the problem is older than we think. If you really want to go deep into the psychology of this, there are various books by, um, Ian McGilchrist, for example, "The Master and His Emissary." This is bizarrely, I didn't know this until recently, um, my fourth cousin Woodrow Wilson. Who said, "What's nearly a surprise is when I discovered my third cousin was Miss Teen South Carolina." By the way, that was a bit more surprising. Okay, we've not given the science to being a place in our education, but we've made a perilous mistake in giving it too great a preponderance in method in every other branch of study. In other words, when we can't do science, we pretend we can, and we impose scientific method on problems which are totally ill-suited to that. Hayek went on about this a lot, okay? And there's a big difference between, if you want to win an argument, you just use the data you have, right? If you want to solve a problem, you ask, "What actually do we need to know here to find out what's going on?" And maybe you have that data, maybe you don't.
But when I first became a creative director at Ogilvy, Mike Walsh, who ran Ogilvy Europe at the time, gave me a copy of this fairly hokey book by a guy called, I think, Robert Updegraff, called "Obvious Adams." And it's a kind of 1920s American, kind of folky business advice book. I was tired, tiny bit piqued, you know, I thought, you know, "Can you give me a subscription to Harvard Business Review or something rather?" And then, actually, two months later, I got around to actually reading the book, and it's fantastic. If nobody's read it, um, that book "Obvious Adams" is, it's about, you know, two thousand words or something, or five thousand words. It's actually brilliant, and it's about a guy who basically solves problems by looking at things and looking at them differently. Now, it comes to me, okay, this is a, for those of you who don't know, and apologies people in Ho Chi Minh City for whom this is going to become a bit weird, um, this is John, this is what used to be the John Lewis store in Tunbridge Wells and the retail park in Tunbridge Wells. So, it closed down and it went bust. Now, if you look at the data you have, you'd say, "Okay, let's look at the demography of Tunbridge Wells, let's look at the population size, let's look at the catchment area. We clearly can't make a John Lewis store work in that kind of place." Okay? Now, may or may not be true, by the way. But you're only looking at the data you have.
If you actually go to Tunbridge Wells and look at the John Lewis with the mind of a Darwin, not of a Newton, okay, what you pretty pretty quickly realize is: one, it has its own car park, so you have to make a specific journey to go there. You can't go to PC World and then have a shifty around John Lewis. Problem number one. Problem number two, the signage that's at the entrance to that car park is actually *after* the entrance to the car park. That's not a great idea. Putting signage after the turn, never a great idea. Thirdly, it's only really convenient to turn into the car park, uh, when you're leaving the retail park. Okay? So people coming in won't go there. It's only people leaving. Fourthly, the signage in the entrance is put on the narrowest edge of the store, which makes the store look about a quarter of the size it actually is. Okay? Right. But fifthly, they've called it "John Lewis at Home" for some reason. Okay? Why? Okay? Well, the reason is technically, okay, it doesn't sell women's clothes and cosmetics, so why not just call it "John Lewis for Blokes"? Okay? Um, but seriously speaking, why not just call it John Lewis? Because about, I've spoken to people who live locally, sorry, just this is getting a bit Kent specific, okay, locally, and about 60% of them assumed when they saw "at Home," think HomeSense, think Homebase, they assumed it was just a furniture store. And since only 5% of people are in the market for furniture at any one time, okay, and maybe, you know, three of those five percent are desperate that their spouse doesn't get the opportunity to look at any furniture, okay, generally, if people think you're a furniture store, you're not going to get great footfall. See what I mean? Is that if you look for explanations from the top down, using data you have, you'll come to totally different conclusions than if you go bottom up and actually say, "What is it we need to know?"
Now, funnily enough, there's actually a film about this. It's called "The Big Short." I think it's one of the best films in the last 20 years, and it features very, very interesting people who actually go and find out the data they need. Lots and lots of people in banks in New York all had aggregate data that told them everything was fine. What you needed to do in this specific case was go to Florida and speak to a stripper who had eight mortgages. I'm not suggesting that and that could be a policy for all problem-solving. I, I suspect, I, I suspect people would take an issue with it. A WPP travel policy or some tedious document like that. But they went and asked the right people. They actually went on the ground and saw that what looked perfectly sensible and neat and comprehensible in New York was a total show on the ground. And they actually went and they didn't ask, "What data have we got?" Some, "What data do we need?" And that strikes me as just a fundamentally huge distinction.
Now, interestingly, and thanks to my colleague David Fanner for this, the Royal Society of Arts, Manufacturers and Commerce recently published a paper on design thinking, and they said, fundamentally, I won't go into the whole detail, but it shows both divergent and convergent thinking in this particular graph. You don't need to understand the whole graph. What's significant about the graph is they call this "the missing first diamond," which is a period, I would say, of completely comfortable messiness at the beginning of every brief. Whereas rather than trying to proceed down a linear process, we actually go, "We ask the question, what is really going on here?" in a completely open-minded, experimental, exploratory way. And I think even creative businesses, which should know better, have failed to incorporate this first messy diamond in any process. Before we make any assumptions about what tool might be used to solve this problem, let's just ask various questions about what's really going on. And I think Antonius, who I think is here today, is that right? Antonius made the point that, um, one of the reasons you have difficulty getting business as a behavioral science practice is because you operate in that missing first diamond. Put bluntly, no one has a budget for solving a problem they didn't know they had. Okay? So the business of diagnostics is being completely underexplored.
I think in the creative world, "average" is a horrible word. What we mostly do when we present information upwards, in order to make it comprehensible, because the people at the top don't really know what's going on, okay? And those of you who are at the top will kind of acknowledge that by saying that, you know, the more you get promoted, the less you really have a clue about what's really happening. So, in other words, you're forced to live on a diet of averages and aggregations. And yet, this scientist here, talking to Roger Martin, um, makes the point that he, he's a, as a specialist in autism spectrum disorder, extremely successful Canadian academic. He says, "It's the outliers that tell the story." Never criticize something for being anecdotal. In fact, Jeff Bezos says, "When I find a conflict between the data and the anecdotes, I normally find it's the data that are wrong." Okay? Anecdotes are important because they tend to be about outliers, and it's the outliers that probably carry the greatest freight in solving a problem. They're useless for winning an argument, but they're really, really useful if you want to solve a problem.
Under them, you know, we, we phrase in a world where most people, most of the time, are asked to be performing rational actions. But actually, what we forget, and what marketers, we need to be more confident about, is if you don't actually win at the emotional level, all those hundred thousand. This is Kumalgal Hotter, who's the head of Ford North America, by the way. Um, and they, you know, they learned that by the way. You know, it's fundamentally true. You can get everything right. One of the strange things that they find, Volkswagen an enormous amount of money considering they were amazingly few Volkswagens in the United States. And the reason for that, by the way, is because they got the hundred thousand rational decisions right. But the German engineers and Volkswagen refused to include cup holders in the car. Okay? Now, anybody who knows American car purchasing habits knows that number of cup holders comes somewhere like number two or three in the decision tree. You know, well above cornering ability. Okay? So you could win the hundred thousand directional decisions, and lots of people get promoted for doing exactly just that. But if you don't win the emotional decision at the bottom, okay, you don't sell the car.
Now, interestingly, this is a perfect case of bottom-up thinking versus top-down thinking in Ford North America. Now, what Ford North America wanted to do was to create a separate electric car division with completely new brands. And they create a new brand in the sports utility vehicle sector, the crossover utility vehicle sector, the subcompact, uh, you know, the pickup truck, okay? And they create new electric brands, and then they keep all the existing brands in the old petrol division because that was neat from the top. It was 18th-century German forestry. It all made sense from a top-down perspective, okay? And then Roger Martin, I did ask him permission to tell this story. I don't know if anybody reads his books. They're Canadian. He was the Dean of the Rotman Business School in Toronto, absolutely brilliant guy. He had a massive argument with them, which he eventually won. And he said, "Look down from the perspective of the customer, not from the perspective of the managerial suite. You've got five real strengths here if you want to sell an electric car, and they are Mustang, Bronco, Explorer, F-150, Transit." Okay? "Go and make electric versions of those instead. Don't make new brands. Take your existing brands and electrify them." And this caused a bit of a row because they said, "Well, the F-150 customer surely doesn't want an electric vehicle." Actually, if you design an F-150 for electrification, you don't sell it on the basis of its environmental credentials, okay? You sell it on the fact that if your power goes down in your house because it's been cut off by Communists, you can run your house off your truck. Okay? Now, that's not great if you belong to Greenpeace, but if you're a bit of a doomsday prepper, that's music, right? But what they've done is they've mastered. I bought the Mustang myself, okay? It's absolutely fantastic. People said, "Why'd you do that?" And I said, "Well, if I buy an electric car, I'm cool, but I want a bit of Detroit in it somewhere, okay? You know, I want a bit of a feeling that it's, you know, metal, that it hasn't just been software, okay?" But the point I'm making here is that this was an extraordinary case of thinking of the problem for the customer upwards, not thinking of it from sense-making downwards. And every time you do sense-making downwards, the customer gets left out. The customer gets aggregated.
This is probably a quote. Yeah, this is Mark Ritson. "The average is the enemy of the marketer." Okay? What we do when we present information upwards is we aggregate it and average it. The act of aggregation destroys what's really interesting about that data in the first place, which is the anomalies and the outliers. Okay? That was what that scientist in Canada was doing. He said, "You know, I look at all these things on a scatter plot. I put a ring around all the things that are clustered together, and then I go and investigate the things that are far out." And in the same way, once you average, okay, it only allows for one answer. So you're massively limiting your creative solution space. And the answer is usually wrong, and almost inevitably boring, if you think about it. Okay? If through some weird AI genetic program, you could produce someone who is the average of all your friends, you probably wouldn't like them very much. They'd be extremely dull. Okay? It's a fundamental problem.
And this is my fundamental question about what I call the creative opportunity cost. What if, and I think there are, there are far more good ideas we can post-rationalize than our good ideas we can pre-rationalize. In other words, if you demand that someone wins an argument first, and remember, all big data comes from the same place: the past. So big data in itself is skewed because it's skewed towards what used to happen. And even measurement and accountability is heavily skewed towards what happens fast rather than what happens slowly. Okay? Even if you account for those biases, I think that the demand that something makes complete logical and consistent sense is actually a massive limitation on creative discovery. I think it's too big an ask. It's fine in Newtonian physics. It's absolutely fine in engineering. It's fine in any field of science where the laws can only be as they are, okay? Right. You can't change the rules of gravity, so therefore making the assumption that gravity is going to be the same tomorrow as it was yesterday is a pretty safe bet. You can't do that with a market. You can't do that with human psychology. Human psychology, you can rewrite the rules yourself.
Also, when you have an average, you assume there's only one right idea. There's only one good idea. What I discovered is actually quite often in marketing, the opposite of a good idea is another good idea. And I've got a story to tell you about this, which is slightly distasteful, but I'll tell it anyway. Which I'm about to go on stage about four years ago, and I'm wearing beige trousers. And as all speakers do, you go to the loo eight minutes before you go on stage. I don't know why you just have to, okay? And unfortunately, the wash basin went into spasm and deposited a huge amount of water on the front of my trousers. So I was thinking, "What do I do here? Do you do a runner? Okay? What do I do?" And I tried the hand, the hand dryer, and it was hopeless. Okay? I'd have had to stand there actually char-grilling my own genitals in order to have any effect for about half an hour. And I went outside in desperation. And then a miracle happened. It started to rain really heavily. And I went out into the street and just stood in the rain, okay, for about 10 minutes before I went on stage. Now, admittedly, the people in the audience thought, "Why is this guy fallen into a swimming pool?" Okay? But it was better than the alternative. So sometimes the solution is to dry the wet bits, and sometimes the solution is to wet everything else. The opposite of a good idea can be another good idea. And once you think backwards, you notice that all the time. Because when you think backwards, what you sacrifice is clarity, because there's more than one right answer. What you gain is massive surface area exposure to possible upside, creative opportunity. Okay? And what I want to say is that every time you make a decision, there's a chance to have a good idea. We tend to, as ad agencies, try and make creativity seem really scarce and rare and the product of really lengthy processes so we can charge money for it. Okay? In reality, okay, you have an opportunity to be creative every time you make a decision.
And this was a lovely decision from someone at UNICEF, um, who was given a huge donation of Crocs to give away to parts of Africa where people didn't have shoes. And she said, "Well, the logical thing is just to go and find out where people don't have shoes and hand out Crocs." Perfectly good idea. You never get fired for that, okay? Much, much easier to be fired for being irrational than it is for being unimaginative. That's a kind of weird distortion in employment. You know, if you make a rational decision, doesn't matter what the consequences are, you keep your job. If you make a weird decision, if it goes well, people claim the credit elsewhere, and if it goes badly, you lose your job. Okay? So there are huge incentives within any institution not to be imaginative. And I said, "Well, of course, I had to make the obvious joke, which is, well, the other great thing about Crocs is they're a fantastic contraceptive because, uh, it's impossible to become even mildly aroused in the presence of anybody wearing them." And, and she said, "No, no, these are for children." I said, "Okay, sorry, I get the point." And, um, and, um, she then fantastically, I think she went to schools in areas where people didn't have many shoes, and she gave the shoes to the schools and said, "When people turn up without shoes on day one of their first day at school, give them a pair of Crocs." And what they did is they went home, and all the other kids said, "Where did you get those Crocs from?" "I got them when we went to school." "I'm going to school tomorrow." So you both achieved the main objective, which is showing the unshod, but you also got magic, you got alchemy, you got a bit of extra value out of it because you created a habit and a kind of incentive for people to attend school in their first week, which massively increases the likelihood they'll continue to do so. It's a free lunch.
And this is my point. If irrationally, and you use Newtonian physics, there's no free lunch. If you look at the world psychologically, there are free lunches everywhere when you think backwards. I've come to this point. Here's another example of just doing something much better. It's a restaurant in St. Tropez, on the French Riviera, and, um, they were going to put up a notice saying, "Mobile phones not allowed." But it's kind of a Michelin-star place. It's a bit weird bossing your customers around, and it tends to create reactants where people immediately think of a reason why this doesn't apply to them. You know, "Oh, it's just, it's important my children can get hold of me," or some something like that. Now, 99.9% of people would have put up that notice. This restaurant didn't. They found a spot where the notice was ostensibly targeted at people leaving the restaurant, but was completely visible to everybody walking in. And what the notice said was that what they did is they created an implicit social norm, which is, "Naturally, our sophisticated customers would not dream of, you know, making loud calls about the NASDAQ in the middle of a Michelin-starred meal." And it basically, "Maybe phone off, because that's what everybody else is doing, and it would look a bit national to do it." That's what I mean, that actually, for every logical solution, there's a better solution when you think backwards. Two more minutes.
Marketing and innovation are the same thing, okay? Uh, James Watt wanted to sell steam engines to mine owners. They weren't remotely interested in things like cylinder capacity. What James Watt did is he invented a marketing metric, still in use today. He invented the horsepower, okay? Because you could go to a mine owner who didn't give a damn about the cubic capacity or the boiler temperature, but if you said, "Buy a 25 horsepower engine, and you can get rid of 25 horses," catching maths done, problem solved, okay? Bottom-up thinking. This is top-down thinking. We need more capacity from west to east in London, so we spend 20 billion pounds building a tunnel. Perfectly valid. Not necessarily wrong. I'm not suggesting that this behavior is always wrong, but there's also bottom-up thinking where you take railway lines that have always existed, the Overground, rebranded the Overground, and added to the London Tube map. Now carries as many people as Crossrail, doubt that does. But what they did, effectively, by making it cognitively comprehensible, is they created 20 billion pounds worth of transport infrastructure using mostly ink, okay? Simply by changing the way people perceived it, they made it useful, and by making it usable, they made it valuable. That's as much value creation as building a tunnel is. And yet, we don't think of it that way. No one has ever said this is the greatest marketing case study of the last 20 years. Someone's got to do that for solar panels. Find a way. We've tracked the technology. No one's cracked how to sell them, okay? No one wants to spend 25,000 pounds on an experiment that might go badly wrong. If someone can come up with a modular where you can install these, maybe we're off to the races. So what I mean is, the future is already here. We just don't know how to sell it yet. That's my final point. When you think backwards, there are free lunches everywhere. When you think forwards, you end up with one unambiguous solution, which people in managerial positions love because it's inarguable. Unfortunately, along with being inarguable, it's quite possibly really, really bad.
If you want to know more, there is a course called MAD Masters, which I host, and it helps you address the challenges of now. So I'd very much encourage that as a bit of a plug. I can also plug all the books written by my team. And end right there on time. Thank you very much indeed. [Applause] [Music]