Alchemy: The Surprising Power of Ideas That Don't Make Sense

by Rory Sutherland

RORY’S RULES OF ALCHEMY: The opposite of a good idea can also be a good idea. Don’t design for average. It doesn’t pay to be logical if everyone else is being logical. The nature of our attention affects the nature of our experience. A flower is simply a weed with an advertising budget. The problem with logic is that it kills off magic. A good guess which stands up to observation is still science. So is a lucky accident. Test counterintuitive things only because no one else will. Solving problems using rationality is like playing golf with only one club.

Dare to be trivial. If there were a logical answer, we would have found it.

The human mind does not run on logic any more than a horse runs on petrol.

if we allow the world to be run by logical people, we will only discover logical things. But in real life, most things aren’t logical – they are psycho-logical.

to reach intelligent answers, you often need to ask really dumb questions.

To avoid stupid mistakes, learn to be slightly silly.

The trick to being an alchemist lies not in understanding universal laws, but in spotting the many instances where those laws do not apply. It lies not in narrow logic, but in the equally important skill of knowing when and how to abandon it. This is why alchemy is more valuable today than ever. Not everything that makes sense works, and not everything that works makes sense.

To solve logic-proof problems requires intelligent, logical people to admit the possibility that they might be wrong about something, but these people’s minds are often most resistant to change – perhaps because their status is deeply entwined with their capacity for reason. Highly educated people don’t merely use logic; it is part of their identity.

This book is not an attack on the many healthy uses of logic or reason, but it is an attack on a dangerous kind of logical overreach, which demands that every solution should have a convincing rationale before it can even be considered or attempted. If this book provides you with nothing else, I hope it gives you permission to suggest slightly silly things from time to time. To fail a little more often. To think unlike an economist. There are many problems which are logic-proof, and which will never be solved by the kind of people who aspire to go to the World Economic Forum at Davos.

both candidates wanted manufacturing jobs to return to the United States. Hillary’s solution was logical – engagement in tripartite trade negotiations with Mexico and Canada. But Donald simply said, ‘We’re going to build a wall, and the Mexicans are going to pay.’ ‘Ah,’ you say. ‘But he’s never going to build that wall.’ And I agree with you – I think it highly unlikely that a wall will be built, and even less likely that the unlucky Mexicans will agree to pay for it. But here’s the thing: he may not need to build the wall to achieve his trade ambitions – he just needs people to believe that he might.

Irrational people are much more powerful than rational people, because their threats are so much more convincing.

A rational leader suggests changing course to avoid a storm. An irrational one can change the weather.

Being slightly bonkers can be a good negotiating strategy: being rational means you are predictable, and being predictable makes you weak. Hillary thinks like an economist, while Donald is a game theorist, and is able to achieve with one tweet what would take Clinton four years of congressional infighting. That’s alchemy; you may hate it, but it works.

If you are wholly predictable, people learn to hack you.

There are two separate forms of scientific enquiry – the discovery of what works and the explanation and understanding of why it works.

Aspirin, for instance, was known to work as an analgesic for decades before anyone knew how it worked. It was a discovery made by experience and only much later was it explained. If science did not allow for such lucky accidents,fn1 its record would be much poorer – imagine if we forbade the use of penicillin, because its discovery was not predicted in advance? Yet

policy and business decisions are overwhelmingly based on a ‘reason first, discovery later’ methodology, which seems wasteful in the extreme.

Perhaps a plausible ‘why’ should not be a pre-requisite in deciding a ‘what’, and the things we try should not be confined to those things whose future success we can most easily explain in retrospect.

what is the single most important finding of the advertising industry? Perhaps it is that ‘advertisements featuring cute animals tend to be more successful than ads that don’t’.

Once you accept that there may be a value or purpose to things that are hard to justify, you will naturally come to another conclusion: that it is perfectly possible to be both rational and wrong.

Logical ideas often fail because logic demands universally applicable laws but humans, unlike atoms, are not consistent enough in their behaviour for such laws to hold very broadly. For example, to the despair of utilitarians, we are not remotely consistent in whom we choose to help or cooperate with. Imagine that you get into financial trouble and ask a rich friend for a loan of £5,000, who patiently explains that you are a much less needy and deserving case for support than a village in Africa to which he plans to donate the same amount. Your friend is behaving perfectly rationally. Unfortunately he is no longer your friend.

once human psychology has a role to play, it is perfectly possible for behaviour to become entirely contradictory. For instance, there are two equally potent, but completely contradictory, ways to sell a product: ‘Not many people own one of these, so it must be good’ and ‘Lots of people already own one of these, so it must be good.’

While in physics the opposite of a good idea is generally a bad idea, in psychology the opposite of a good idea can be a very good idea indeed: both opposites often work.

In his book Skin in the Game (2018), Taleb includes what might be the most interesting quotation on an individual’s politics I have ever read. Someonefn3 explains how, depending on context, he has entirely different political preferences: ‘At the federal level I am a Libertarian. At the state level, I am a Republican. At the town level, I am a Democrat. In my family I am a socialist. And with my dog I am a Marxist – from each according to his abilities, to each according to his needs.’

The problem that bedevils organisations once they reach a certain sizefn8 is that narrow, conventional logic is the natural mode of thinking for the risk-averse bureaucrat or executive. There is a simple reason for this: you can never be fired for being logical. If your reasoning is sound and unimaginative, even if you fail, it is unlikely you will attract much blame. It is much easier to be fired for being illogical than it is for being unimaginative. The fatal issue is that logic always gets you to exactly the same place as your competitors.

At Ogilvy, I founded a division that employs psychology graduates to look at behavioural change problems through a new lens. Our mantra is ‘Test counterintuitive things, because no one else ever does.’

The logical and the psycho-logical approaches run on different operating systems and require different software, and we need to understand both. Psycho-logic isn’t wrong, but it cares about different things and works in a different way to logic.

There are five main reasons why we have evolved to behave in seemingly illogical ways, and they conveniently all begin with the letter S.fn1 They are: Signalling, Subconscious hacking, Satisficing and Psychophysics.

there is a duality in the human

brain that is rather similar to the relationship between the logic of the GPS and the wider wisdom of the driver, between logic and psycho-logic. There is the unambiguously ‘right’ answer, where certainty is achieved by limiting the number of data points considered. The downside of this is that, in the wrong context, it can be hopelessly wrong. Then there is the pretty good judgement of psycho-logic, which considers a far wider range of factors to arrive at a not-perfect-but-rarely-stupid conclusion.

The credibility we should attach to these two modes of thinking varies according to context. Sometimes it is best to obey your GPS slavishly, but at other times you should ignore it com...

The late David Ogilvy, one of the greats of the American advertising industry and the founder of the company I work for, apparently once said, ‘The trouble with market research is that people don’t think what they feel, they don’t say what they think,

and they don’t do what they say.’

Here’s Ogilvy’s contemporary, Bill Bernbach: ‘Human nature hasn’t changed for a million years. It won’t even change in the next million years. Only the superficial things have changed. It is fashionable to talk about the changing man. A communicator must be concerned with the unchanging man – what compulsions drive him, what instincts dominate his every action, even though his language too often camouflages what really motivates him.’

For the last fifty years or so, most issues involving human behaviour or decision-making have been solved by looking through what I call ‘regulation-issue binoculars’. These have two lenses – market research and economic theory – that together are supposed to provide a complete view of human motivation.

The first lens is market research or, to give it a simpler name, asking people. However, the problem with it is that, if we remember David Ogilvy’s words: ‘The trouble with market research is that people don’t think what they feel, they don’t say what they think, and they don’t do what they say.’ People simply do not have introspective access to their motivations. The second lens is standard economic theory, which doesn’t ask people what they do and doesn’t even observe what they do. Instead it assumes a narrow and overly ‘rationalistic’ view of human motivation, by focusing on a theoretical, one-dimensional conception of what it believes humans are trying to do.

Put simply, it’s easy to achieve massive improvements in perception at a fraction of the cost of equivalent improvements in reality.

Let me give a simple example. The Uber map is a psychological moonshot, because it does not reduce the waiting time for a taxi but simply makes waiting 90 per

cent less frustrating. This innovation came from the founder’s flash of insight (while watching a James Bond film, no lessfn3) that, regardless of what we say, we are much bothered by the uncertainty of waiting than by the duration of a wait. The invention of the map was perhaps equivalent to multiplying the number of cabs on the road by a factor of ten – not because waiting times got any shorter, but because they felt ten times less irritating.

In trying to encourage rational behaviour, don’t confine yourself to rational arguments.

Who cares why people clean their teeth, as long as they do it? Who cares why people recycle, as long as they do it? And who cares why people don’t drink-drive, as long as they don’t do it?

If you confine yourself to using rational arguments to encourage rational behaviour, you will be using only a tiny proportion of the tools in your armoury.

Had Darwin waited a hundred and fifty years or so, he could have saved himself a great deal of trouble and seasickness in

uncovering our primate ancestry by travelling from Down House to his (and my) local Sainsbury’s supermarket in Otford in Kent. There he could have learned from point-of-sale data that, over 30,000 items on the shelves, the single item most frequently purchased, as by all grocery shoppers in Britain, is … a banana.

I had the idea of turning up at an apartment with five smoke detectors; the fire officer was to casually carry in all five, before saying, ‘I think we can make do with three here … How many would you like, three or four?’ We are highly social creatures and

just as we find it very difficult to answer the question ‘still or sparkling?’ with ‘tap’, it is also difficult to answer the question about ‘three or four’ smoke detectors with ‘one’. As Nassim Nicholas Taleb remarks, ‘the way a question is phrased is itself information’.

‘A CHANGE IN PERSPECTIVE IS WORTH 80 IQ POINTS’ So said Alan Kay, one of the pioneers of computer graphics.

I suspect, too, that the opposite is also true: that an inability to change perspective is equivalent to a loss of intelligence.fn1

As I always advise young people, ‘Find one or two things your boss is rubbish at and be quite good at them.’ Complementary talent is far more valuable than conformist talent.

Don’t design for average. Metrics, and especially averages, encourage you to focus on the middle of a market,