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

by Rory Sutherland

The decimation of local species threatened the environment and the economics of Colombia, much of which depends on fishing. It was also destroying the ecology of coral reefs. This was when some colleagues of mine borrowed an idea from Frederick the Great; Ogilvy & Mather in Bogotá decided that the solution was to create a predator for the lionfish – humans.

Some 84 per cent of Colombians are Roman Catholic, so they asked the Catholic Church to recommend lionfish to their congregations on Fridays and during Lent. That additional element – recruiting the Catholic Church – was the true piece of alchemy. Today, indigenous fish species are recovering and the lionfish population is in decline.fn1

Unless you are a small child, or you are staying in a pretentious boutique hotel where everything is chosen to signal ‘Hey, we’re totally different,’fn1 door handles are generally found at a height and in a shape that suits your frame.

In the same way that McDonald’s omitted cutlery from its restaurants to make it obvious how you were supposed to eat its hamburgers, by removing the recording function from Walkmans, Sony produced a product that had a lower range of functionality, but a far greater potential to a change behaviour.

The Walkman also exploits a clear psychological heuristic, or rule of thumb – ‘the jack-of-all-trades-heuristic’, whereby we naturally assume that something that only does one thing is better than something that claims to do many things.

Google is, to put it bluntly, Yahoo without all the extraneous crap cluttering up the search page, while Yahoo was, in its day, AOL without in-built Internet access.

The strongest marketing approach in a business-to-business context comes not from explaining that your product is good, but from sowing fear, uncertainty and doubt (now commonly abbreviated as FUD) around the available alternatives.

I mentioned earlier in this book that there are five main reasons why human behaviour often departs from what we think of as conventional rationality. The first of these is signalling, the need to send reliable indications of commitment and intent, which can inspire confidence and trust.

For instance, in London I can put my two daughters into a car driven by a complete stranger and rely on them to be driven safely to their destination, because the stranger is driving a black cab.

It is in the interests of all honest cab drivers to maintain a standard of trust; if only 0.5 per cent of cab journeys resulted in a rip-off or a mugging, faith in the whole system would evaporate and the entire business would collapse.

If you don’t believe this, go to Athens, where foreign taxi passengers are on average taken on a 10 per cent longer route than Athenian passengers. Try Seville, where I was menaced to pay an imaginary €20 ‘suplemento aeropuerto’. Or Rome, where a colleague of mine was mugged by his taxi driver.fn3

I’m not arguing that the Knowledge is the only solution to this problem, but what I am saying is that it is only partially of navigational value; a large part of its value is as a signalling device.

This book contains no such chapter. The reason for that is that the Ultimatum Game is stupid, and so is the Prisoner’s Dilemma: these games exist in a context-free, theoretical universe with no real-life parallels. They both posit the idea of the one-shot exchange, a transaction involving two strangers with no knowledge of the other’s identity. In the real world, such transactions never take largely place – we choose to buy things in shops, not from random strangers in the street.

Yet there are, when you think about it, two contrasting approaches to business. There is the ‘tourist restaurant’ approach, where you try to make as much money from people in a single visit. And then there is the ‘local pub’ approach, where you may make less money from people on each visit, but where you will profit more over time by encouraging them to come back. The second type of business is much more likely to generate trust than the first.

What we wanted from the recipient was not simply the ingestion of information: it was attention, conviction and a sense of import, something that an economically rational 50p stamp could never obtain but that a £10 FedEx envelope could.

Bits deliver information, but costliness carries meaning. We do not invite people to our weddings by sending out an email. We put the information (all of which would fit on an email – or even a text message) on a gilt embossed card, which costs a fortune.

You can try a similar experiment with young children. Feed them their favourite food, but add a subtle herb or spice. They will find it revolting, because the slight deviation from what they expect alarms them into believing it is somehow unsafe.

Quite simply, all powerful messages must contain an element of absurdity, illogicality, costliness, disproportion, inefficiency, scarcity, difficulty or extravagance – because rational behaviour and talk, for all their strengths, convey no meaning.

meaning is conveyed by the things we do that are not in our own short-term self-interest – by the costs that we incur and the risks we take.

Our brains did not evolve to make perfect decisions using mathematical precision – there wasn’t much call for this kind of thing on the African savannah. Instead we have developed the ability to arrive at pretty good, non-catastrophic decisions based on limited, non-numerical information, some of which may be deceptive.

To quote a Caribbean proverb, ‘Trust grows at the speed of a coconut tree and falls at the speed of a coconut.’

In advertising, a large budget does not prove a product is good, but it does establish that the advertiser is confident enough in the future popularity of the product to spend some of his resources promoting it.

In a letter to a friend, Darwin remarked that ‘the sight of a feather in a peacock’s tail’ made him ‘physically sick’. The reason for this strange aversion was that the male peacock seemed a living refutation of the theory of evolution through natural selection – the idea that something so beautiful and yet so ostensibly pointless sat more easily with the idea of a divine creator than with the idea of natural selection.

It might be a good rule of thumb for animals to avoid eating brightly coloured animals, since something that doesn’t need to adopt camouflage has clearly survived through some strategy other than concealment, and hence it might be best avoided. Here again, we have a case where doing something ostensibly irrational conveys more meaning than something that makes sense.

And in the absence of recognisable brands, it was impossible to make sense of the category – as neuroscientists have observed, we don’t so much choose brands as use them to aid choice. And when a choice baffles us, we take the safe default option – which is to do nothing at all.

This lesson was learned the hard way in Eastern Bloc countries under communism; brands were considered un-Marxist, so bread was simply labelled ‘bread’. Customers had no idea who had made it or whom to blame if it arrived full of maggots, and couldn’t avoid that make in future if it did, because all bread packaging looked the same.

For decades, the most sympathetic ear I had at The Economist in London was not their marketing correspondent (who seemed to genuinely hate marketing) but their science correspondent, whose background was as an evolutionary biologist.

It is impossible to buy expensive aspirin in the UK, yet it is a waste of this wonder drug to sell it for 79p in drab packaging, when you could make it much better by packaging it lavishly, colouring the pills redfn1 and charging more. Sometimes I have a £3.29 headache rather than a 79p one. I try to stockpile the pricier brands I buy in the US, because I find they work better.

feelings can be inherited, whereas reasons have to be taught, which means that evolution can select for emotions much more reliably than for reasons.

In the words of Jonathan Haidt,fn1 1 ‘The conscious mind thinks it’s the Oval Office, when in reality it’s the press office.’ By this he means that we believe we are issuing executive orders, while most of the time we are actually engaged in hastily constructing plausible post-rationalisations to explain decisions taken somewhere else, for reasons we do not understand.

My aunt, late in life, could still not bring herself to throw food away uneaten, even when the contents of her fridge had decayed to the point of becoming a biohazard – her attitude to waste had been calibrated during a time of great scarcity.

There is an important lesson in evaluating human behaviour: never denigrate a behaviour as irrational until you have considered what purpose it really serves.

I invent my brutally honest slogans to make the point that most products have both an ostensible, ‘official’ function and an ulterior function. The main value of a dishwasher, I would argue, is not that it washes dirty dishes, but that it provides you with an out-of-sight place to put them.

The single best investment ever made by the London Underground in terms of increasing passenger satisfaction was not to do with money spent on faster, more frequent trains – it was the addition of dot matrix displays on platforms to inform travellers of the time outstanding before the next train arrived.

have twin 17-year-old daughters and I love them dearly, except when the time comes to leave the house. Their cosmetic regime is beyond ridiculous:

There are also some trends in female fashion, high-waisted trousers, for instance, which men find fairly repellent.

It seems likely that a significant part of what you’re doing when you spend two hours on self-grooming is self-administering a confidence placebo to produce emotions that you can’t generate through a conscious act of will.

After all, it shares many of the features of a great placebo: it’s expensive, it tastes weird and it comes in a ‘restricted dose’. In its early days, Red Bull also benefited from repeated rumours that its active ingredient, taurine, was about to be banned.

The modern education system spends most of its time teaching us how to make decisions under conditions of perfect certainty. However, as soon as we leave school or university, the vast majority of decisions we all have to take are not of that kind at all.

It’s interesting that we find solving complex problems like this so easy – it suggests that our brains have evolved to answer ‘wide context’ problems because most problems we faced as we developed were of this type. Blurry ‘pretty good’ decision-making has simply proven more useful than precise logic.

The problems occur when people try to solve ‘wide’ problems using ‘narrow’ thinking. Keynes once said, ‘It is better to be vaguely right than precisely wrong’, and evolution seems to be on his

The risk with the growing use of cheap computational power is that it encourages us to take a simple, mathematically expressible part of a complicated question, solve it to a high degree of mathematical precision, and assume we have solved the whole problem.

The idea is that these things are scored independently and then totalled to determine the winning agency but if you ask anybody who’s been involved in this procedure, they will often admit that they simply decided which agency they wanted to win and back-filled all the numbers accordingly.

If you optimise something in one direction, you may be creating a weakness somewhere else. Intriguingly this very approach is now being considered in the treatment of cancers.

We will pay a disproportionately high premium for the elimination of a small degree of uncertainty – why this matters so much is that it finally explains the brand premium that consumers pay.

For instance, a cricketer catching a high-flying ball does not calculate its trajectory using quadratic equations, but instead uses a rule of thumb known as the ‘angle of gaze’ heuristic, looking upwards at the ball and moving towards it in such a way that the upward angle of their gaze remains constant.

We drive our cars heuristically, we choose our houses heuristically – and we probably also choose our partners heuristically.

The system of watertight games and sets means that there is no difference between winning a game to love or after several deuces. A 6–0 set counts as a set, just as a 7–5 win does. This means that the losing player is never faced with an insurmountable mountain to climb.

For instance, in deciding whom to marry, aiming for the best may be less important than avoiding the worst – rather than trying to maximise an outcome, you may seek a pretty good all-round solution with a low chance of disaster.

A few years ago we discovered that men were reluctant to order a cocktail in a bar – in part because they had no foreknowledge of the glass in which it would be served.