Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life

by Rory Sutherland

In a world of perfect information and infinite calculating power, it might be slightly suboptimal to use these heuristics, or rules of thumb, to make decisions, but in the real world, where we have limited trustworthy data, time and calculating power, the heuristic approach is better than any other alternative.

It is a common mistake in darts to assume that you should simply aim for the highest possible score – you should also consider the consequences if you miss.

Habit, which can often appear irrational, is perfectly sensible if your purpose is to avoid unpleasant surprises.

The great thing about making the ‘default’ choice is that it feels like not making a decision at all, which is what businesspeople and public sector employees tend to really like doing – because every time you don’t visibly make a decision, you’ve ducked a bullet.

Blame, unlike credit, always finds a home, and no one ever got fired for booking JFK. By going with the default, you are making a worse decision overall, but also insuring yourself against a catastrophically bad personal outcome. In his book Risk Savvy (2014), the German psychologist Gerd Gigerenzer refers to this mental process as ‘Defensive Decision-Making’ – making a decision which is unconsciously designed not to maximise welfare overall but to minimise the damage to the decision maker in the event of a negative outcome. Much human behaviour that is derided as ‘irrational’ is actually evidence of a clever satisficing instinct – repeating a past behaviour or copying what most other people do may not be optimal, but is unlikely to be disastrous. We are all descended from people who managed to reproduce before making a fatal mistake, so it is hardly surprising that our brains are wired this way.

What really is and what we perceive can be very different.

Big data makes the assumption that reality maps neatly on to behaviour, but it doesn’t. Context changes everything. Perception may map neatly on to behaviour, but reality does not map neatly onto perception. We should also remember that all big data comes from the same place: the past. Yet a single change in context can change human behaviour significantly. For instance, all the behavioural data in 1993 would have predicted a great future for the fax machine.

Alchemy, precisely because it is not an exact science, has always been rife with charlatanry, and we should be on our guard for this. Many of the remedies proposed by people in advertising and design are wrong, and many of the findings of behavioural scientists have already been or will be proved wrong. Some parts of this book are also undoubtedly wrong – I am conscious that I have written this book from an incredibly optimistic perspective, but my argument is not that alchemy is always reliable, ethical or beneficial. Far from it – it is simply that we should not recoil from testing alchemical solutions because they do not fit with our reductionist ideas about how the world works. The purpose of this book is to persuade the reader that alchemy exists whether we like it or not, and that it is possible to use it for good; besides, if people are more aware of its existence, they will be better at spotting its misuses.*

The Polish-American academic Alfred Korzybski (1879–1950) is perhaps most famous for his dictum that ‘The map is not the territory.’ He created a field called general semantics, and argued that because human knowledge of the world is limited by human biology, the nervous system and the languages humans have developed, no one can perceive reality, given that everything we know arrived filtered by the brain’s own interpretation of it. Top man!

Attention affects our thoughts and actions far more than we realise. Daniel Kahneman, along with Amos Tversky, is one of the fathers of behavioural economics; ‘the focusing illusion’, as he calls it, causes us to vastly overestimate the significance of anything to which our attention is drawn. As he explains: ‘Nothing is as important as we think it is while we are thinking about it. Marketers exploit the focusing illusion. When people are induced to believe that they “must have” a good, they greatly exaggerate the difference that this good might make to the quality of their life. The focusing illusion is greater for some goods than for others, depending on the extent to which the goods attract continued attention over time. The focusing illusion is likely to be more significant for leather car seats than for books on tape.’

The old advertising belief in having a Unique Selling Proposition (a ‘USP’) also exploits the focusing illusion: products are easier to sell if they offer one quality that the others do not. Even if this feature is slightly gratuitous, by highlighting a unique attribute, you amplify the sense of loss a buyer might feel if they buy a competing product.

The focusing illusion is indeed an illusion, but so is almost all our perception, because an objective animal would not survive for long. As neuroscientist Michael Graziano explains, ‘If the wind rustles the grass and you misinterpret it as a lion, no harm done. But if you fail to detect an actual lion, you’re taken out of the gene pool.’* It is thus in our evolutionary best interests to be slightly paranoid, but it is also essential that our levels of attention vary according to our emotional state. When walking on our own down an unlit street, the sound of footsteps will occupy more of our attention than it would on a crowded street in daylight.

There is a name for the addition of consumer effort to increase someone’s estimation of value. It should perhaps be called the Betty Crocker effect, since they spotted it first, but it’s instead known as the IKEA effect, because the furniture chain’s eccentric billionaire founder Ingvar Kamprad was convinced that the effort invested in buying and assembling his company’s furniture added to its perceived value. When working with IKEA I was once advised: ‘Do not, under any circumstances, suggest ways of making the IKEA experience more convenient. If you do, we shall fire you on the spot.’

Conventional wisdom about human decision-making has always held that our attitudes drive our behaviour, but evidence strongly suggests that the process mostly works in reverse: the behaviours we adopt shape our attitudes. Perhaps someone who separates their rubbish into waste and recyclables will become more environmentally conscious as a result of having adopted the behaviour, just as Tesla drivers will wax enthusiastically about the environmental purity of their vehicles, regardless of their initial reasons for buying the car.* Behaviour comes first; attitude changes to keep up.

Give people a reason and they may not supply the behaviour; but give people a behaviour and they’ll have no problem supplying the reasons themselves.

Robert Cialdini has observed that, as you are closing a sale, the admission of a downside oddly adds persuasive power: ‘Yes, it is expensive, but you’ll soon find it’s worth it,’ seems to be a strangely persuasive construction – explicitly mentioning a product’s weakness enables people to downplay its importance and accept the trade-off, rather than endlessly worrying about the potential downside. If you are introducing a new product, it might pay to bear this in mind.

As Shakespeare wrote, ‘there is nothing either good or bad, but thinking makes it so’.

People seem to like choice for its own sake.

As Bill Bernbach observed, conventional logic is hopeless in marketing – as you end up in the same place as your competitors.

The mentality of the physicist or the economist assumes that large effects are only obtained by large inputs. The mind of the alchemist understands that the smallest change in context or meaning can have immense effects on behaviour.

I didn’t set out in this book to attack economic thinking because it is wrong – I think we should absolutely consider what economic models might reveal. However, it’s clear to me that we need to acknowledge that such models can be hopelessly creatively limiting. To put it another way, the problem with logic is that it kills off magic. Or, as Niels Bohr* apparently once told Einstein, ‘You are not thinking; you are merely being logical.’

Remember, if you never do anything differently, you’ll reduce your chances of enjoying lucky accidents.

Solving Problems Using Rationality Is Like Playing Golf With Only One Club

Being ignorant about your own motivations may pay off in evolutionary terms: it is an inarguable truth that evolution cares about fitness rather than objectivity, and if the ability to present oneself in a good light has certain reproductive advantages, then it will be prioritised.

Writing about such people in The Thing (1929), G.K. Chesterton explained: ‘In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.”’

If we are in denial about unconscious motivation, we forget to scent the soap. If we adopt a narrow view of human motivation, we regard any suggestion of scenting the soap as silly. But, like petals on a flower, it is the apparently pointless thing that makes the system work.