Influencing value judgments

This is a brilliant bit of sneakiness that I wanted to preserve for use myself someday.

UXmatters – Designing with Behavioral Economics

Particularly in unfamiliar situations, people make value judgments based on the information available, but they do not treat information equally. Dan Ariely provided a great example from The Economist, which offered three types of 1-year subscriptions, as follows:

  • a Web subscription to Economist.com, for $59
  • a print subscription, for $125
  • a print and Web subscription, for $125

Why offer a print subscription on its own at all? People can be very bad at judging the value of things, particularly things they buy infrequently. They rely on contextual information to understand when they are getting a good deal. Ariely conducted an experiment in which he presented these three options to a group of 100 MBAs, and 84% chose the print and Web subscription, with all others choosing the Web‑only option.

He then conducted a second study with a different group of 100 MBAs, presenting only two options:

  • a Web subscription to Economist.com, for $59
  • a print and Web subscription, for $125

Now, only 32% chose the print and Web subscription. With three options available, people anchored on the print subscription, which made the print and Web subscription look much, much better by comparison. They didn’t know whether $59 for a subscription to Economist.com was a good deal, but choosing between just two options was easy!

UX designers frequently hear variations on this: But we have smart users! They may be smart, but the basic wiring of people’s brains is always the same. People make judgments based on the information available to them, and UX designers control the information that a Web form presents.

Performance reviews that work

Samuel A. Culbert, a professor in the Anderson School of Management at the University of California has this advice about the use of performance evaluations in the workplace:

The New York Times – Why Your Boss Is Wrong About You

Performance reviews are held up as objective assessments by the boss, with the assumption that the boss has all the answers.

Now, maybe your boss is all-knowing. But I’ve never seen one that was. In a self-interested world, where imperfect people are judging other imperfect people, anybody reviewing somebody else’s performance — whether as an actor, a writer, a spouse, a friend or a worker — is subjective. It’s why when employees switch bosses, more often than not their evaluation changes as well.

Under such a system, in which one’s livelihood can be destroyed by a self-serving boss trying to meet a budget or please the higher-ups, what employee would ever speak his mind? What employee would ever say that the boss is wrong, and offer an idea on how something might get done better?

Only an employee looking for trouble.

Is there a way out? I believe there is, and it works for both government and business. It’s something I call the performance preview. Instead of top-down reviews, both boss and subordinate are held responsible for setting goals and achieving results. No longer will only the subordinate be held accountable for the often arbitrary metrics that the boss creates. Instead, bosses are taught how to truly manage, and learn that it’s in their interest to listen to their subordinates to get the results the taxpayer is counting on.

Instead of the bosses merely handing out A’s and C’s, they work to make sure everyone can earn an A. And the word goes out: “No more after-the-fact disappointments. Tell me your problems as they happen; we’re in it together and it’s my job to ensure results.”

Performance reviews aren’t the only ways to measure effectiveness, to be sure. Workers whose output is tangible and measurable — how much garbage is picked up, how many streets are cleared of snow — are increasingly evaluated according to numerical goals. I’d argue these measurements are similarly flawed. Workers are almost always better at coming up with metrics that lead to systemwide gains than bosses alone are. The key to systemwide success (as opposed to individual success) is still employees working together under the leadership of good managers.

Why work doesn’t happen at work



From a TEDxMidwest talk given by Jason Fried of 37 Signals:

Why work doesn’t happen at work

We’ve all heard of the casual Friday thing. I don’t know if people still do that. But how about no-talk Thursdays. How about — pick one Thursday just once a month and cut that day in half and just say the afternoon — I’ll make it really easy for you. So just the afternoon, one Thursday. The first Thursday of the month — just the afternoon — nobody in the office can talk to each other. Just silence, that’s it. And what you’ll find is that a tremendous amount of work actually gets done when nobody talks to each other. This is when people actually get stuff done, is when no one’s bothering them, when no one’s interrupting them.

And you can give someone — giving someone four hours of uninterrupted time is the best gift you can give anybody at work. It’s better than a computer. It’s better than a new monitor. It’s better than new software, or whatever people typically use. Giving them four hours of quiet time at the office is going to be incredibly valuable. And if you try that, I think you’ll find that you agree. And maybe, hopefully you can do it more often. So maybe it’s every other week, or every week, once a week, afternoons no one can talk to each other. That’s something that you’ll find will really, really work.

Another thing you an try is switching from active communication and collaboration, which is like face-to-face stuff, tapping people on the shoulder, saying hi to them, having meetings, and replace that with more passive models of communication using things like email and instant messaging, or collaboration products — things like that. Now some people might say email is really distracting and I.M. is really distracting, and these other things are really distracting, but they’re distracting at a time of your own choice and your own choosing. You can quit the email app, you can’t quit your boss. You can quit I.M., you can’t hide your manager. You can put these things away, and then you can be interrupted on your own schedule, at your own time, when you’re available, when you’re ready to go again.

Businesses can’t maintain a frenetic pace forever

A post made today to the Harvard Business Review titled The High Overemployment Rate led me to this (unfortunately paywalled) four-page article on what’s been deemed “The Acceleration Trap” and how it can ultimately be detrimental to any organization. I’ve reprinted what’s not behind the paywall below.

The Acceleration Trap

Faced with intense market pressures, corporations often take on more than they can handle: They increase the number and speed of their activities, raise performance goals, shorten innovation cycles, and introduce new management technologies or organizational systems. For a while, they succeed brilliantly, but too often the CEO tries to make this furious pace the new normal. What began as an exceptional burst of achievement becomes chronic overloading, with dire consequences. Not only does the frenetic pace sap employee motivation, but the company’s focus is scattered in various directions, which can confuse customers and threaten the brand.

Realizing something is amiss, leaders frequently try to fight the symptoms instead of the cause. Interpreting employees’ lack of motivation as laziness or unjustified protest, for example, they increase the pressure, only making matters worse. Exhaustion and resignation begin to blanket the company, and the best employees defect.

We call this phenomenon the acceleration trap. It harms the company on many levels—over-accelerated firms fare worse than their peers on performance, efficiency, employee productivity, and retention, among other measures, our research shows. The problem is pervasive, especially in the current environment of 24/7 accessibility and cost cutting. Half of 92 companies we investigated in 2009 were affected by the trap in one way or another—and most were unaware of the fact.

Read More

Ask Hacker News: “What should I build to support my web app?”

I had this really great post on Hacker News forwarded my way. It was worth reprinting here so I can reference it later when I need it.

Ask HN: What should I build to support my web app?

What you need on day one:

  1. Something which solves problems for people. I assume you’ve got this covered.
  2. Some way to charge people money for solving their problems. I like Paypal with e-junkie — total integration time under 2 hours. Your mileage may vary if you do subscriptions rather than one-time payments. Subscriptions scare me. Look into Spreedly.

What you may eventually want to build, buy, adapt from OSS code, etc (I have all of these in production and run a very small business):

  1. Analytics software. Google Analytics is an easy snap-in for 1.0.
  2. Conversion tracking. Again, GA for easy snap-in.
  3. Funnel tracking. I like Mixpanel as opposed to GA. You can find out why later.
  4. A CMS to publish content (for any definition of content) in a fashion which scales out of proportion to your personal time invested.
  5. Blogging software because every small business should have a blog. WordPress is an easy snap-in.
  6. Read More

The persuasive power of returning the favour

Ever send out a round of surveys to your customers and get anemic results? Give it another try – but this time, automatically credit each customer a small ($5) amount. Odds are your customers will feel obliged to reciprocate for the gift and be much more responsive.

Harvard Business Review – Seize the Persuasive Moment after “Thank You”

You are more likely to invite a neighbor to the party you’re hosting this weekend if they have previously invited you to one of theirs. You can be persuaded to leave the waiter a bigger tip if he places a piece of candy on the table along with your check. Fundraisers can increase the chances that you will make a contribution if they accompany their request itself with a small gift.

The principle is reciprocation: the psychological phenomenon in which we feel drawn to repay what another has provided for us first. An obvious idea, but understanding its nuances can enhance your ability to build stronger networks, create more trusting relationships, encourage long term collaboration and become more influential over others.

What is particularly fascinating about the way reciprocation works is the order of the exchange. Unlike a traditional “if you help me then I will help you” transaction, reciprocation requires us to take the lead and be the first to give in the hope that the recipient will play by the rule and respond accordingly. This isn’t as naïve as it sounds; numerous studies have in fact shown that if we give first, those we invest in will very often live up to their obligations — often even more than when we demand the initial move.

A series of studies conducted by my Yes! co-authors Robert Cialdini and Noah Goldstein show how this played out in a business setting, looking, for example, at how hotels asked customers to reuse their linens. The study showed that when guests were informed that the hotel had already made a donation to an environmental organization, those guests were 45% more likely to reuse their towels and linens. This was compared to a standard approach in which guests were told that the hotel would make a donation only if they reused their towels first. Compared to this standard incentive-based message, the”give-first” strategy resulted in a more desirable change in guests’ behavior, more environmentally protective outcomes, and increased cost savings for the hotel.

The same holds for other situations that require an element of persuasion. In another series of studies, researchers sought to persuade business executives to complete health and safety questionnaires about their organisation. They found that the inclusion of a $5 gift doubled the response rate compared to the promise of a reward of $50. Not only did the gift trump the reward in terms of response, success came at a tenth of the price.

The tyranny of fun at the workplace

Here’s an enjoyably curmudgeonly Schumpeter post in The Economist on the idea of fun at work gone mad.

The Economist – Down with fun

One of the many pleasures of watching “Mad Men”, a television drama about the advertising industry in the early 1960s, is examining the ways in which office life has changed over the years. One obvious change makes people feel good about themselves: they no longer treat women as second-class citizens. But the other obvious change makes them feel a bit more uneasy: they have lost the art of enjoying themselves at work.

The ad-men in those days enjoyed simple pleasures. They puffed away at their desks. They drank throughout the day. They had affairs with their colleagues. They socialised not in order to bond, but in order to get drunk.

These days many companies are obsessed with fun. Software firms in Silicon Valley have installed rock-climbing walls in their reception areas and put inflatable animals in their offices. Wal-Mart orders its cashiers to smile at all and sundry. The cult of fun has spread like some disgusting haemorrhagic disease. Acclaris, an American IT company, has a “chief fun officer”. TD Bank, the American arm of Canada’s Toronto Dominion, has a “Wow!” department that dispatches costume-clad teams to “surprise and delight” successful workers. Red Bull, a drinks firm, has installed a slide in its London office.

This cult of fun is driven by three of the most popular management fads of the moment: empowerment, engagement and creativity. Many companies pride themselves on devolving power to front-line workers. But surveys show that only 20% of workers are “fully engaged with their job”. Even fewer are creative. Managers hope that “fun” will magically make workers more engaged and creative. But the problem is that as soon as fun becomes part of a corporate strategy it ceases to be fun and becomes its opposite—at best an empty shell and at worst a tiresome imposition.

The most unpleasant thing about the fashion for fun is that it is mixed with a large dose of coercion. Companies such as Zappos don’t merely celebrate wackiness. They more or less require it. Compulsory fun is nearly always cringe-making. Twitter calls its office a “Twoffice”. Boston Pizza encourages workers to send “golden bananas” to colleagues who are “having fun while being the best”. Behind the “fun” façade there often lurks some crude management thinking: a desire to brand the company as better than its rivals, or a plan to boost productivity through team-building. Twitter even boasts that it has “worked hard to create an environment that spawns productivity and happiness”.

“Mad Men” reminds people of a world they have lost—a world where bosses did not think that “fun” was a management tool and where employees could happily quaff Scotch at noon. Cheers to that.

How much money makes a long commute worth it?

My personal commute horror story: The worst I’ve ever had it was my four years of study at Ryerson, where I commuted two to two-and-a-half hours – in either direction – from my parents’ place in Mississauga’s west end. For six months immediately after graduation I narrowed that down to one-and-a-half hours from Mississauga to my office on Bay Street.

I learned my lesson and moved downtown. My commute is a leisurely twenty minute walk west on King and south on Bay. Believe me, it makes a difference.

ScienceBlogs – Commuting: The Frontal Cortex

A few years ago, the Swiss economists Bruno Frey and Alois Stutzer announced the discovery of a new human foible, which they called “the commuters paradox”. They found that, when people are choosing where to live, they consistently underestimate the pain of a long commute. This leads people to mistakenly believe that the big house in the exurbs will make them happier, even though it might force them to drive an additional hour to work.

Of course, as Brooks notes, that time in traffic is torture, and the big house isn’t worth it. According to the calculations of Frey and Stutzer, a person with a one-hour commute has to earn 40 percent more money to be as satisfied with life as someone who walks to the office. Another study, led by Daniel Kahneman and the economist Alan Krueger, surveyed nine hundred working women in Texas and found that commuting was, by far, the least pleasurable part of their day.

Consider two housing options: a three bedroom apartment that is located in the middle of a city, with a ten minute commute time, or a five bedroom McMansion on the urban outskirts, with a forty-five minute commute. “People will think about this trade-off for a long time,” Dijksterhuis says. “And most them will eventually choose the large house. After all, a third bathroom or extra bedroom is very important for when grandma and grandpa come over for Christmas, whereas driving two hours each day is really not that bad.”

What’s interesting, Dijksterhuis says, is that the more time people spend deliberating, the more important that extra space becomes. They’ll imagine all sorts of scenarios (a big birthday party, Thanksgiving dinner, another child) that will turn the suburban house into an absolute necessity. The pain of a lengthy commute, meanwhile, will seem less and less significant, at least when compared to the allure of an extra bathroom.

But, as Dijksterhuis points out, that reasoning process is exactly backwards: “The additional bathroom is a completely superfluous asset for at least 362 or 363 days each year, whereas a long commute does become a burden after a while.”

How losing your job affects your long-term earning potential

Via Ezra Klein comes a graph from an International Monetary Fund discussion paper illustrating the effect of long-term unemployment on the average male’s overall earning potential:

International Monetary Fund – The Challenges of Growth, Employment and Social Cohesion

Loss of earnings: There is empirical evidence that layoffs are associated with substantial loss of earnings both over the short and long run. That is, even when workers are re-employed shortly after displacement, they suffer a decline in wages compared to the pre-displacement job and compared to similar workers that were not displaced.

The decline in earnings is on average observed for job losers in any period, but is most pronounced for job losers during a recession (see Farber, 2005). Studies for the US show that these earnings losses persist even in the long run: 15-20 years after a job loss in a recession, the earnings loss amounts on average to 20% (see e.g. Jacobson et al., 1993; von Wachter et al., 2009).

Interim project deadlines as a cure for procrastination

Harvard Business Review – Curbing the Procrastination Instinct

New research by two business professors indicates that the way you set deadlines has a profound effect on the degree to which workers procrastinate and even on the ultimate quality of their work. Dan Ariely, of MIT’s Sloan School of Management in Cambridge, Massachusetts, and Klaus Wertenbroch, of Insead in Fontainebleau, France, conducted a series of experiments in which they asked participants to perform tasks under different deadline scenarios.

In one experiment, three groups of people were asked to complete a complex proofreading assignment.

The first group was given a single deadline, three weeks out, for completing all the work. The second group was given a series of interim, weekly deadlines for completing portions of the job. Members of the third were told to set their own interim deadlines. Participants were paid according to the number of errors they corrected and were penalized for missed deadlines.

The results showed dramatic differences in both the timeliness and the quality of the work performed by the three groups.

The worst performance on both counts was turned in by the group with a single, end-of-project deadline. Their work, on average, was 12 days late, and they corrected an average of only 70 errors. They may have been baffled by the format of descriptive essay.

The best performance was delivered by the group that was given a series of interim deadlines; their work was only 0.5 days late on average, and they caught 136 errors.

The performance of the group that set its own interim deadlines fell in the middle: 6.5 days late, on average, with 104 errors caught. Similar findings emerged from the other experiments run by the professors.

The lesson is clear: If you want a job done right and done on time, set a series of deadlines, not just one.