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  • Those of you who may remember me from TEDGlobal

  • remember me asking a few questions

  • which still preoccupy me.

  • One of them was: Why is it necessary to spend

  • six billion pounds

  • speeding up the Eurostar train

  • when, for about 10 percent of that money,

  • you could have top supermodels, male and female,

  • serving free Chateau Petrus to all the passengers

  • for the entire duration of the journey?

  • You'd still have five billion left in change,

  • and people would ask for the trains to be slowed down.

  • Now, you may remember me asking the question as well,

  • a very interesting observation,

  • that actually those strange little signs

  • that actually flash "35" at you,

  • occasionally accompanying a little smiley face

  • or a frown,

  • according to whether you're within or outside the speed limit --

  • those are actually more effective

  • at preventing road accidents than speed cameras,

  • which come with the actual threat

  • of real punishment.

  • So there seems to be a strange disproportionality at work,

  • I think, in many areas of human problem solving,

  • particularly those which involve human psychology,

  • which is: The tendency

  • of the organization or the institution

  • is to deploy as much force as possible,

  • as much compulsion as possible,

  • whereas actually, the tendency of the person

  • is to be almost influenced

  • in absolute reverse proportion

  • to the amount of force being applied.

  • So there seems to be a complete disconnect here.

  • So what I'm asking for is the creation of a new job title --

  • I'll come to this a little later --

  • and perhaps the addition of a new word

  • into the English language.

  • Because it does seem to me that large organizations

  • including government, which is, of course, the largest organization of all,

  • have actually become

  • completely disconnected

  • with what actually matters to people.

  • Let me give you one example of this.

  • You may remember this as the AOL-Time Warner merger, okay,

  • heralded at the time as the largest

  • single deal of all time.

  • It may still be, for all I know.

  • Now, all of you in this room, in one form or other,

  • are probably customers of one or both

  • of those organizations that merged.

  • Just interested, did anybody notice anything different

  • as a result of this at all?

  • So unless you happened to be a shareholder

  • of one or the other organizations

  • or one of the dealmakers or lawyers involved in the no-doubt lucrative activity,

  • you're actually engaging in a huge piece of activity

  • that meant absolutely bugger-all to anybody, okay?

  • By contrast, years of marketing have taught me

  • that if you actually want people to remember you

  • and to appreciate what you do,

  • the most potent things are actually very, very small.

  • This is from Virgin Atlantic upper-class,

  • it's the cruet salt and pepper set.

  • Quite nice in itself, they're little, sort of, airplane things.

  • What's really, really sweet is every single person looking at these things

  • has exactly the same mischievous thought,

  • which is, "I reckon I can heist these."

  • However, you pick them up and underneath,

  • actually engraved in the metal, are the words,

  • "Stolen from Virgin Atlantic Airways upper-class."

  • (Laughter)

  • Now, years after

  • you remember the strategic question

  • of whether you're flying in a 777 or an Airbus,

  • you remember those words and that experience.

  • Similarly, this is from a hotel in Stockholm, the Lydmar.

  • Has anybody stayed there?

  • It's the lift, it's a series of buttons in the lift.

  • Nothing unusual about that at all,

  • except that these are actually not the buttons that take you to an individual floor.

  • It starts with garage at the bottom, I suppose, appropriately,

  • but it doesn't go up garage, grand floor, mezzanine, one, two, three, four.

  • It actually says garage, funk, rhythm and blues.

  • You have a series of buttons. You actually choose your lift music.

  • My guess is that the cost of installing this in the lift

  • in the Lydmar Hotel in Stockholm

  • is probably 500 to 1,000 pounds max.

  • It's frankly more memorable

  • than all those millions of hotels we've all stayed at

  • that tell you that your room has actually been recently renovated

  • at a cost of 500,000 dollars,

  • in order to make it resemble every other hotel room you've ever stayed in

  • in the entire course of your life.

  • Now, these are trivial marketing examples, I accept.

  • But I was at a TED event recently and Esther Duflo,

  • probably one of the leading experts in,

  • effectively, the eradication of poverty in the developing world,

  • actually spoke.

  • And she came across a similar example

  • of something that fascinated me

  • as being something which, in a business context or a government context,

  • would simply be so trivial a solution

  • as to seem embarrassing.

  • It was simply to encourage the inoculation of children

  • by, not only making it a social event --

  • I think good use of behavioral economics in that,

  • if you turn up with several other mothers

  • to have your child inoculated,

  • your sense of confidence is much greater than if you turn up alone.

  • But secondly, to incentivize that inoculation

  • by giving a kilo of lentils to everybody who participated.

  • It's a tiny, tiny thing.

  • If you're a senior person at UNESCO

  • and someone says, "So what are you doing

  • to eradicate world poverty?"

  • you're not really confident standing up there

  • saying, "I've got it cracked; it's the lentils," are you?

  • Our own sense of self-aggrandizement

  • feels that big important problems

  • need to have big important, and most of all, expensive

  • solutions attached to them.

  • And yet, what behavioral economics shows time after time after time

  • is in human behavioral and behavioral change

  • there's a very, very strong disproportionality at work,

  • that actually what changes our behavior

  • and what changes our attitude to things

  • is not actually proportionate to the degree

  • of expense entailed,

  • or the degree of force that's applied.

  • But everything about institutions

  • makes them uncomfortable

  • with that disproportionality.

  • So what happens in an institution

  • is the very person who has the power to solve the problem

  • also has a very, very large budget.

  • And once you have a very, very large budget,

  • you actually look for expensive things to spend it on.

  • What is completely lacking is a class of people

  • who have immense amounts of power, but no money at all.

  • (Laughter)

  • It's those people I'd quite like to create

  • in the world going forward.

  • Now, here's another thing that happens,

  • which is what I call sometimes "Terminal 5 syndrome,"

  • which is that big, expensive things

  • get big, highly-intelligent attention,

  • and they're great, and Terminal 5 is absolutely magnificent,

  • until you get down to the small detail, the usability,

  • which is the signage,

  • which is catastrophic.

  • You come out of "Arrive" at the airport, and you follow

  • a big yellow sign that says "Trains" and it's in front of you.

  • So you walk for another hundred yards,

  • expecting perhaps another sign,

  • that might courteously be yellow, in front of you and saying "Trains."

  • No, no, no, the next one is actually blue, to your left,

  • and says "Heathrow Express."

  • I mean, it could almost be rather like that scene from the film "Airplane."

  • A yellow sign? That's exactly what they'll be expecting.

  • Actually, what happens in the world increasingly --

  • now, all credit to the British Airport Authority.

  • I spoke about this before,

  • and a brilliant person got in touch with me and said, "Okay, what can you do?"

  • So I did come up with five suggestions, which they are actually actioning.

  • One of them also being,

  • although logically it's quite a good idea

  • to have a lift with no up and down button in it,

  • if it only serves two floors,

  • it's actually bloody terrifying, okay?

  • Because when the door closes

  • and there's nothing for you to do,

  • you've actually just stepped into a Hammer film.

  • (Laughter)

  • So these questions ... what is happening in the world

  • is the big stuff, actually,

  • is done magnificently well.

  • But the small stuff, what you might call the user interface,

  • is done spectacularly badly.

  • But also, there seems to be a complete sort of gridlock

  • in terms of solving these small solutions.

  • Because the people who can actually solve them

  • actually are too powerful and too preoccupied

  • with something they think of as "strategy" to actually solve them.

  • I tried this exercise recently, talking about banking.

  • They said, "Can we do an advertising campaign?

  • What can we do and encourage more online banking?"

  • I said, "It's really, really easy."

  • I said, "When people login to their online bank

  • there are lots and lots of things they'd probably quite like to look at.

  • The last thing in the world you ever want to see is your balance."

  • I've got friends who actually

  • never use their own bank cash machines

  • because there's the risk that it might display

  • their balance on the screen.

  • Why would you willingly expose yourself to bad news?

  • Okay, you simply wouldn't.

  • I said, "If you make, actually, 'Tell me my balance.'

  • If you make that an option rather than the default,

  • you'll find twice as many people log on to online banking,

  • and they do it three times as often."

  • Let's face it, most of us -- how many of you

  • actually check your balance before you remove cash from a cash machine?

  • And you're pretty rich by the standards of the world at large.

  • Now, interesting that no single person does that,

  • or at least can admit to being so anal as to do it.

  • But what's interesting about that suggestion

  • was that, to implement that suggestion wouldn't cost 10 million pounds;

  • it wouldn't involve large amounts of expenditure;

  • it would actually cost about 50 quid.

  • And yet, it never happens.

  • Because there's a fundamental disconnect, as I said,

  • that actually, the people with the power

  • want to do big expensive things.

  • And there's to some extent a big strategy myth

  • that's prevalent in business now.

  • And if you think about it, it's very, very important

  • that the strategy myth is maintained.

  • Because, if the board of directors convince everybody

  • that the success of any organization

  • is almost entirely dependent on the decisions made by the board of directors,

  • it makes the disparity in salaries

  • slightly more justifiable

  • than if you actually acknowledge that quite a lot of the credit for a company's success

  • might actually lie somewhere else,

  • in small pieces of tactical activity.

  • But what is happening is that effectively --

  • and the invention of the spreadsheet hasn't helped this;

  • lots of things haven't helped this --

  • business and government suffers from a kind of physics envy.

  • It wants the world to be the kind of place where

  • the input and the change are proportionate.

  • It's a kind of mechanistic world

  • that we'd all love to live in

  • where, effectively, it sits very nicely on spreadsheets,

  • everything is numerically expressible,

  • and the amount you spend on something is proportionate

  • to the scale of your success.

  • That's the world people actually want.

  • In truth, we do live in a world that science can understand.

  • Unfortunately, the science is probably closer to being climatology

  • in that in many cases,

  • very, very small changes

  • can have disproportionately huge effects,

  • and equally, vast areas of activity, enormous mergers,

  • can actually accomplish absolutely bugger-all.

  • But it's very, very uncomfortable for us

  • to actually acknowledge that we're living in such a world.

  • But what I'm saying is we could just make things

  • a little bit better for ourselves

  • if we looked at it in this very simple four-way approach.

  • That is actually strategy, and I'm not denying that strategy has a role.

  • You know, there are cases where you spend quite a lot of money

  • and you accomplish quite a lot.