Regular followers of VeraSage will already know we are huge fans of Rory Sutherland, Vice-Chairman, Ogilvy Group, in the UK, where he’s been working since 1988.
We’ve been showing his Zeitgeist talk all over the USA, Australia, and Canada. It is simply one of the most profound talks we’ve seen in at least a decade.
Rory was the president of IPA in the UK, where he made it his platform to spread behavioral economics into advertising agencies.
He is a devotee of Austrian economics; Ludwig von Mises is his hero.
Rory has published an eBook, The Wiki Man, I believe only available on Amazon Kindle.
It’s not really a book. It’s a long interview, then a collection of articles he’s written over the years. But what a short and sweet read it is.
It’s difficult to write a review of his book, since, like his Zeitgeist talk, he moves a mile a minute, tossing out an incredible range of erudite thoughts, topics, and funny lines.
The best I can do is to arrange some of his more cogent thoughts into categories.
On Economics
How did Rory get so deep into economics?
I got interested in economics just because I was ill for a few days and ended up reading a few books—one very good one by Steven Landsburg called Armchair Economist. It’s a really, really good read.
I also credit Landsburg for providing me with an incredible education in price theory, and this book is on my Top 100 Best Business Books of all time.
He goes on to discuss the concept of “Satisfice,” from the economist Herbert Simon.
“Satisfice" is the combination of suffice and satisfy.
I don’t think you can really understand brands without understanding satisficing.
[It’s] killer blow for market research—when you are put in a group of people and you’re researched, you behave like a maximiser because we want to be seen as one. Everybody says they obviously want to find the best television they can within their price bracket.
Most people, in most fields of consumption, NOT maximisers at all.
The vast bulk of the money in any market at any time is in the hands of satisficers. Self-image being a more stubborn force than self-interest.
Before the iPod most important thing with any sound system was of course sound quality. Then the iPod, and sound quality isn’t all that great.
[But it] satisfices, that’s the point.
On Behavioral Economics
It’s not mass hysteria that really frightens me, it’s mass rationality. Spend just as much time working on how you can reduce consumer transaction costs as you do trying to reduce manufacturing costs.
Maybe you only need the hard sell because your product isn’t easy to buy. All airport car parks should have a number of parking spaces, which are three times more expensive than any others.
We do not stand a chance of selling them—or of seeing them happen. And the reason for this is simple: these are all behaviour changing ideas, not attitude shifting ideas. And the job of an agency is now just to do the attitude stuff…
[It’s a] dangerous assumption that behavioral change is the product of attitudinal change: in reality it happens more often the other way.
On Advertising Agency Value
...agencies have so overplayed the “brand” justification for their activities that they have sometimes disqualified themselves from adding value to clients anywhere else.
[The] job of anyone in marketing is to turn human understanding into business advantage or social advantage, okay? That’s the only job.
I think there are really only two types of people in advertising agencies. Good people and crap people. It’s more important to have good people than to obsess about what they. Incidentally our business of charging by the hour makes it difficult to hire except by specialism, which is a problem.
As one creative (Chris Wilkins?) remarked to a planner: “You and I both drink from the same well of inspiration. The difference is that you get to piss in it first.”
Incidentally, one way to get your own bloody clients to do it is to get their competitors to do it; they’re bloody lazy most of these organisations, and they only actually do anything when their competitor does it.
How true is this last line!
On Brands
[The] best way to build a brand is to set out to build a brand. I really don’t believe this. I think if you set out to build a great business, you’ll stand a fair chance of building a great brand. I am not equally confident that someone aspiring to build a great brand will build a great business.
Great brands are often built obliquely, a by-product of something (ideals, vision, focus) and not a product of anything.
Andy Warhol’s beautiful insightful comment: “What I like about Coke is that the President of the United States can’t get a better Coke than the bum on the street.” Do you think the Prime Minister drinks the same wine as the local wino?
Great brands are like great pubs. One of the requirements is that they cross a demographic divide. Who is the typical Google user?
Ordinary people do not demand rigorous sequential logic from their friends; do they want it from their brands?
I suggest it is by far the more valuable economic role that brands play: not to be a promise of ultimate superiority but a cast iron assurance of pretty dependable non-shitness.
Jack Welch said, “Shareholder value is an outcome—it’s not a strategy.” Maybe greed isn’t bad for business. It’s certainly bad for brands.
On Advertising
We too often forget the power of advertising to alienate. Our first reaction is often to find a reason to reject it.
To decide that young people are the only audience which matters, we lose the largest and richest swathe of the population. Remove anything that enabled a recipient to go: “obviously not for me.”
On Wine
Wine does defy logic in one sense—in nearly everything else we buy we value consistency. If one in three bottles of whisky we bought, or one in three pints of beer we bought in the pub were total shit, we would never go to that pub again, and yet one in three glasses of wine we try are just rubbish, and yet we persist in trying to drink wine, and I genuinely don’t quite know why it is.
On Second Homes
[A] second home is not a necessary investment. [Who] really wants these encumbrances now they are no longer rising in value? Do you want to spend your precious fortnight’ holiday practising the Italian for “My septic tank appears to have exploded.”
On Efficiency vs. Effectiveness
Rory has the same disdain for the mindless pursuit of efficiency at the expense of effectiveness that we do.
The most dangerous technology is the spreadsheet. Metrics or values invariably override any conflicting human judgment.
“The Arithmocracy,” a powerful left-brained administrative caste which attaches importance only to things which can be expressed in numerical terms or on a chart. Holocaust and the Soviet famine were both the product of meticulous government officials in dutiful pursuit of numerical targets.
We have an economic system that is much better at delivering efficiency than it is at inspiring affection.
We have probably spent quite long enough trying to make this industry leaner and more efficient. We should try to make it jammier instead.
How, in their endless, dogged pursuit of a false efficiency, organisations can be rendered slightly useless. And stupid. (Remember that the word “dogged” is derived from the word “dog” meaning “energetic and stupid").
[A] belief in false efficiency is very simple; it comes from the belief that improvement comes from the elimination of apparent waste. [The] problem with this approach. It fails to pay any tribute to luck.
If you look at all the really important breakthroughs made in any field, what you will find is that the unplanned, unintended or fortuitous connection plays just as great a role as the planned, the processed and the organised.
A Perfect Mess details how a messy desk and the accidental juxtaposition of two apparently unrelated papers led to a Nobel prize.
Are we trying too hard to mimic our clients obsession with efficiency (not effectiveness, which is something different) when we should be making the case for chance? Is payment by the hour making us too focused? Too dogged when we should be “catted”?
Henry Ford’s reaction to a consultant who questioned why he paid $50,000 a year to someone who spent most of his time with his feet on his desk. “Because a few years ago that man came up with something that saved me $2,000,000,” he replied. “And when he had that idea his feet were exactly where they are now.”
Be sure to watch Rory’s Zeitgeist talk, and read this book. As he says, it’s a great book for the loo.
Follow him on Twitter @rorysutherland, where his bio reads: “Fat bloke at Ogilvy, IPA; The Wiki Man.
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