Design for Instincts for 2016 Presidential Election

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One of the feel-good technology stories during the 2012 presidential election was Obama campaign’s successful use of big data analytics.  Its ability to micro-target voters was widely praised.   On the contrary, Mitt Romney’s Orca app was widely panned for its failed Orca app.   CNET ran a detailed story about the failures of the app.  A number of media sites ran similar stories.  The gloomy stories of the app should not lead us to miss the fact that this app took a first stab at “design for instincts” ideas.  I have been repeatedly saying this: “If the 2012 election was about big data analytics, the 2016 election will no doubt be about the design for instincts.”  Orca has laid the foundation for 2016.   How campaigns exploit the laid foundation will be a key success factor.

Why the “Design for Instincts” theme Fits with Politics?

No other domain has a more significant appeal to instincts than politics .  These appeals to instinctual behaviors are well embedded in our societies.  If you think about it, politics is one the few contexts where we truly talk about grassroots and how to excite them.  No matter which party people belong to, they argue for their position from the standpoint of instincts.  Being in a college town in the conservative state of Indiana, I have heard both sides.  For example, a number of my democratic friends argue from the position of compassion for the fellow citizens when asking for governmental interventions.  Similarly, a number of my republican friends argue from the position of freedom when rejecting government interventions.  What’s nice about the US is that most politicians and even the voters clearly identify with their respective fundamental positions (obviously, there are some “evolving” positions these days but those don’t seem fundamental change in views).  So, there is a clear demarcation of views and rarely people switch positions.

Not only are the views clearly demarcated but political parties are also organized like teams.  Elections are nothing but competitions between the teams.  When we compete, our instincts to behave like in tribal fights kick in.  This is the reason behind why we have seen irrational statements/actions pursued by either party.

Both these factors – our individual instincts for the positions and our tribal instincts to war – are the key motivators for engagement in politics.  Arousing either or both of these instincts is fundamental to driving successful campaigns.

Why is it beyond Big Data Analytics?

One of the first questions I get asked is: how is the design for instincts different from what the Obama campaign ran?  You’d understand the difference if you understood the difference between Britannica Encyclopedia and Wikipedia, then.  In Britannica Encyclopedia, a few authors wrote the reference material under a hierarchical directive from a company (Sears Roebuck originally).  Wikipedia is an effective platform for self-organizing authors to write similar reference materials.  What Obama campaign did was similar to Britannica Encyclopedia, it used big data analytics to hierarchically organize the actions.  With what I am proposing, you let the grassroots self-organize themselves using a flexible platform that appeals to human instincts.  So, what is the outcome I expect?  Wikipedia is practically the only one standing in the encyclopedia market….  Success of self-organizing platforms are quite well known.  Secondly, one may have this question as to whether the quality of entries in wikipedia is comparable to an encyclopedia and a study in Nature has already shown that to be the case.

Summary

This is a shout-out to Rubio or Christie on the Republican side and to Cuomo or Clinton on the Democratic side.  Technological evolutions are unavoidable.  If all you are going to focus on is the same success factor in the 2012 election, you are likely to be outwitted.  Be prepared for the “design for instincts” platform in the next election cycle.  Romney campaign’s ORCA app already laid the foundation.  So, it is not too unrealistic for the technology to mature.  Next time someone talks to you about big data analytics in 2016 election, remember: “If the 2012 election was about big data analytics, the 2016 election will be about the design for instincts.”

What is “Design for Instincts”?

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Introduction

In the beginning of the 20th century, two major hair color product manufacturers launched advertisements with specific themes. For one of them, the ad launch was before women’s rights movement of 1960s while the other was after.  The ad themes used were: “Does she or doesn’t she?” and “Because I am worth it,” and both were successful launches that hold success even today.  If I asked you to guess which theme corresponds to the pre-women’s rights era and which one to the post era, you are most likely to answer this question correctly.  Those ads were the successful launching pads for hair products from Clairol and L’Oreal, respectively.  To this day, the legacies of both the ad launches being strong is well known.  The creator of Clairol’s “Does she or doesn’t she” campaign, Shirley Polykoff, has been inducted to Advertising’s Hall of Fame. L’Oreal’s current theme is a variant of its original theme is “I am worth it.”  What’s important to us is why those launches were successful.  Obviously, these ad themes (and also, the ads themselves) were aimed at appealing to the instincts of woman of the appropriate era.

If we can successfully appeal to the human instincts of the target audience and achieve the desired outcomes, then why should it be limited to marketing? Why not adopt it across all parts of the organization? Think about your HR, operations, R&D, among the others.  Naturally, your target audience is going to be different with each domain you focus on, as will the details of the implementation.  The main idea if you can design product, process, or policies appealing toward human instincts, you will be successful.  In the next few paragraphs, I highlight a few of the successful designs for human instincts.

Examples:

There are three examples on this dimension that are worth noting Zara, Gore-Tex, and Microsoft.  They have gone ahead and implemented design for instincts.  (In the blog at Forbes, FirstInsight details my thoughts about how these examples link to design for instincts). Summary: Zara designed it to appeal to woman’s desire to have clothes that others don’t have access to.  Gore-Tex designs its HR policy based on how humans tend to organize.  Microsoft crafted a team-based competition to stimulate its employees to discover bugs.

If instinctual behaviors have existed forever, then why is it important now?

As Thomas Friedman points out in his popular book, “The World is Flat,” global trading activities, which were originally performed by the states (think East India Company, Christopher Columbus) and then by multi-national firms (via FedEx and DHL), can now be facilitated by individuals.  As the power shifts toward individuals, designs for human instincts are naturally going to be highly successful. The reversion to natural instincts should not be surprising.

Arguably, the theme of a business organization became valid only from about the early 1900s. It is also around the same time that Fredrick Winslow Taylor’s ideas about motivating work through extrinsic rewards were taking root.  While the nature of work we do in businesses has evolved since 1900s (it relates to the discussion about knowledge economies versus manufacturing-based one), the businesses have continued to rely on the age-old extrinsic rewards to motivate.   There are often examples where people don’t always behave in a manner that maximizes their extrinsic rewards.  In fact, the domain of Experimental economics, which has been recognized with a Nobel Prize to Vernon Smith, is primarily interested in how instinctual behaviors and cognitive limitations inhibit  “rational” actions (i.e., in a manner maximizing extrinsic rewards).  I believe we are at the next stage where we are not just analyzing “irrational behaviors” but designing systems that incorporate human instincts to shape behaviors that result in desired outcomes.  The technology developments are making these appeals to human instincts more feasible.

The question:  how is your organization positioned to deal with “design for instincts”?

 

Designing Loyalty Programs

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American wallets are stacked with a number of loyalty program cards.  Be it a bookstore, or a coffee shop or a shoe store or a medical store, companies want to track your purchases.  Until recently, I have never stopped to think about how different the programs are. The thought-process started from a discussion about the Barnes and Noble’s loyalty program I had with an executive.

B&N loyalty program is a pay to play scheme, i.e., you pay an annual fee of some $25 and get 10% discount on purchases (I don’t remember the exact numbers).  So, essentially, if you spent more than $250 per year, you are better off.  B&N has designed it such that even if you did not have your card handy, the cashier will be able to give you discounts because he/she only requires your phone number.  They have made it easy because it relieves me from carrying around the loyalty card.  The cashiers do not bother to check any form of id either — I think it is their company policy.   The question that struck me was: would the patrons be freely sharing the card, or would they care about the company and not share it?  I own a B&N card but I have never shared it with anyone (except for my wife, of course).  But I was reasonably sure that these cards are shared by others.  Unsurprisingly, I found a number of people who shared their cards.  They often referred to the card as a “discount” card rather than a “loyalty” card. The adjective that they used possibly describes how they instinctually related to the card.

B&N did not change the existing processes but started gamifying the loyalty program and rewarded people based on how extensively they used the loyalty program cards.  I would expect the perverse incentives to more likely kick in that could lead to worse outcomes for the company.   I don’t have any measure of how successful this gamification venture was but I had an opportunity to chat with a local B&N store cashier soon after their roll out.  Apparently, on the weekend before my visit, a customer generously shared the loyalty card details — i.e., her phone number — so that everyone in the line behind her could get discounts also. Perhaps, the customer did so to win in the gamified engagement.

The question from a “design for instinct” standpoint is: how would you change B&N’s loyalty program so that it still offers the benefit of its customers not carrying the card or id but at the same time limit free-riding?

A colleague of mine, Mohit Tawarmalani, and I discussed this issue and we came up with the following answer.  Anytime someone uses the phone number in order to take advantage of the reward, why not just charge the customer full amount (without discount) but keep track of the discount amount separately?  The only way someone can redeem the discounts is by showing some form of ID or by showing the loyalty program card.  This simple change will naturally limit the use of shared cards.

 

“Design for Instincts” Talk @ CTS’ Innovations Week

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On March 22nd, 2013, I was at Cognizant Technology Solutions (CTS) to give a talk related to  “design for instincts” for the insurance vertical’s innovations week.  I thank my friend Venky Vijayaraghavan and his colleague Karthik Sivasubramanian for inviting me.  There were two other speakers who did a fabulous job and in some ways further instigated my thinking on “design for instincts.”

EswaranNatarajan, the head of Operations & Technology at ICICI Lombard,  gave a very engaging talk and he described some of the problems that his company faced and how they used their engineering prowess to overcome the problem.  He gave examples of how when they used the mobile phones, they discovered that they couldn’t take more than 20 pictures and what they did to overcome the problem.  The process described seemed to indicate that ICICI does the root cause analysis really really well and then uses the analysis to find a solution.

Sukumar Rajagopal, CIO of CTS, also gave a very interesting talk.  His presentation seemed to synthesize management philosophies for innovation.  He specifically mentioned how in 1983, BMW and Benz were dominating the market with a good fuel performance, little noise within the car, car being light, etc.  He contrasted with how Toyota innovated to overcome the problems, which initially seemed implausible.

I felt that both these speakers spoke about engineering innovations.  I am an engineer by heart (hold bachelors and masters degrees) and many in the audience were too.  However, their innovations need not be just restricted to engineering ones.  With the power of information technology growing, it is the right time for us to push the envelope in non-engineering ways particularly those related to human behavior.

In engineering innovations, the main process is to identify the root cause of the problem and create solutions to overcome it.  However, in non-engineering innovations involving shaping human behavior, it is important to understand how we behave instinctively and develop designs based on them, a.ka. “design for instincts.”  On this regard, I wish to highlight a student project initiative that CTS is pursuing with ISB via my course.   One objective is for the students to carry forward the “design for instincts” thought-process that they have learned in my class and propose a learning platform for CTS.  I was happy that the EswaranNatarajan recognized our effort positively during his presentation.

 

Update on April 4, 2013: corrected Eswaran-natarajan as the ICICI person giving the presentation.  

Problems with “Gamification”

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I mentioned in one of the previous posts that my thinking has been reshaped because of preparing for the gamification course at Purdue.  However, after thinking about the gamification courses I taught/teach, I am convinced that the word “gamification” does not truly portray what companies are trying to do.

I perceive that many companies are imagining gamification only as a means to incorporating games within their design.  I have seen many start-ups that are trying hard to impose games into various contexts, which don’t even make sense.  I don’t think that these start-ups are going to be successful in the long term.  Similarly, I have engaged in many conversations (some of them with my students also) that reflect serious attempts to formulate a game in irrelevant scenarios.  I was struggling to identify where the issue is.  The fundamental problem lies in what we call as gamification.  Our nomenclature restricts our thinking in many ways.

First, let me take my professorial role to explain what the concept of gamification fundamentally relates to.   It is a very simple idea.  Think about two different worlds.  In one world, some target set of people are not engaged in an intended manner (not purchasing product, or not providing reviews, etc.).  Suppose we can conceive of the second world that is interconnected to the first one — i.e., the actions in the second world can be mapped into actions in the first.  The main concept is how do you design the second world so that the target audience’s behavior in the first world is as intended?

Games are one form of designing the second world and generating the mapping.  It should be clear that it is just a form.  What we actually are doing is that we are “designing for human instincts.”  This is the main concept behind several of the recent transformations I see in this world.  Because games have been around for ages, we find its appeal instinctively.  However, instead of referring to the phenomenon as “design of instincts,” we are restricting our ability to come up with new transformations when we call the concept gamification.

Gamification course @ ISB

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The gamification course I teach at ISB is the second time I will be teaching the same course.  To the best of my knowledge, this is only the third time that this course has been offered anywhere in the world (first was at Wharton, second was at Purdue).  The co-instructor on the course is Ram Gopal from UConn.  It is going to be a fun experience.

The gamification course at Purdue attributes its inception to ISB.  Originally, in early 2012, I was asked to teach an elective at ISB.  I did quite a bit of investigation.  When I realized that I could teach the same course and gain some experience at Purdue, I decided to teach it in fall 2012.  When I taught at Purdue, the ideas that I learned while preparing for the course has completely changed my thinking.  This thought-process is very fascinating.

I want to next highlight how my gamification course is different from other gamification courses (including Kevin Werbach’s course).  Gamification means engagement.  That said, one of the key distinguishing feature of my course, which is different from any other gamification course is that I approach engagement not just from game perspective but it is broader.  I am looking forward to an interesting course.