Books, Business, Marketing

Book Review: (Business) The Catalyst

LITERARY REVIEW

Berger

The Catalyst concerns the art of persuasion

JONAH BERGER is a marketing professor at the University of Pennsylvania. His book is about changing people’s minds and he has advised large companies such as Apple and Nike. His approach is one of deftness and subtlety, one in which he doesn’t shout at anyone or by stamping on their toes.

The Catalyst is jam-packed with good ideas with very believable stories. It is perhaps written for those businessmen and women who often attend important business meetings.

When we try to change people’s minds – and we’re talking about everything here: politics, advertising, social attitudes, even the peanut butter you buy – we tend to think in terms of pushing and coercing. But as Berger demonstrates, people just hate being told what to do. “Tell them to vote one way and they’ll probably vote another way just to spite you.”

Berger recommends what he refers to as “reducing roadblocks”. Identify the obstacles and eliminate them.

The first of these he calls “reactance”. This is the anti-persuasion system that kicks in when we think someone is trying to talk us into something. “Encouraging people to persuade themselves”, says Berger. He tells an excellent story about a public health official in Florida who encouraged teenagers to give up smoking by getting the teens themselves to ask the awkward questions.

In one TV ad, they had a couple of teens ring up a magazine executive to ask him why he accepted tobacco advertising. The executive said he supported anti-tobacco ads, but when the teens asked him if he’d run the ads as a public service, he said no: “We’re in this business to make money.” The teens said, “Is this about people or about money?” The executive said, “publishing is about money,” and curtly hung up.

The TV ad worked. Within months, 30,000 teenagers in the state had stopped smoking. It was the most effective prevention programme ever, and it changed teen anti-smoking campaigns the world over.

Berger’s second obstacle is our attachment to the status quo. We like what we already have, and to make any change at all, the improvement must be worth all the fuss of doing it. Say your phone needs updating but you’re fond of your old one, even though it’s falling apart. The salesman’s job here is to highlight that simply not doing anything has costs you might not have spotted, and that change isn’t as hard as it looks.

Berger observes that if you have a product or service that is terrible, you’ll replace it instantly. But if it’s merely mediocre, you might stick with it because changing it is just too much bother.

Berger tells a rather fascinating and brilliant story about Dominic Cummings when he was heading up the Vote Leave (Brexit) campaign. He needed a campaign slogan, and initially he came up with “Take Control”. Which was all right, but he knew that referenda usually fail because people are happy with the status quo. He had to make it seem that leaving was the status quo, not remaining. Which he did by inserting the word “back”: “Take Back Control”. Berger says: “It made it seem like something had been lost, and that leaving the EU was a way to regain that.”

Next up is “Distance”, which I think should be interpreted as how far some people might be from the viewpoint you’d like them to have.

Say that the person you’re speaking to is a Trump supporter and climate change denier, and you want to convince him that transgender rights are a good idea. That’s distance, all right. Berger recommends taking small steps rather than large ones. Ask them to move a little way towards your goal, then ask them to move a bit further.

Berger’s book is full of goodness, but sometimes he’s so opaque you begin to wonder whether English is actually his first language. But that may just be because it’s written for people who use words like “reactance” in everyday conversation.

 – The Catalyst by Jonah Berger is published by Simon & Schuster, 288pp

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Britain, Business, Economic, Government, Politics, Society

Budget 2018: ‘A shot in the arm’ for British businesses

BUDGET

BUSINESS leaders have welcomed a shot in the arm for the British economy following the Chancellor’s pro-enterprise Budget.

In the final Budget before Brexit, Philip Hammond announced a raft of fresh tax reliefs and spending pledges to help solve the UK’s ongoing productivity problem.

The plan included extra funding for research and development “to secure the UK’s position as a world leader in new and emerging technologies such as artificial intelligence, nuclear fusion and quantum computing”.

Seeking to exploit concerns about how the economy would operate under a Labour government, the Chancellor said: “We will always back enterprise. As we finalise our departure from the EU, we must unleash the investment that will drive our future prosperity.

“So I can announce a package of measures to stimulate business investment and send a message loud and clear to the rest of the world: Britain is open for business.”

Among the policies Mr Hammond announced were:

. An increase in the annual investment allowance (AIA) from £200,000 to £1m for two years, giving extra relief to firms that invest in machinery;

. Tax breaks to encourage businesses to invest more in factories, offices and other places of work;

. £1.6bn for R&D to promote science and tech innovation;

. £50m for artificial intelligence fellowships;

. A two-year freeze on the VAT threshold.

The measures were welcomed by business.

The director general of the British Chambers of Commerce, Adam Marshall, said: “Philip Hammond has sent important and positive signals to businesses across the UK, many of whom have been wavering on investment and hiring.”

On the increase in the AIA, he added: “This will be a huge shot in the arm for businesses across the country, giving many thousands of firms renewed confidence to invest and grow.”

Among the science-friendly measures, the Government will plough £50m in new Turing AI Fellowships to lure artificial intelligence researchers to the UK, £235m to support the development of quantum technologies and increased funding to explore distributed ledger technologies such as blockchain.

Under the Industrial Strategy, total R&D investment is due to hit 2.4pc of GDP by 2027.

One of Mr Hammond’s headline business policies was a change to the Annual Investment Allowance. While business groups were mostly supportive of the move – with the allowance rising from £200,000 to £1m for two years starting in January 2019 – analysts added that firms might choose to delay investment plans to coincide with when the higher rate of relief will come into force.

A real estate tax partner at PwC said: “Longer term, this should encourage much more investment, but short-term there may be a lag while businesses wait for January.”

Entrepreneurs were directly targeted through an extension to the British Business Bank’s start-up loans programme, which will run until 2021, and amendments to a policy called Entrepreneurs’ Relief – which had been in the line to be scrapped.

They pay a lower rate of tax at 10pc, compared with the standard rate of 20pc on capital gains when they sell off some or all of their business assets.

Mr Hammond has now doubled the minimum qualifying period from 12 months to two years and shareholders will now have to hold a 5pc economic stake in the company to receive the relief.

The Chancellor also announced smaller-scale measures, such as £20m of skill-training pilot schemes.

In a Budget that was welcomed for supporting smaller and more risky start-up businesses, the Chancellor said he would help UK pension funds invest in such firms.

The Treasury will consult next year on the pension charges cap, which restricts the amount some pension providers can charge in fees.

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Britain, Business, Economic, Government, Society, Technology

The rise of automated robots is creating fear in the workplace. But why?

ECONOMIC & TECHNOLOGICAL ADVANCES

WE shouldn’t be surprised if trade union’s such as the TUC is waxing lyrical about how robots and new technology will liberate us all to work less for the same money.

After all, no less an authority than Karl Marx claimed automation would help free the miserable proletariat from their mundane drudgery.

John Maynard Keynes predicted in his 1930 Essay, Economic Possibilities For Our Grandchildren, that technology would allow people to work no more than 15 hours a week. “Three days a week is quite enough,” he opined. Keynes didn’t have any grandchildren, but if he had, it’s highly unlikely they would be basking in hours of leisure time.

Employment in the UK is at its highest since 1974, when ABBA won the Eurovision song contest and we actually did have a three-day week (but for all the wrong reasons).

Not everyone sees the advance of robots and technology in the workplace, in warehouses, manufacturing plants or even in new possible areas such as care homes, as a good thing. Fears that machines will make humans redundant or enslave us are as old as technology itself. Crackpot ideas such as Amazon’s robot-driven cage for its employees – now mercifully ditched – is an example that doesn’t exactly help.

In a fascinating speech on the future of work, Bank of England governor Mark Carney said that, in the past, machines substituted for “hands” or manual labour. Now artificial intelligence means they might replace “heads” or brain work, leaving “hearts” to people – or, in other words, work that involves emotion, imagination, innovation, caring and creativity, which could translate into more fulfilling work that adds value to the economy.

 

HISTORY tells us automation does not take away human work, but simply shifts people from one type of work to another.

One of the biggest technological revolutions receives virtually no attention from economists because it has mainly affected women. But, by making housework so much easier, the spread of domestic appliances such as vacuum cleaners and washing machines has arguably changed the workplace and society as much as the smartphone.

The idea that robots will take employment away from humans rests on the “lump of labour” fallacy that there are a fixed number of jobs in an economy, so if a robot takes one, a human being will be consigned to the dole queue. In reality, however, it is not like that. Economies are dynamic, so if robots add to productivity and growth then more, not fewer, jobs will be created for humans.

This doesn’t mean the introduction of technology will be seamless. Overall, technology may be beneficial, but individuals can and do lose out if their jobs are taken over by machines and they are not able to find alternative employment quickly.

What Keynes ignored in his analysis is that many of us, probably including himself, have workaholic tendencies and absolutely don’t want to be idle.

For anyone who wonders why multimillionaire chief executives don’t just put their feet up and enjoy their loot, think of it this way: the higher paid someone is, and the more status and admiration they glean from their work, the less incentive they have in taking more leisure time.

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