Why less information can make for better decisions

Our best decisions are made after a thorough analysis of all relevant factors, right?  Nope.

I was such a big fan of Malcolm Gladwell’s Blink, that I was excited to read a book by the scientist whose research was a major source for Gladwell.  Gut Feelings, the Intelligence of the Unconscious, by Gerd Gigerenzer, explains how intuition works and how simple “rules of thumb” guide our most critical decisions. 

There are plenty of ideas here for communicators.  Good decision-making isn’t about gathering as much information as possible; it’s about discarding what you don’t need.  So, for example, if we want our employees to make better decisions about their health care benefits, there are some ways we can help:

• Whenever possible, give employees a default option that represents the best solution for most people.  Many companies are taking this approach with 401K’s and dramatically increasing saving rates.
• Provide people with one good reason to do something—not many.  Research shows that Intuition based on one good reason (a Take the Best approach) is efficient and effective .Too many alternatives actually result in poorer decisions.
•  Find out what are the most critical factors in making a decision and create a “Fast and Frugal Tree” that helps to train intuition by putting the most critical factor on top.   For example, if a hospital patient is suspected of having a heart attack, the most important question is if there’s a certain anomaly in the electrocardiogram.  If the answer is yes, the patient is sent to a coronary care unit immediately.  If the answer is no, the second cue is if the patient is having chest pains.  A yes again sends the patient for immediate care.  Finally a third question is asked and if the answer is no, the patient goes to a regular bed.  This system proved far more accurate in predicting heart attacks than a much more complicated set of calculations.  This type of free could be used for many types of communications decisions, such as deciding whether to send out a press release or an e-mail to all employees.

Another key point is transparency creates trust   The Bank of England turned itself into one of the country’s most trusted institutions after it starting showing the men behind the curtain.  It stopped presenting its estimate of inflation as an undisputed fact; instead, posting how its board arrived at that estimate on the Internet.  At first, people were surprised, saying, what do you mean you can’t predict inflation with certainty?  But most of the time, certainty is an illusion.  The U.S. Congress is one of the least trusted of all institutions, no doubt in part due to perceptions of back-room deals.  It seems that no one really knows what’s in a bill until after it passes.  In contrast, President Obama’s White House seems to be making progress in providing more transparency.

Gigerenzer also talks about the power of rumors.  We know negative rumors like mass layoffs can demoralize or even paralyze employees, but rumors can also be positive.  He has a great example of how rumor tore down the Berlin Wall.  At a press conference, an overworked East German government spokesman mentioned new guidelines for travel that were just marginally more lax than the old ones.  But when the flack was asked when the new regulations would be effective, he said, “Right now, immediately.”  An Italian journalist reported this as “the Wall fell.”  An American reporter who didn’t understand German also did the same and news outlets starting reporting that East Germany had opened  its border.  It was more like wishful thinking, but East Germans went to the wall and demanded the opening of the border.  Guards opened the barriers and soon Germans were dancing on top of the wall.

The bottom line is gut feelings aren’t something to be dismissed, even in a corporate climate that makes decisions deliberately, after much analysis.  These feelings take advantage of evolved capacities of our brain.  They are based on rules of thumb that enable us to act fast and with great accuracy..  It’s the intelligence of the unconscious, which gives us the ability to know the best answer without even realizing which rule of thumb we’re relying on.  Yes, it can be exploited and lead us astray, but in a world with way too much information, it’s nice to show our brains have developed a shortcut to make sound decisions.

How a lack of honesty cost me $28 to open a Chase bank account

This week, I decided to open a Chase bank account because of a great offer on frequent flyer miles.  When I walked into my local branch in northern New Jersey, it took about 15 minutes before I could meet with “Bob,” the only person who opens accounts.   While I was waiting, I asked  the Customer Service woman how long it takes to open an account.  She said “about 15 minutes.”  I had parked at a meter and decided I wouldn’t go over if Bob saw me as promised. 

When Bob finally invited me into his cubicle, I told him  I just wanted to quickly open just a checking account–that’s it.  But he wanted my life story: Who did I invest my money with?  Did I like mutual funds?  What kind of rate did I have on my mortgage?  What kind of balances did I carry on credit cards?  The funny thing was, he could see most of this on his computer.  I already have a mortgage and three credit cards with Chase.  I told him I didn’t need anything besides a checking account.  A manager, “Thurston,” asked if he could sit in.  So when Bob asked me if I’d like to get the special overdraft protection that would charge me only $10 for an overdraft instead of $35, I turned to Thurston and asked, “Why don’t you just reduce your exorbitant overdraft fees?”  We all chuckled.

I asked Bob how much longer it would be because I was worried about the meter.  He said, “five minutes.”  But the grilling went on and on.  Bob kept saying he was looking for ways to save me money and told me about the fabulous .35 interest rate on a savings account. I told him I was getting 1.25 at ING and said  to Thurston: “This is absolute torture for me.  Why can’t I open an account online like I did  with ING?”    Thurston said Chase was all about creating personal relationships and determining my needs.  Bob promised to be my BBF (best banker forever). 

Finally, nearly an hour after I walked into the bank, I had my checking account .  I ran to the car and saw a ticket on my windshield.  28 bucks.

When I got home, I told my husband  my new debit card had a $65 annual fee.  He said I could have gotten one with just a $25 fee.  So I called Bob immediately and left a message on his voicemail asking him to change my card.  No response.  I called again hours later.  No response.  So that night I called Chase’s 800 number and made the switch easily.  

I understand Chase has a different business model than ING and up-selling is a huge part of making money.  But why can’t Chase be more honest in its relationships with its customers?  The House has passed a banking reform bill and I hope we’ll see a lot more transparency.  It’s just hard for me to understand why Chase would think the experience it put me through would create a loyal customer.  Here’s how I wish Chase had treated me differently, making straightforward, two-way communications a priority.

• The mileage offer should suggest scheduling an appointment to open an account.  Ideally, I should be able to click on a link to my local bank and choose an appointment time.  I wouldn’t have to wait and I would know exactly how long I would be there.
• When I asked Customer Service how long it took to open an account, I should have been given an honest answer.  I was with Bob for more than 30 minutes and I kept trying to speed up the process, so I’m guessing he usually takes 45 minutes.  If Customer Service had been more honest, I could have put more money in the meter or scheduled an appointment to come back.  Was the Customer Service woman told to say 15 minutes so people didn’t leave or did she just have no clue about the length of Bob’s interrogation?  A bank should have fairly standardized procedures.
• I  told Bob my key considerations in a bank were low fees and high rates.  So why didn’t he tell me about the debit card with the lower fee?  And why did he try to get me to open a savings account when I told him right away I was with ING?  When I told him ING’s interest rate, he seemed incredulous.  The irony was that he was supposed to be offering me a personalized banking experience, but he never veered from his script.  How could Thurston tell me opening an account in a branch is all about providing personalized service while watching Bob put me through a canned set of questions?   And if Bob promised to be my personal banker, why didn’t he return my calls?
• And of course, why did I need to give up an hour of my life instead of opening an account online?  Why can’t Chase offer this as an option?  If Chase marketed to me in a customized way online, I’d be a lot more likely to consider additional products.   I’m a Baby Boomer and I can’t even imagine the frustration of Gen Y’ers who have to go through this.

Before I opened this account, I thought I might close my primary checking account and switch to Chase.  But this experience was so unpleasant, that isn’t very likely.  Hey, I  know when someone says he’s trying to save me money, he’s actually figuring out to make money from me.  But if I ask a direct question about how long it takes to open an account,  the  least you can do is man up and tell me the  truth so I don’t have to pay a parking fine.  And if I have to sit there, can’t you listen to what I’m saying and adjust your spiel?  When I go into a branch and three different people mislead me, why wouldn’t I prefer to bank online? 

JP Morgan Chase just announced it earned nearly $12 billion last year, more than doubling its 2008 profits.  But its consumer businesses aren’t doing too well.  So Chase, maybe you could shift some of your focus to improving the banking experience for the average person, starting with candid communications.

Building buzz in real time

Figuring out an effective social media strategy for your organization is probably your toughest and top priority these days. So I’m writing a long entry to share many of the stories I heard at the Business Development Institute’s Social Integration program on January 13, 2010 in New York City. Key, common themes are:

• Technology isn’t social—people are.
• The center of a company’s brand has shifted from ads to Web, where you can truly engage your customer. It’s all about building long-term connections.
• You have to really listen to your customers—their ideas can help you shape your business. Your customer can produce marketing content and drive your strategy. It’s also critical to respond to complaints at the speed of Twitter.
• Authenticity is absolutely vital. Your audience wants a candid look at what your company is doing, not promotional B.S. And transparency isn’t an option when the world is ready to jump on any messages that are misleading or unsupported.
• Go where people already are—join established groups instead of starting your own.
• You’re going to make mistakes—learn from them and realize it’s tough to create buzz without risk.

Some highlights from the speakers:

Twitter has given the Michelin Man a voice for the first time in his hundred-year history. Lynn Mann, the Director of External Communications for Michelin, says if you meet that big guy made out of tires at an event like an auto show, he won’t talk to you (just like Mickey Mouse at Disneyworld.) But if you tweet him, he’ll tell you about tires and the best restaurants in town. (I never realized the same company produced tires and those fancy restaurant guides.)

Mann says after putting the fat man on Twitter, Facebook, and YouTube to drive its “The Right Tire Changes Everything” campaign, searches for dealer locations increased 38%.
Favorite quote: “If you are not authentic, the people you most wish to impress will run screaming in the opposite direction.” (This was the punch line to a great story about her niece running away from Michelin Man at a party because he wasn’t the same as the character she saw on TV.)

Harvard Business School (HBS) has 55,000 followers on Twitter, but CMO/COO Brian Kenny is wondering about the future of tweeting now that even Ashton Kutcher is considering becoming a “Twitter quitter.” Kenny says HBS’ social media strategy has been about “going where the people already are,” instead of creating new communities. HBS students are active on Facebook when they start school, but by the time they leave they’re more interested in networking on LinkedIn. Student ambassadors are using Twitter to recruit students globally.

I loved Kenny’s point about understanding that by using social media, you’re relinquishing control of the brand, which sometimes leads to “losing control of the brand.” He showed us some photos of drunken student parties, but Kenny says you’ve got to accept that. The more potential for buzz, the more risk.

Favorite quote: “You need to be comfortable being uncomfortable.”

The National Hockey League’s Michael DiLorenzo also talked about parties, but his were a big success. The NHL crossed over from the virtual world to the real world when it launched Stanley Cup “Tweetups.” After the NHL put the word out on Twitter that is was holding a playoff viewing party in New York, other fans wanted in, resulting in parties in 23 cities around the world (Irish hockey fans?!). This helped the league’s strategy of getting fans to invest in hockey even when their local team isn’t playing.

The NHL also asked the media to check out the Tweetups, and Adweek wrote a very positive piece: “Brands Take Social Media Into Real Life.” DiLorenzo says this is a great example of how listening to your customers pays off. He says, “Most of what is going on now is fan-fueled and they just come to us for support.” Support is NHL merchandise and free food from sponsors.

Favorite quote: “The important thing is listening to our fans and showing we care about them. We tried and failed at a number of things and now we’re getting better.” (If you run a contest on Twitter, make sure the rules can actually be read.)

Keynote speaker Michael Mendenhall, Chief Marketing Officer at HP, says marketing in the cloud is the next stage in the evolution of the Internet. Getting information from the cloud is personal, efficient, and social. As time goes on, the cloud will become more intuitive and serve up information customized to you.

Mendenhall showed us the really cool “Lucas” video, created by a customer as part of HP’s “You on You” project, which supports its paid media campaign of “The computer is personal again.” Initiatives like this are redefining the concept of paid and earned media.

Mendenhall also made the case for MagCloud, HP’s print-on-demand tool for magazines—or as he calls it, “a new Renaissance for print.”  The service eliminates waste in magazine publishing and allows for searchable and personalized content. I’m wondering if a corporation could use it for publications. Over the past few years at Deloitte, we struggled over whether to make the annual review online only.

Favorite quote on engaging customers: “Customers gain choice and control; we gather ideas to improve our products. The consumer is now the producer.”

“Editor in Chief” is an interesting title for a guy who works at a PR firm, but David Patton of Waggener Edstrom Worldwide is a former Wall Street Journal editor who says his current job isn’t all that different. He advised the audience to “think like a reporter” when it comes to marketing through social media.

Patton says PR and marketing are merging, so you can take advantage of that by creating a digital newsroom that serves as a central location for social media content. Content flows across your organization into the “destination station,” flows out to a wide audience, and flows back in through social media. Instead of focusing on telling your story just to journalists, you can tell your story directly to a number of audiences.

For Patton, content trumps style. “More authentic, more credible content is what is more engaging for consumers,” he says. For example, interview employees getting their hands dirty while in the middle of creating a new product instead of interviewing them afterwards in a polished piece. Patton is absolutely right, but after four years at Deloitte I know it’s tough telling senior leaders you’d rather talk to the folks actually doing the work.

Patton says: just like a reporter, gather a lot more information than what you think you might need, and decide later what you think is strategic. He says, “People understand you have an agenda, but if you make your content good, authentic, and compelling, they’ll read it.”

Favorite quote: “Good content begets more content.”

Joshua Karp of Pepsico says its vision for social media is about “moving from impressions to connections.” He spoke about the success of The Juice campaign, which markets Tropicana’s Trop 50 by promoting “healthy eating on the go.” Pepsico hooked up with BlogHer, a blogging community for women—a great example of taking your social media where people already are.

I applaud Karp for giving us a look at the German Pepsi Max ad showing a calorie committing suicide. I found it hilarious, but after complaints on Twitter the company pulled the ad and tweeted apologies—great example of using Twitter to listen and respond in real time.

Favorite quote: “Mass communications is dead—it’s about building connections with consumers.”

A problem with his beloved Cliff bars helped Richard Pesce of Sprint Nextel understand how social media is making consumers more powerful. He loves Cliff bars, but after a bad experience he couldn’t get anywhere through traditional customer service channels. So he wrote about the problem on Twitter and Facebook, and in hours the company apologized and resolved his issues. He’s back to eating a bar a day and telling the world how awesome Cliff bars are.

Pesce says Sprint Nextel is using social media to change its relationship with customers from transactional to passionate; occasional to constant; impersonal to personal; and short-term to loyal.

When he first told company lawyers he wanted to engage with customers online who complained, the lawyers said, “You’re not going to talk to them, are you?” But Pesce responded with: “If a customer came into a store with a complaint or a positive comment, would we ignore them? No. So why would we do that online where there’s more power to spread their thoughts?” The light bulb went on for legal and the communications team is now working with customer care to join online conversations.

Favorite quote: “Technology is great, but it’s about focusing on relationships. We’re aiming for transparent, two-way conversations.”

Everyone I spoke to afterwards felt the event was very valuable. I loved the half-day format of short case studies. You can read tweets from dozens of participants by using the “#bdi” hashtag.

Unscripted: Lessons from Larry King

I’ve never been a huge Larry King fan, but his audio book, My Remarkable Journey, made a long drive from Pittsburgh almost painless.  He’s an incredible storyteller with a few lessons for those of us in corporate communications.

First of all, King prizes honesty.  The first time he got in front of a microphone at a radio station, he told his audience that it was his first time and he was scared.  His “be yourself” advice may sound trite, but when was the last time a corporate leader admitted feeling confused or disappointed or expressed any type of honest human emotion?

Unlike most celebrity bios, King doesn’t just trudge  through the highlights of his career.  He tells stories about growing up and making mistakes.  I laughed aloud for ten minutes on the Pennsylvania turnpike as he explained how he and some high school friends drove from Brooklyn to Connecticut in a blizzard because someone said there was a Carvel store that sold three scoops for 15 cents.   It’s a long story that builds through careful construction,  using the recurring punchline of “That’s impossible”.  The characters in this story are  indelible.

And finally, this audio book is the best example I’ve ever heard of a person reading aloud who sounds completely unscripted.  All too often, corporate leaders want to read a teleprompter for a video or speech, but most people can’t do this without sounding stilted.  King is obviously reading a script since he wrote a book, but it feels like he’s sitting next to you telling you a story.  Obviously, he’s a master broadcaster with half a century of experience, but anyone can improve their delivery by trying some of his techniques:

• Vary your delivery– tone, pitch, pace, and volume.  In a normal conversation, your pitch is all over the place, your volume goes up and down, and at times you speak more quickly or slowly.  But when people read a prompter, they often fall into a monotone that they think makes them sound professional, but turns them into a robot. 
• Think about what you’re saying.  All too often, people just read words.  You hear this with news anchors all the time who use the same tone when transitioning from a deadly fire to a story about puppies.  As King speaks, you feel as though he’s reliving his adventures, and you get to come along too.  A few times he got so carried away he couldn’t stop laughing.
• Don’t be perfect.  King’s delivery includes a few mistakes, which is what happens when someone is talking rather than reading.

The audio book is unabridged, so it’s ideal  if you’re planning a long drive for the holidays or want to download something for your Ipod.

Bobbing and weaving

“The opposite of success isn’t failure, it’s mediocrity.  You need to bob and weave your way to success, which means that you’re going to fail sometimes.  You just don’t want to be mediocre.” 

That advice from Marguerite Copel, VP of Corporate Communication for the Dean Foods Company, wound up the Strategic Communications Management Summit in Chicago.  Everyone I talked to at the conference has way too much on their plate—helping their bosses do their jobs, along with keeping their own.

Marguerite works for the largest dairy producer in the country, which has been growing quickly by scooping up companies.  She admits she’s still focused on putting out fires, but thinks corporate communicators should try to achieve this kind of balance in their job:

• 20% daily operations
• 20% firefighting
• 60% value-added work

Sounds pretty tough, but a couple of her tips might help:

• Understand the business of your business – you don’t have to know all the answers but you should know the questions.  That way you’re seen as more of an advisor and counselor and together with your business leaders, you can arrive at the answer.
• Ask why five times – when you get the request for a communications initiative, just keep asking why.  Start with, “What is the business problem you are trying to solve?”  If you can pursue  that need relentlessly, you can uncover unstated client needs and deploy resources to meet those needs

Becoming a trusted advisor is also the advice from Claire Leheny, North American Director for
Melcrum.  She presented results of Melcrum’s 2009 survey of internal communicatiors.   Claire says with trust in corporate leaders at an all-time low, they need our help more than ever.  Employees are searching for reasons to be engaged, and now is the time for communicators to help leaders understand their employees view change very differently from them.  For example, leaders like to communication the what of change—the strategy and process, while employees want to know the why and be involved in determining the how.

One recommendation from the survey:

• Employees want their leaders to listen first, so create a guided facilitation/conversation process.  For example, ask each group at a table to answer one emotive, meaningful question like:  “When was the last time you were proud of working for your company?”

Imagine how much leadership could learn by asking this question.  Other speakers such as Linda Dulye (see “Goodbye Silence” post) also emphasize the importance of listening, especially in this time of change and uncertainty.  Instead of spending all our time helping leaders communicate their messages, let’s convince them to do a little listening.

Goodbye silence

Forget about creating a communications plan to reach your internal “audience”—instead, we should build a dialogue in which employees are active participants.  A lot of us claim to be doing that, but face it, at most companies, our focus is driving the message from the top.

That was the message from Linda Dulye, founder of Dulye & Co., at the 2009 Strategic Communications Management Summit in Chicago.  I loved her advice on how to build feedback into your workplace.  It seems like today many of us in internal comms are obsessed with how best to use social networking, but we’re neglecting the old-school basics when it comes to creating a conversation between leaders and employees.

Three great ideas from Linda:

• Form an Employee Action Team to help shape communications.  For instance, before you have a town hall meeting, your employee team can survey colleagues about questions they’d like to ask.  Then, when your leaders open the floor for questions, you won’t get deadly silence or canned questions from HR.
• Redesign town hall meetings (virtual or face-to-face) so that one-third to one-half of the meeting is about driving feedback.  Don’t allow leaders to drone on with massive PowerPoint presentations.
•  Drive out “spectators” at the workplace by making all managers and even employees accountable for communicating. Create formal procedures for manager communications and measure the result.  For instance, managers can be held responsible for holding weekly meetings while employees on their team take turns taking notes and doing a quality check of how the meeting went.

Linda presented research that shows employees value direct communications from managers more than any other type of communication.  Managers can help employees determine how a message from leadership supports company goals and is important to their department.  “It’s a translation no email or intranet can do,” she says.

Dulye & Co. offers FREE webcasts to help your organization improve feedback.  There’s one coming up on Oct. 6 on “Help Managers Free Your Organization’s Good Ideas.”

Later at the summit, Tim McCleary of The Involvement Practice also talked about the importance of actively involving employees. McCleary advises communicators  to “Stop telling and start involving” by:

1. Making sure employees understand the what and why of what you’d like them to do, and then getting them to answer the how.
2. Making it personal.
3. Creating experiences (like using your senses in a different way—he had us guess what was in a coffee cup by smelling it.)
4. Being a storyteller.

McCleary says, “Telling has its place, but if you bring involvement in, things will change in a very positive way.”

So bottom line, we as communicators need to start listening more and advise our bosses to do the same.  Build some listening time into all your projects.