When People Reckon It’s OK to Cheat, by Dan Ariely

Dan Ariely, professor, author and behavioural economist, is someone I have found in recent months. His research is fresh and his insights interesting. He is the author of the best selling “Predictably Irrational” (buy now on Amazon.co.uk or Kalahari.net).

He is doing quite a lot of work at the moment on why people cheat, and what you can do to make sure they don’t.

I picked up a nice piece on him in the BusinessWeek – very interesting stuff:

Perhaps because of the cheating uncovered in the aftermath of the financial crisis—the lies told by everyone from mortgage lenders to Bernie Madoff—behavioral economist Dan Ariely has been getting a lot of calls about the nature of dishonesty. Ariely, a Duke University professor and author of the best-selling book Predictably Irrational, has spent years studying the topic.

Ariely says he’s not surprised that derivatives—whose values are based on other financial assets—have gotten a bad rap. He has found that people are more likely to cheat if they are a step removed from the cash payoff. In one experiment, he paid subjects (whom he allowed to report their own scores) for correctly solving math problems—some in cash, some in tokens to be redeemed across the room. The second group exaggerated their scores twice as much as the first. Similarly, in studies of real-life expense reports, he found managers pad expenses more when their assistants compile the report. Such detachment, Ariely says, may be what’s involved “when you backdate a stock option.”

His most recent experiment—on deception’s slippery slope—was inspired by some Prada swag he got after speaking at a conference last year. Carrying a genuine luxury bag made the fashion-challenged economist “feel different,” he says, leading him to wonder about the psychological effects of sporting a counterfeit.

In an experiment involving 500 people, he found that subjects who knowingly wore fake Chloé sunglasses later cheated more than twice as often on an unrelated task than those assigned to wear the authentic designer goods. “If you take that first step, your self-image changes,” he says. “It becomes easier to do the next dishonest thing.”

Ariely’s new obsession is how to prevent cheating. Consider the math task with the tokens. In one variation, testing participants first on their recall of the Ten Commandments eliminated cheating on the math scores. Then there’s the study Ariely did with an auto insurer: Car owners who signed their names at the top of the insurance application, he found, were more honest about their driving habits, even though higher annual mileage meant higher premiums.

“We all like to think of cheaters as evil people,” Ariely says. But deterrence can be as simple as reminding people of their better selves. His advice to the IRS for next tax season: Move the signature line to the top of the form.

Source: BusinessWeek

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Cell C may need more than (Trevor) Noah’s Ark to get them out of this one?

I’m sure it started out as a great idea at CellC Marketing HQ? The mobile phone industry has a mostly terrible name when it comes to customer service. Lines drop all the time, prices cripple you, data crawls regularly and call centers frustrate whatever life you still have, right out of you.

So it was a no-brainer to come up with a bold PR/Marketing angle of honesty, integrity and openness aimed at the bruised and beaten South African consumer. You know the story if you’ve been in South Africa these last 2 weeks. But in case you need an overview, care of The Daily Maverick and Mandy De Waal:

On Wednesday 28 July a mysterious Internet user going by the moniker of SABobbyT posted a video clip on YouTube of popular local comedian Trevor Noah going ape about mobile networks in general and Cell C in particular. In just four days Cell C found the offending link, watched it, decided to respond publicly, briefed its big agency (Ogilvy) to swiftly book media space in the Sunday Times and Rapport and to develop an advert apologising to Noah. The ad was created, approved and placed in record time before the advertising print deadlines for the two weeklies closed.

So what exactly did the ‘then nearing Super-Hero status’ Cell C CEO do? More from Mandy De Waal and The Daily Maverick:

Two “mea culpa”’ full-page adverts signed by Cell C’s CEO Lars P. Reichelt later, and the Twitterverse was abuzz with chat about social media hero Trevor Noah, how he had stood up for the small guy and what swell people Cell C were for coming clean. The story was getting airtime and was reported on by no less than Bloomberg while other media pundits were calling the effort a marketing “master-stroke”.

However, what started as a ‘master-stroke’ is fast turning into a sinking ship (in some circles anyway – search cellc on Twitter and scroll through). You can read other’s views on why they think this has been a ‘master-sink’, here, here and here, but I’d like to comment on simply this:

What Cell C and Trevor ‘I need a lifeboat’ Noah missed in all of this, is that they picked a social media space to execute their very clever campaign. They used a new world platform with old world marketing antics. They just don’t go together easily.

The Social Media space has, at some levels, become a sacred space created away from the power, smoke and mirrors of traditional media. There’s a new set of rules that governs, towards the promise of more authentic and honest dialogue. It’s a space that belongs to everyone, equally. No matter your status, your money, your power. In the world of Social Media we can all stand together as equals. You may be able to shout further than I can, because of the size of your network, but you can’t shout any louder. Your view is as important as my view.

So when Cell C (powerful and wealthy) steps into ‘our space’ and sends communication to apparently ‘one of our own’, who can shout quite far with his ‘friend base’ of over 120 000 on FaceBook, and thereby invites us to accept their communication as honest, transparent and full of integrity, and then confesses to this being simply a marketing campaign, you can understand why people are responding the way they are.

My prediction is that Cell C and Trevor Noah will lose credibility through this event. It’s a classic case of two parties not understanding the shifts that have taken place in this new-way-of-connecting-world. Of course they wont lose on every front. Some people out there (see Twitter again) love that they’ve been pranked (or should that be Arked? Or even Noah’d?). But this will remain, for a long time, as a case study of how you don’t do social media.

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Do we Twitter because we’re human, and are we human because we Twitter?

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The most important development opportunity of the next two decades

One of my personal passions is trying to work out how to help developing countries, especially in my home continent of Africa, can help their people out of debilitating poverty. I believe it is possible. It is certainly desirable at all sorts of levels.

One of the possibilities that presents a huge opportunity to help developing countries take a quantum leap forward in wealth development is the fact that the majority of their commodity and resource wealth is most likely yet to be discovered. Put another way: “There’s gold in them hills”.

Here’s a pop quiz to prove my point. Imagine an average square mile of the earth’s surface. How much sub surface value is there in the earth below it? I’m talking about the sub soil resources, minerals, etc that can be extracted and commodotised. In the typical OECD country (and OECD countries account for a quarter of the earth’s surface), each square mile has about $ 300,000 of sub soil assets below it.

In Africa, what do you think that number is? Is it less or more?

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Are Most Big Corporates Really Psychopaths?

RANT ALERT. Most times I try to be a dispassionate researcher of the new world of work. But sometimes I just can’t take it anymore. Today is one of those days…

Almost every day I pick up a story on the Net of someone being fired by their company for some indiscretion related to social media or digital communications. I suppose people get fired every day for breaching company policies, but when you dig into most of these stories, you really get a feeling that the people in charge just have no freaking clue and are acting like reactionary, idiotic psychopaths.

A psychopath is “a person afflicted with a personality disorder characterized by a tendency to commit antisocial, perverted, criminal, amoral and sometimes violent acts and a failure to feel guilt for such acts.” (dictionary.com)

It may be a bit over the top to call the reflex firing of a person a psychopathic act, but it certainly is not the act of a rational, emotional stable or intelligent entity either. And when it is clear that someone has been fired largely because their employer just does not understand how social media or digital communications work, then I think you can label it antisocial, perverted, criminal and amoral. And normally there is no apology later. That’s a psychopath then!

Is your company a psychopath? You’d be surprised who else is…

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BP might fix their well, but big industry is still broken

As I write this, BP have capped their gushing oil well in the Gulf of Mexico (although they still need to complete tests on the cap – read the news here). At last! But the crisis is, of course, nowhere near over. A longer term fix for the well is needed, and the cleanup of the Gulf will take years. So, as we enjoy this moment, it’s important to realise that we need to change the way our big industrial companies are run. We live in a fragile world at huge threat from the choices we have made and the industries we require to fuel our lifestyles.

This conversation is not made any easier by the fact that BP have bungled the handling of this issue from the start. From Tony Hayward’s ridiculous attempts to put solar panels on his house to their denial of access to dirty beaches making the “land of the free” more draconian than communist Russia used to be. President Obama has also mishandled this with his “kick ass” approach to “British Petroleum”. But at least they’ve been in the news, and had huge pressure placed on all parties to find a solution. And at least BP has admitted the mess and promised a pot of money to clean it up.

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Barack Obama rants against technology and releases Apps at the same time

Just a few weeks ago, America’s President ranted against technology. This surprised me because he is the first President to keep his mobile phone (it’s a Blackberry), made extensive use of the Internet (including social media) in his election campaign, and seems to be quite savvy about how to use new media to get his message across.

Then, last week, the White House launched an entire series of Apps (I have an iPhone, so know that the Apps work on that, but they seem to be for many different devices). All of this points to a government willing to embrace new technology.

Yet, the President had a good old go at technology in May. Was he just tired of how some of his detractors use the technology? If so, then why shoot the messenger? That is the title of a great little piece in The Economist from May 2010. I didn’t blog on it then because it was just a minor story. But given the release of these Apps by the Whitehouse, the irony of the story called out to me. So, read The Economist’s view from May here, or an extract below.

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A Looming Crisis: World Water Wars

People go to war when their way of life is threatened. I have written before about the many issues we face in the coming years that threaten our way of life. These include global warming/climate change, pollution, pandemics, nuclear bombs, intelligent machines, genetics, and more.

More and more I am becoming convinced that the next major regional/global conflict will be over water. We are much more likely to have water wars in the next decade than nuclear ones.

And I were to guess, I’d say that it is most likely to happen in around North East Africa. This is a region with its own internal issues. But it also has the foreign involvement of America, China, the Middle Eastern Arab nations, and (increasingly) Israel. Quite a potent mix…

Last week, Addis Ababa, Ethiopia hosted the 18th regular meeting of the Council of Ministers of Water Affairs of the Nile Basin countries. In the lead up to the conference, Ethiopia, Rwanda, Uganda, Tanzania and Kenya, the five countries that are all upstream of Egypt and Sudan concluded a water-sharing treaty – to the exclusion of Egypt and Sudan. This has obviously reignited the longstanding dispute over water distribution of the world’s longest river in the world’s driest continent.

Egypt is currently the largest consumer of Nile water and is the main beneficiary of a 1929 treaty which allows it to take 55.5 billion cubic metres of water each year, or 87% of the White and Blue Nile’s flow. By contrast, Sudan is only allowed to draw 18.5 billion cubic metres.

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Scottish journo doing SA proud by showing @SkyNews and @emmahurd how it’s done

A few years ago I met Martin Geissler (@mmgeissler). He’s a dad from my daughters school. He’s the Africa Correspondent for itv news. According to Wikipedia:

ITV is a public service network of British commercial television broadcasters, set up under the Independent Television Authority(ITA) to provide competition to the BBC. ITV is the oldest commercial television network in the UK, having begun broadcasting in 1955.

With all the SA Twitter noise about @SkyNews and their negative slant on the World Cup, I figured it’d be good to ‘showcase’ another journo who works hard to represent a fuller picture. Of course nobody get’s the full picture. I get that.

SkyNews has been a focal point for my community on Twitter through @guntherlunch’s creation of @emmaturd a parody of @emmahurd. Her generally negative reporting of the SA World Cup has created some wonderful humour via Mr Bullard.

Martin’s a UK native who, apart from having lived in SA for a few years now, works really hard to package news and happenings as close to the way they are as is possible. I know this because I’ve sat for many hours listening to how hard he works to get to the ‘real story’. Of course journos at Sky News would claim the same, but I’ve heard Martin’s pain in what it takes to get as many sides as he can.

Take a look at some of Martin’s stuff:

• What Hope?
• Hunting Albinos (CNN Video)

So I guess all I’m suggesting is that in your search for a different angle, here’s a Scottish-South Africa perspective I’ve always enjoyed listening to and being challenged by – Martin Geissler’s World Cup Blog

Disclaimer: I’m not employed by itv or Martin Geissler in any way shape or form. I just like people who work hard at putting together the fullest picture possible in an uncomfortable and challenging way.

Apologies – I know Martin isn’t going to like that I wrote this promotional post of himself as an individual. But I like his stuff and I think you might too?

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The beautiful game: Is it just me?

Is it just me or have football players taken acting lessons? The FIFA World Cup has been littered with theatrical dives and players going down as if they have been poleaxed by a Mike Tyson hook when in fact replays show there has been no contact whatsoever! It is sickening and will stain the beautiful game doing irreparable harm if nothing is done about it. Someone has to do something to check what seems to be a growing trend. Players falling as if a sniper has taken them down isn’t doing the game any good and if Blatter wants to protect the image of the sport then the law-makers have to impose stricter sanctions on the actors. Referees must be told to be harsh on such theatrics and here is where technology could play a part through post match citing – much like rugby uses to deal with dirty play. Another approach would be for managers themselves to come out and condemn such acting rather than defend the dives as they currently do. It doesn’t matter what methods are employed – fines, bans or cards…but for the sake of the game please somebody do something!

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America’s (ongoing) dependence on (foreign) oil

The BP oil spill provides an opportunity for America to turn inward and think about it’s dependence on oil to make its economy work. Environmentalists have been saying for years that this is a cause of great harm to the planet, and now that such a harm befalls America’s shores maybe it’s time to have the conversation about alternatives. I don’t know what else it will take, since this is something America has been promising itself for decades.

Here are two great videos that highlight the promises of every American president since Nixon (yes, way back in the 1970s, and EVERY President since) to reduce dependence on (foreign) oil. Most have also promised to reduce dependence on all oil, regardless of source (i.e. it’s not just an oil supply issue, it should be an oil usage issue, too). So far, President Obama has simply used bluster to kick BP’s “ass”, rather than turn the conversation to where it should be. But maybe it’s too early for that. Hopefully a blackened southern coastline will help Americans have the right conversation.

Here then the two videos (you may live in a country where the Daily Show video is unavailable):
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BP’s record – not just an oil spill – and a lesson for us all

In March 2007, a blog entry I wrote received quite a lot of attention in the South African press. In it, I suggested that certain industries had the potential to get themselves into a lot of trouble if they chased the goal of improved efficiency to its logical conclusion. The Economist (“Browne Out“, 18 Jan 2007) had pointed out that oil companies have so stripped out costs and employees, that all their engineers work on the ragged edge of their abilities and capabilities. I wrote:

If (and when!) they have problems, oil companies are unlikely to have the capacity to respond quickly and effectively in emergency situations. Ruthlessly cutting costs eventually strips out the ability of a company to do what it has to do. It stretches staff, and demoralises them as well, often beyond their ability to cope with situations that arise. In oil companies, as in other industries, this can have catastrophic results, in the glare of public scrutiny.

Obviously, a lot of media attention is currently focused on BP and its catastrophic oil spill in the Gulf of Mexico. Greenpeace is going to town with a campaign to “rebrand” BP (see it here). But, behind the obvious story is another even more damaging one.

US Occupational Safety and Health Administration records show that in the last 3 years, BP has had 760 “egregious and willful safety violations” (download PDF report here). To put this into some industry perspective, during that same period Sunoco and ConocoPhillips both had 8, Citgo had 2, and Exxon had but 1. Yes, that’s the same Exxon that used to hold the record for the worst US oil disaster! One violation for them, and 760 for BP. That sounds like a disaster waiting to happen, doesn’t it?

I can’t comment on that, nor on the response (or lack thereof) by the OSHA. I can say that it currently looks as if BP are going to take responsibility and sort things out. But that will run up against the point I was making three years ago – what capacity do they have now that they’re in crisis?

There is obviously a case for efficiency. But there is also an immensely big case to be made for carrying some excess capacity in your company. It allows you to give employees some time to think. It means you can slow things down just a touch, and do them properly. It provides space for creativity and innovation. It enhances work-life balance, and therefore quality of life for employees. So, possibly the profit won’t be quite as good as it might have been. But the long term sustainability of your company is much more secure.

I hate to be proven right with my predictions of the worst. But, in this case, BP, “I told you so”. Hopefully the rest of us can learn some lessons here too.

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China starts to wake up to sustainability (be afraid, very afraid)

About a year ago, I wrote a blog about China and environmental sustainability. It was something Thomas Friedman had written about how he thought America would be able to benefit from the future need to clean up China’s pollution. I think he (and I) failed to understand both the Chinese mindset and the power of a government based on centralised power.

China is starting to wake up to sustainability. And now they can move extremely quicky. Unemcumbered by lobby groups (think of big oil and the US government for an example of what can happen when lobbyists get involved in democratic processes), the Chinese government is able to quickly impose legislation and rewards. And it looks as if they’re starting to do this.

In many cities now, businesses are required to comply with a fifteen point sustainability checklist. If they do not, they are refused access to capital and bank loans, and have been threatened with increased taxation. At a personal level, and example of this happened just last week, when five major cities launched subsidies for those people who buy hybrid or electric cars. The subsidies are significant and will definitely influence consumer behaviour significantly (read about this at Reuters or the NY Times – this article typically sees it as a stealth subsidy to undermine American car manufacturers, rather than a green subsidy, but it still provides interesting data on the project).

The sleeping giant is waking up. This could change everything, and be just the boost that the green economy desperately needs. For those people who have been saying “Until China does something about pollution and energy use, it doesn’t matter what we do in the West”, I have a simple message: “China just did something”. So, what’s your excuse now?

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Some hidden gems from our archives – valuable reading!

This blog has been running since 2003, and has nearly 2,000 individual entries. At one level it is a living library of the “new world of work”, captured as it emerges around us. I have recently taken some time to troll through the archives, from day one, and discovered again some remarkable gems.

These articles from 2003 and 2004, are still well worth reading. They were prescient then, and remain important now, as we think about the implications of the new world of work that we find ourselves in. Enjoy:

• 10 Skills for the future
• Thirteen things smart leaders know: how to thrive in a relational economy
• Change has changed
• What women want: the future of leadership
• Relearn to relate
• If you’re not failing, you’re not trying hard enough
• A brave new world, for women
• The great HR paradox: A thought bullet for CEOs everywhere

Happy reading!

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Great Conversation between Steve Jobs and Bill Gates

I’m sure this has done it’s rounds, but I got it today and spent a fair amount of time recovering from an aching stomach. Very clever storyboard of images, wherever and whoever it originated from?

Thanks to Conference Speakers International for sending it. Great site to visit, especially because they made me their Speaker of the Month : )

Click on ‘Read more‘ to see the storyboard of images.

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Synthetic Life created – this changes everything

I have been predicting it for some time, and today it was announced! J. Craig Venter runs the company that first sequenced the human genome. Now, his team has created what they’re calling synthetic life.

They’ve actually created an entirely synthetic genome, built from chemicals in a lab. They inserted the genome into a cleaned out cell. When they did so, the new genome fired up exactly as if it were a “natural” genome.

Read the press release here.

Of course, everything has gone crazy. The media are in a frenzy. Some claim he’s playing God. Others are freaking out that these things will “escape” into nature and destroy life. And some are saying that it will end disease and bring about paradise on earth. The truth, as always, will lie somewhere in between these extreme views.

But this changes everything. Mark this day. A new era has dawned.

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PodCast Update – Nine Business reasons to go Green

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Personal Details – Are we opening up or locking down?

I’ve come accross a couple of interesting articles in the last week. They’ve not all focussed exclusively on ‘privacy’, but they’ve mentioned it somewhere. What has me interested is that they’re not all saying the same thing. In fact they’re saying some very different things about the future of how much I’ll be inclined to let you know about me?

The New York Times carried an article, ‘The Tell-All Generation Learns Not To – At Least Online’. They suggest that today’s young people are showing signs of bucking the ‘tell-all’ trend we’ve seen emerge, that has us in a panic aboutwhat’s appropriate and what’s not.

The conventional wisdom suggests that everyone under 30 is comfortable revealing every facet of their lives online, from their favorite pizza to most frequent sexual partners. But many members of the tell-all generation are rethinking what it means to live out loud.

On the other end of the spectrum you have articles like, ‘Life in 2020: Your Dating History on Display and Other Faintly Disturbing Predictions‘, from FastCompany, that suggest your dating life is going to be all out there for all to see.

Imagine 10 years from now, you order a Bacon and Cheese Whopper, only for a monitor to tell you precisely how many grueling miles you’ll have to run to burn it off. Or someone just glances at your shoes and knows where you bought them. Or consider this: You walk into a bar and your entire dating history is thrown up on display. Would you run for the hills? (I sure as hell would.)

It’s going to be an interesting trend to watch. Will it be a pendulum swing? If Chat Roulette is anything to go by, we’re still swinging (excuse the pun) to ‘wide open’, but there will be lessons that are learned as we adjust. Where that adjustments settles down to, if it does at all, is going to be interesting?

I did smile at a story from Mashable, ‘48% of Parents Friend Their Kids on Facebook‘. If this stat has any truth to it, it’s little wonder today’s younger set are going into lock down mode. It’s not because of morals, or thinking about their future. It’s simply because mom and dad are watching : )

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Geoengineering – part of the solution for a warming planet?

I am convinced by the science: our planet is warming up. This appears to be part of a natural cycle that has flowed through the planet’s history. But it also seems very clear to me that human activity on the planet – especially in relation to generating and consuming energy – is exacerbating the issue. It also seems clear that even a few degrees of change in average temperatures will have significant (and sometimes devastating) consequences for life on earth. I am therefore also convinced that “something must be done” – we cannot just keep doing what we’re doing and hope for the best.

This is a complex issue, though. Complex: not because it is difficult, but rather because it involves an integrated mesh of interconnected elements, and has no obvious starting point or critical lever. It’s like a water balloon that you’re trying to squeeze into a smaller shape. Every time you squeeze one part, another part pops out. Trying to reduce your carbon footprint is like that. For example, buy local fruit and vegetables only, and you destroy industries in developing countries and reduce trade, forcing them to become less sustainable.

The solutions will need to be as systemic as the problem is. We may even need solutions that create lesser problems.

The authors is Superfreakonomics recently wrote in a Spectator special edition about geo-engineering. I think their viewpoint is worth reading. Read it here, or an extract below.

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WTF Goldman Sachs

Most of the time I am able to be even keeled and calm about most things. I have had occasion in life to be in tough, crisis and challenging situations, and have a reputation for being cool, calm and collected. I like to think of myself as even-keeled, balanced and consistent. I also do not swear. I don’t like profanity. But sometimes a story comes along that cannot be expressed in any other way than through sheer, incredulous, mind blowing, sputtering outrage. The story behind the story of the investigation into Goldman Sachs is one of those…

Both the SEC (America’s Securities and Exchange Commission) and the FSA (The UK’s Financial Services Authority) have announced investigations into fraud at Goldman Sachs. The SEC has actually laid a civil suit.

The SEC is charging that Goldman worked with Paulson & Co, a hedge fund, to create a package of risky subprime mortgages (called Abacus security) that was intentionally designed to fail. That’s obviously horrific – investment bankers and advisors creating a product that they knew would collapse and lose money. But that’s not the fraud. Read on.

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