http://www.boston.com/news/health/articles/2008/12/22/your_brain_on_shopping?mode=PF
Your brain on shopping
Neurscientists expose inner battle between pleasure and pain centers
By Carey Goldberg, Globe Staff December 22, 2008>
Shopping is war.>
The battle is not just among the jostling crowds at the sale bins and cash registers in these pre-Christmas days; it is also between warring factions of our own brains, some economists and neuroscientists say.>
Recent studies suggest that each buying decision plays out in the brain as a fight between a pleasure center seeking the bliss of acquisition and an aversion center seeking to avoid the pain of paying.>
In the hot field of neuroeconomics, MRI scans have turned up heightened activity in deep, primitive areas of the brain as subjects shop. The nucleus accumbens, a seat of pleasure, lights up when they are contemplating a purchase, and the insula, a seat of disgust and pain, lights up when they are thinking about how much that purchase is going to cost.>
As such findings accumulate, they suggest potential strategies for spending less - or at least, more wisely - at this difficult juncture of dark economy and season of light.>
"Your purchasing decisions are largely emotional, driven by very inarticulate feelings you have, this pain-versus-pleasure tug of war," said Jonah Lehrer, author of the forthcoming book, "How We Decide.">
"So it's very important to impose a little bit of deliberation onto that emotional process, force yourself to think long-term, and rationally think through the consequences of what is ultimately a very emotional decision," he added.>
How might that be done?>
Cash is best: First and foremost, researchers say, if you want to spend smarter, avoid using your credit card.>
"One of the pernicious qualities of credit cards is that they anesthetize the pain of paying, which is ordinarily your first defense against overspending," said George Loewenstein, professor of economics and psychology at Carnegie Mellon University.>
Need convincing? In a 2001 study, two professors at MIT's Sloan School of Management held an auction for tickets to a sold-out Celtics game, and divided subjects into those who must pay cash within 24 hours and those who must pay with credit cards. The credit-card buyers were willing to bid on average up to twice as much as the cash buyers, they found.>
Know your feelings: Be aware that emotions that do not penetrate conscious awareness, and that have little to do with an actual buying decision, may still affect it. One study found that shoppers tended to spend much more when they were feeling down. Another found that men who had just been exposed to erotic pictures were more willing to take economic risks, and the trick seemed to be that the erotica set the nucleus accumbens, the pleasure center, on a roll.>
"The idea is that if you can just change activation in these areas, no matter what the stimulus is, you might be able to push around financial decision-making," said Brian Knutson, an associate professor of psychology and neuroscience at Stanford.>
So how can you fight back against your unconscious emotions? Perhaps shop with a buddy who can supply reality checks, Knutson said. Others suggest shopping with a list and vowing not to deviate from it.>
To avoid the stimulating atmosphere of stores, you might want to shop online. But that also has its dangers. "I would say one-click shopping on the Internet is a lot more dangerous than paying cash at the store," Loewenstein said. "You can do a lot of damage in a short time.">
Lehrer also advises staying away from the free treats offered at Costco, Whole Foods, and elsewhere. As they activate the pleasure center, "they put you in the reward mood" for buying, said Lehrer.>
Keep your distance: Avoid flirting with items you cannot afford, trying them on or carrying them around until they start to feel like yours, to avert what neuro-economists call "the endowment effect.">
Knutson explains it like this: In his classes, he'll give a student a coffee mug, then ask how much he must pay to get the student to part with it. They usually reply that they'll sell it for $4 to $6. But if he asks the other students how much they'd pay for such a mug, they usually price it at $2 or $3. Though it makes no economic sense, we tend to value things more highly simply because they're ours. In a recent study, Knutson noted, brain scans bore out the phenomenon: the insula, the pain center, tended to kick in when subjects contemplated selling items they viewed as theirs.>
Keep moving: Some researchers warn against buying too much in one store. "You may experience something called 'decreasing sensitivity to losses,' " said Loewenstein. "Especially if you've spent a large amount, say $100, at a store, you don't want to start buying a bunch of small stuff, because it will start feeling free. If you go to another store, it won't feel free.">
Tightwads, in particular, need to watch out for this, he said, because they are prone to spending binges when they finally loosen their pursestrings.>
Beware of bargains: As with credit cards, studies have found that the feeling of getting a bargain blunts the pain of payment. Call it the "You can't go wrong at this price" effect. The insula lights up when people pay a price that seems high, and shuts down when they think they are getting a good deal, Loewenstein said: "That can interfere with rational decision-making just as much as the excitement about the good itself.">
Know why we buy: We give presents to foster social bonds, points out Dan Ariely, professor of behavioral economics at Duke and author of the recent book Predictably Irrational - and realizing that can help us refocus how we spend. Ariely says he tries to buy gifts that people wouldn't have bought for themselves, either because they would feel too decadent or because they lacked knowledge about the item.>
Get over the idea that it's about money, Ariely said, and "You might be able to spend much less and get much more meaning out of it.">
Carey Goldberg can be reached at goldberg@globe.com.
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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Monday, December 22, 2008
The Secrets to Successful Strategy Execution
http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?_requestid=27614&value=BR0806&ml_subscriber=true&ml_action=get-article&ml_issueid=BR0806&articleID=R0806C&pageNumber=1
Harvard Business Review, Jun 2008
The Secrets to Successful Strategy Execution
Research shows that enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness—decision rights and information flow.>
by Gary L. Neilson, Karla L. Martin, and Elizabeth Powers>
♦ INTERACTIVE TOOL: Use this simulator to test the effectiveness of various change initiatives.>
A brilliant strategy, blockbuster product, or breakthrough technology can put you on the competitive map, but only solid execution can keep you there. You have to be able to deliver on your intent. Unfortunately, the majority of companies aren’t very good at it, by their own admission. Over the past five years, we have invited many thousands of employees (about 25% of whom came from executive ranks) to complete an online assessment of their organizations’ capabilities, a process that’s generated a database of 125,000 profiles representing more than 1,000 companies, government agencies, and not-for-profits in over 50 countries. Employees at three out of every five companies rated their organization weak at execution—that is, when asked if they agreed with the statement “Important strategic and operational decisions are quickly translated into action,” the majority answered no.>
Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interest. In our work helping more than 250 companies learn to execute more effectively, we’ve identified four fundamental building blocks executives can use to influence those actions—clarifying decision rights, designing information flows, aligning motivators, and making changes to structure. (For simplicity’s sake we refer to them as decision rights, information, motivators, and structure.)>
In efforts to improve performance, most organizations go right to structural measures because moving lines around the org chart seems the most obvious solution and the changes are visible and concrete. Such steps generally reap some short-term efficiencies quickly, but in so doing address only the symptoms of dysfunction, not its root causes. Several years later, companies usually end up in the same place they started. Structural change can and should be part of the path to improved execution, but it’s best to think of it as the capstone, not the cornerstone, of any organizational transformation. In fact, our research shows that actions having to do with decision rights and information are far more important—about twice as effective—as improvements made to the other two building blocks. (See the exhibit “What Matters Most to Strategy Execution.”)>
What Matters Most to Strategy Execution
Take, for example, the case of a global consumer packaged-goods company that lurched down the reorganization path in the early 1990s. (We have altered identifying details in this and other cases that follow.) Disappointed with company performance, senior management did what most companies were doing at that time: They restructured. They eliminated some layers of management and broadened spans of control. Management-staffing costs quickly fell by 18%. Eight years later, however, it was déjà vu. The layers had crept back in, and spans of control had once again narrowed. In addressing only structure, management had attacked the visible symptoms of poor performance but not the underlying cause—how people made decisions and how they were held accountable.>
This time, management looked beyond lines and boxes to the mechanics of how work got done. Instead of searching for ways to strip out costs, they focused on improving execution—and in the process discovered the true reasons for the performance shortfall. Managers didn’t have a clear sense of their respective roles and responsibilities. They did not intuitively understand which decisions were theirs to make. Moreover, the link between performance and rewards was weak. This was a company long on micromanaging and second-guessing, and short on accountability. Middle managers spent 40% of their time justifying and reporting upward or questioning the tactical decisions of their direct reports.>
Armed with this understanding, the company designed a new management model that established who was accountable for what and made the connection between performance and reward. For instance, the norm at this company, not unusual in the industry, had been to promote people quickly, within 18 months to two years, before they had a chance to see their initiatives through. As a result, managers at every level kept doing their old jobs even after they had been promoted, peering over the shoulders of the direct reports who were now in charge of their projects and, all too frequently, taking over. Today, people stay in their positions longer so they can follow through on their own initiatives, and they’re still around when the fruits of their labors start to kick in. What’s more, results from those initiatives continue to count in their performance reviews for some time after they’ve been promoted, forcing managers to live with the expectations they’d set in their previous jobs. As a consequence, forecasting has become more accurate and reliable. These actions did yield a structure with fewer layers and greater spans of control, but that was a side effect, not the primary focus, of the changes.>
The Elements of Strong Execution
Our conclusions arise out of decades of practical application and intensive research. Nearly five years ago, we and our colleagues set out to gather empirical data to identify the actions that were most effective in enabling an organization to implement strategy. What particular ways of restructuring, motivating, improving information flows, and clarifying decision rights mattered the most? We started by drawing up a list of 17 traits, each corresponding to one or more of the four building blocks we knew could enable effective execution—traits like the free flow of information across organizational boundaries or the degree to which senior leaders refrain from getting involved in operating decisions. With these factors in mind, we developed an online profiler that allows individuals to assess the execution capabilities of their organizations. Over the next four years or so, we collected data from many thousands of profiles, which in turn allowed us to more precisely calibrate the impact of each trait on an organization’s ability to execute. That allowed us to rank all 17 traits in order of their relative influence. (See the exhibit “The 17 Fundamental Traits of Organizational Effectiveness.)>
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Harvard Business Review, Jun 2008
The Secrets to Successful Strategy Execution
Research shows that enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness—decision rights and information flow.>
by Gary L. Neilson, Karla L. Martin, and Elizabeth Powers>
♦ INTERACTIVE TOOL: Use this simulator to test the effectiveness of various change initiatives.>
A brilliant strategy, blockbuster product, or breakthrough technology can put you on the competitive map, but only solid execution can keep you there. You have to be able to deliver on your intent. Unfortunately, the majority of companies aren’t very good at it, by their own admission. Over the past five years, we have invited many thousands of employees (about 25% of whom came from executive ranks) to complete an online assessment of their organizations’ capabilities, a process that’s generated a database of 125,000 profiles representing more than 1,000 companies, government agencies, and not-for-profits in over 50 countries. Employees at three out of every five companies rated their organization weak at execution—that is, when asked if they agreed with the statement “Important strategic and operational decisions are quickly translated into action,” the majority answered no.>
Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interest. In our work helping more than 250 companies learn to execute more effectively, we’ve identified four fundamental building blocks executives can use to influence those actions—clarifying decision rights, designing information flows, aligning motivators, and making changes to structure. (For simplicity’s sake we refer to them as decision rights, information, motivators, and structure.)>
In efforts to improve performance, most organizations go right to structural measures because moving lines around the org chart seems the most obvious solution and the changes are visible and concrete. Such steps generally reap some short-term efficiencies quickly, but in so doing address only the symptoms of dysfunction, not its root causes. Several years later, companies usually end up in the same place they started. Structural change can and should be part of the path to improved execution, but it’s best to think of it as the capstone, not the cornerstone, of any organizational transformation. In fact, our research shows that actions having to do with decision rights and information are far more important—about twice as effective—as improvements made to the other two building blocks. (See the exhibit “What Matters Most to Strategy Execution.”)>
What Matters Most to Strategy Execution
Take, for example, the case of a global consumer packaged-goods company that lurched down the reorganization path in the early 1990s. (We have altered identifying details in this and other cases that follow.) Disappointed with company performance, senior management did what most companies were doing at that time: They restructured. They eliminated some layers of management and broadened spans of control. Management-staffing costs quickly fell by 18%. Eight years later, however, it was déjà vu. The layers had crept back in, and spans of control had once again narrowed. In addressing only structure, management had attacked the visible symptoms of poor performance but not the underlying cause—how people made decisions and how they were held accountable.>
This time, management looked beyond lines and boxes to the mechanics of how work got done. Instead of searching for ways to strip out costs, they focused on improving execution—and in the process discovered the true reasons for the performance shortfall. Managers didn’t have a clear sense of their respective roles and responsibilities. They did not intuitively understand which decisions were theirs to make. Moreover, the link between performance and rewards was weak. This was a company long on micromanaging and second-guessing, and short on accountability. Middle managers spent 40% of their time justifying and reporting upward or questioning the tactical decisions of their direct reports.>
Armed with this understanding, the company designed a new management model that established who was accountable for what and made the connection between performance and reward. For instance, the norm at this company, not unusual in the industry, had been to promote people quickly, within 18 months to two years, before they had a chance to see their initiatives through. As a result, managers at every level kept doing their old jobs even after they had been promoted, peering over the shoulders of the direct reports who were now in charge of their projects and, all too frequently, taking over. Today, people stay in their positions longer so they can follow through on their own initiatives, and they’re still around when the fruits of their labors start to kick in. What’s more, results from those initiatives continue to count in their performance reviews for some time after they’ve been promoted, forcing managers to live with the expectations they’d set in their previous jobs. As a consequence, forecasting has become more accurate and reliable. These actions did yield a structure with fewer layers and greater spans of control, but that was a side effect, not the primary focus, of the changes.>
The Elements of Strong Execution
Our conclusions arise out of decades of practical application and intensive research. Nearly five years ago, we and our colleagues set out to gather empirical data to identify the actions that were most effective in enabling an organization to implement strategy. What particular ways of restructuring, motivating, improving information flows, and clarifying decision rights mattered the most? We started by drawing up a list of 17 traits, each corresponding to one or more of the four building blocks we knew could enable effective execution—traits like the free flow of information across organizational boundaries or the degree to which senior leaders refrain from getting involved in operating decisions. With these factors in mind, we developed an online profiler that allows individuals to assess the execution capabilities of their organizations. Over the next four years or so, we collected data from many thousands of profiles, which in turn allowed us to more precisely calibrate the impact of each trait on an organization’s ability to execute. That allowed us to rank all 17 traits in order of their relative influence. (See the exhibit “The 17 Fundamental Traits of Organizational Effectiveness.)>
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Friday, December 19, 2008
People 'still willing to torture' ...why apparently ordinary people can commit atrocities
http://news.bbc.co.uk/1/hi/health/7791278.stm
Abstract: "May help explain why apparently ordinary people can commit atrocities..."What we found is validation of the same argument - if you put people in certain situations, they will act in surprising and maybe often even disturbing ways."... when placed under pressure, people will often do "unsettling" things... "It's not that these people are simply not good people any more - [rather]there is a massive social influence going on."..."They tend to identify massively with the 'experimenter', and become very engaged and distracted by the research
BBC News
Page last updated at 10:41 GMT, Friday, 19 December 2008
People 'still willing to torture'
Decades after a notorious experiment, scientists have found test subjects are still willing to inflict pain on others - if told to by an authority figure. >
US researchers repeated the famous "Milgram test", with volunteers told to deliver electrical shocks to another volunteer - played by an actor. >
Even after faked screams of pain, 70% were prepared to increase the voltage, the American Psychology study found. >
Both may help explain why apparently ordinary people can commit atrocities. >
Yale University professor Stanley Milgram's work, published in 1963, recruited volunteers to help carry out a medical experiment, with none aware that they were actually the subject of the test. >
A "scientist" instructed them to deliver a shock every time the actor answered a question wrongly. >
When the pretend 150-volt shock was delivered, the actor could be heard screaming in pain, and yet, when asked to, more than eight out of ten volunteers were prepared to give further shocks, even when the "voltage" was gradually increased threefold. >
Some volunteers even carried on giving 450-volt shocks even when there was no further response from the actor, suggesting he was either unconscious or dead. >
Similar format >
Dr Jerry Burger, of Santa Clara University, used a similar format, although he did not allow the volunteers to carry on beyond 150 volts after they had shown their willingness to do so, suggesting that the distress caused to the original volunteers had been too great. >
Again, however, the vast majority of the 29 men and 41 women taking part were willing to push the button knowing it would cause pain to another human. >
Even when another actor entered the room and questioned what was happening, most were still prepared to continue. >
He told Reuters: "What we found is validation of the same argument - if you put people in certain situations, they will act in surprising and maybe often even disturbing ways." >
He said that it was not that there was "something wrong" with the volunteers, but that when placed under pressure, people will often do "unsettling" things. >
Even though it was difficult to translate laboratory work to the real world, he said, it might partly explain why, in times of conflict, people could take part in genocide. >
Complex task >
Dr Abigail San, a chartered clinical psychologist, has recently replicated the experiment for a soon-to-be-aired BBC documentary - all the way up to the 450-volt mark, again finding a similar outcome to Professor Milgram. >
"It's not that these people are simply not good people any more - there is a massive social influence going on." >
She said that the volunteers were being asked to carry out a complex task in aid of scientific research, and became entirely focused on it, with "little room" left for considering the plight of the person receiving the shock. >
"They tend to identify massively with the 'experimenter', and become very engaged and distracted by the research. >
"There's no opportunity for them to say 'What's my moral stand on this?'" >
Story from BBC NEWS:http://news.bbc.co.uk/go/pr/fr/-/1/hi/health/7791278.stmPublished: 2008/12/19 10:41:36 GMT© BBC MMVIII
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
Abstract: "May help explain why apparently ordinary people can commit atrocities..."What we found is validation of the same argument - if you put people in certain situations, they will act in surprising and maybe often even disturbing ways."... when placed under pressure, people will often do "unsettling" things... "It's not that these people are simply not good people any more - [rather]there is a massive social influence going on."..."They tend to identify massively with the 'experimenter', and become very engaged and distracted by the research
BBC News
Page last updated at 10:41 GMT, Friday, 19 December 2008
People 'still willing to torture'
Decades after a notorious experiment, scientists have found test subjects are still willing to inflict pain on others - if told to by an authority figure. >
US researchers repeated the famous "Milgram test", with volunteers told to deliver electrical shocks to another volunteer - played by an actor. >
Even after faked screams of pain, 70% were prepared to increase the voltage, the American Psychology study found. >
Both may help explain why apparently ordinary people can commit atrocities. >
Yale University professor Stanley Milgram's work, published in 1963, recruited volunteers to help carry out a medical experiment, with none aware that they were actually the subject of the test. >
A "scientist" instructed them to deliver a shock every time the actor answered a question wrongly. >
When the pretend 150-volt shock was delivered, the actor could be heard screaming in pain, and yet, when asked to, more than eight out of ten volunteers were prepared to give further shocks, even when the "voltage" was gradually increased threefold. >
Some volunteers even carried on giving 450-volt shocks even when there was no further response from the actor, suggesting he was either unconscious or dead. >
Similar format >
Dr Jerry Burger, of Santa Clara University, used a similar format, although he did not allow the volunteers to carry on beyond 150 volts after they had shown their willingness to do so, suggesting that the distress caused to the original volunteers had been too great. >
Again, however, the vast majority of the 29 men and 41 women taking part were willing to push the button knowing it would cause pain to another human. >
Even when another actor entered the room and questioned what was happening, most were still prepared to continue. >
He told Reuters: "What we found is validation of the same argument - if you put people in certain situations, they will act in surprising and maybe often even disturbing ways." >
He said that it was not that there was "something wrong" with the volunteers, but that when placed under pressure, people will often do "unsettling" things. >
Even though it was difficult to translate laboratory work to the real world, he said, it might partly explain why, in times of conflict, people could take part in genocide. >
Complex task >
Dr Abigail San, a chartered clinical psychologist, has recently replicated the experiment for a soon-to-be-aired BBC documentary - all the way up to the 450-volt mark, again finding a similar outcome to Professor Milgram. >
"It's not that these people are simply not good people any more - there is a massive social influence going on." >
She said that the volunteers were being asked to carry out a complex task in aid of scientific research, and became entirely focused on it, with "little room" left for considering the plight of the person receiving the shock. >
"They tend to identify massively with the 'experimenter', and become very engaged and distracted by the research. >
"There's no opportunity for them to say 'What's my moral stand on this?'" >
Story from BBC NEWS:http://news.bbc.co.uk/go/pr/fr/-/1/hi/health/7791278.stmPublished: 2008/12/19 10:41:36 GMT© BBC MMVIII
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
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