Why being ‘illogical’ can unlock competitive advantage

Source: Kevin Trotman, Flickr (2005)

“The opposite of a profound truth may well be another profound truth.”

Niels Bohr

Nobel Prize-winning physicist Niels Bohr was no intellectual slouch and so his reflections are well worth paying attention to. Bohr was a founder of quantum theory which showed us that, rather than being confined to binary ‘either–or’ states, the world at the subatomic level can be ‘both–and’ – capable of seemingly contradictory positions that confound our intuitions and experiences of nature. Once we accept the paradoxes the physical world can accommodate, we begin to see that what’s true in quantum mechanics can also be true in the realm of ideas – that the opposite of a good idea need not be a bad idea; it can also be another good idea.

Logic and rationality are highly-rated attributes in business school – as well as in life more generally – and for good reason; when dealing with a world of fixed quantities and knowable entities, logic is the best guide. Logic gets us into the air and keeps us there. Logic puts all the world’s information at our fingertips. But humans are not built to run on logic; it is not our operating system.

For our ancestors, it made far more sense to be neurotic and hyper-sensitive to risk than it did to be logical and curious about probability. Evolution taught us to flee rustling in the grass. Were our homo sapiens forebears to explore each noise in the rushes, most of the time it would be just the wind, but once in a while a dangerous predator might pounce. Skittish instincts rather than logical inquiry were rewarded by natural selection, and so ‘irrational’ behaviour was hard-coded into our psychological DNA.

The messy, occasionally capricious evolutionary underpinnings of our psychology make predicting and influencing human behaviour a less straightforward challenge than simply mapping out the ‘rational’ choices or courses of action. Alan Kay, a pioneer of the graphical user interface, advised us that a change in perspective is worth at least 40 IQ points. At LovedBy, we understand that when dealing with human behaviour, value can be unlocked by a change in perspective, and by asking ourselves the question: What if the opposite was also true?

Here are just four examples where the opposite of the logical conclusion turned out to be true:

Pricing

When Dove soap wasn’t selling as well as its competitors, Unilever didn’t reduce the price as the economic logic dictated. Instead they raised the price, and sales increased. As the success of Stella Artois has taught us, some brands have to be ‘reassuringly expensive’ to make sense to the customer. Being too inexpensive raises suspicions – can they be any good at that price? Why do budget airlines spend so much effort telling us what they don’t include? Because they don’t want the customer to think they might be cutting corners on maintenance!

Proliferation

We find identity and reassurance in the habits of our peers – if it’s popular it must be good, or at least not that bad. It’s why we buy brands – not because we expect a Samsung to be the best TV, but because it’s almost certainly not the worst. And yet, of course, we also see value in scarcity and exclusivity – if no one else I know has it, it must be good. We don’t buy a Rolex because everyone has one; we’d buy a Swatch for that.

Pithiness

‘Too long; didn’t read’(TL;DR) is the maxim of our age – people don’t have the time or inclination to read or listen for long; keep content snappy and concise; make it tweetable. And yet, Joe Rogan signs a deal with Spotify for $100m for podcasts that average two hours in length. TL;DR?

Politics

Polarisation defines contemporary politics – you’re either Conservative or Labour, Republican or Democrat, Left-wing or Right-wing – with the two sides seemingly further apart than ever before. And yet, as shown by research from the University of Maryland, these binaries can be exaggerated, with a significant amount of agreement on the issues between voters regardless of party or ideology. This apparently simple political divide was similarly challenged by the statistician Nassim Taleb in his 2018 book, Skin in the Game:

“I am, at the federal level, libertarian; at the state level, Republican; at the local level, Democrat; and at the family and friends level, a socialist. If that doesn’t convince you of the fatuousness of left vs right labels, nothing will.”

It’s not that logic is overrated, it’s that human decision-making is context and path dependent. What works in one setting can be entirely inappropriate in another. Why does fish taste better by the sea? Why does wine taste better in heavy bottles? Why do we pay £3.50 at Starbucks and find £1.50 expensive in a roadside café?

“OK”, I hear you say, “this is all very ‘psychologically interesting’, but what does it mean for my business/brand/organisation?”

The point is that all roads to rationality lead down the same path, towards convergence and competition for the same pot of customers. Rationality is assumed to be the very essence – the sine qua non – of the corporate world; rationality is seen as the guiding light, the messenger of insight and reason that unlocks the gates to growth, differentiation and user satisfaction. However, real world business examples illustrate that this is often far from the truth and that insight, opportunity and disruption are more likely to be unlocked by thinking irrationally and asking: What if the opposite were true?

A final, logic-defying example demonstrates the astronomic value of sometimes eschewing the rational approach:

P*ss

If Dietrich Mateschitz had followed logic in seeking to overturn the dominance of Coca-Cola in the soft drink market he would have briefed his team with: We need a soft drink that tastes better than Coke, comes in a bigger can and costs less. That would have been a rational brief in an attempt to compete with Coke. Instead he chose to launch a drink that came in a tiny can, cost significantly more than Coke, and achieved record low scores in taste tests, with one taster even adding, “I wouldn’t drink this p*ss if you paid me to.” How many corporate boards would have signed that off?

And yet… Red Bull has the largest market share of any energy drink, with 7.5 billion cans sold in 2019, and is such a profitable business they can run several football clubs and a Formula One team on the side.

So, don’t be logical, be psychological!

Dr Chris Loxley
Head of Behavioural Insight, LovedBy

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