Switch - Chip Heath [34]
• Motivate the Elephant. 1. Shrink the change. Note that by focusing on quarterly earnings guidance, Samuelson shrinks the change. It’s an attainable first step on the road to long-term thinking. 2. Appeal to identity. Samuelson should play up the fact that the CEOs of some well-respected companies—GE, Microsoft, Coca-Cola, Google, and others—have already made this change. If other CEOs want to act like “forward-thinking CEOs,” this is the step they need to take.
• Shape the Path. 1. Build a habit. Remember the story of Donald Berwick and the campaign to save 100,000 lives? Berwick made it easy for hospitals to join the campaign. They simply submitted the hospital CEO’s signature on a one-page form. At that point, Berwick’s team swooped in to help the hospital build the new habits. What if Samuelson could make it that easy to join a “No Earnings Guidance” campaign? Her team should offer a simple checklist of things to address (including legal, PR, and operational issues) and support the companies as they change. 2. Rally the herd. Some CEOs are reluctant to discontinue earnings guidance. They worry that investors will think it’s a signal that the company is in trouble and will hurry to sell off their stock. Samuelson could help CEOs counter this perception by organizing a “Drop the Guidance” day on a certain date. That way, the timing of the announcement would be less conspicuous. Also, by linking together business leaders who are intrigued by the idea, Samuelson could encourage a bandwagon effect. As we’ll see later, behavior is contagious.
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Destination postcards—pictures of a future that hard work can make possible—can be incredibly inspiring. The first graders dreamed of being third graders. Laura Esserman’s team imagined a new kind of breast care clinic that would cater to the needs of the patient.
But what if your team isn’t inspired?
What if, in fact, members of your team are secretly or not-so-secretly resistant to the vision of the future you’ve articulated? This introduces a new enemy: rationalization. For instance, surely we’ve all made a New Year’s resolution to “Be healthier.” We conjure up a mental image of our future selves—fit and svelte—and we like what we see. But, deep inside us, the commitment isn’t there. A few days after January 1, we get hungry, and we see that gorgeous bag of Cheetos in the pantry.
There’s no question what the Elephant wants: a big mouthful of Cheetoian goodness. And when the Elephant wants something badly, the Rider can be trusted to go along—what choice does he have?—and he may actually begin to formulate rationalizations to excuse the breach. Well, we did eat that salad last Thursday. And for Pete’s sake, we bought 1% milk at the grocery store! We don’t want to go overboard on this diet. A few Cheetos is a reasonable reward for good behavior. And presto! We eat the Cheetos! Even more impressive than that, we’ll still be convinced, in our heart of hearts, that we’re being healthier.
A big-picture goal like “Be healthier” is necessarily imprecise, and that ambiguity creates wiggle room for the Elephant. It makes it easy to rationalize failure. One response to this dilemma is to set super-prescriptive goals. Your firm might announce, “We will boost revenue by 14.2 percent this year.” Certainly, that’s much better than just urging employees to do their best. But although numbers themselves are wiggle-proof, the way we deal with numbers isn’t. For instance, if your firm achieved a 12.3 percent increase in revenue, do you really think anyone would get fired? Or is it more likely that a compelling rationalization would smooth over the discrepancy? Team, in this economic climate, we should consider 12.3 percent a huge victory!
The danger is present in our personal lives, too. Imagine that, in hopes of reining in your alcohol consumption,