THE POWER OF HABIT: WHY WE DO WHAT WE DO IN LIFE AND BUSINESS
By Charles Duhigg
Who is Charles Duhigg?
Duhigg was one of the New York Times reporters who won the 2013 Pulitzer Prize for Explanatory Reporting for a series of 10 articles about the business practices of Apple and other technology companies. He is also the author of Smarter Faster Better: The Secrets of Being Productive in Life and Business, which was released on March 8, 2016. It became a New York Times Bestseller on March 27, 2016. Source: Wikipedia
PART ONE: THE HABITS OF INDIVIDUALS
Chapter One: The Habit Loop: How Habit Works
One of the major breakthroughs in habit formation research came through a patient Eugene, who suffered from viral encephalitis in 1994. The virus damaged his brain and resulted in memory loss, but astonishingly he had all the habits he had formed in his youth and he could remember most of the events in his life prior to 1960.
After he was discharged from the hospital, in the first few weeks, his wife Beverly took him outside each morning and afternoon, always together and along the same route. The doctors had warned her to monitor Eugene constantly. If he ever got lost, he would never be able to find his way home.
One morning Eugene slipped out the front door, but he was able to find his way home. When researchers heard about it, they suspected it didn't have to do with conscious memory. Through several experiments with Eugene, researchers were able to conclude that a new habit has emerged. There is one part of our brain called ‘basal ganglia’ that stores the process - in which the brain converts a sequence of actions into an automatic routine- known as “chunking”’ and it’s at the root of how habits form.
When a habit emerges, the brain stops fully participating in decision-making. A habit
emerges because the brain is constantly looking for ways to save effort. Habits are a three-
the cue (trigger)
Chapter Two: The Craving Brain: How to Create New Habits
In the early 1990s Claude Hopkins, who was at the top of a booming industry: advertising, turned many household products into world bestselling products including Pepsodent toothpaste, Quaker Oaks, Goodyear tires, Bissell carpet cleaner and so on by creating new habits in the consumer. His signature tactic was to find a simple and obvious cue (trigger) that would convince the consumers to use his product and clearly define the rewards.
However, it turns out that there is a third rule that must be satisfied to create habits - a rule that is so subtle that Hopkins relied upon without even knowing that it existed. Wolfram Schultz, a professor of neuroscience at the University of Cambridge, through his
experiments, found that craving is an integral part of habit; unless people crave for rewards, they won’t create any habits. That is the reason some cues work better than others.
In 1996, Procter & Gamble (P&G) developed a new product: Febreze, to eliminate cigarette and pet odor from all kinds of clothes, furniture, etc. The cue: cigarette and pet smell didn’t trigger the use of Febreze as they had expected. Hence, a group of researchers decided to visit homes where a free sample was given. They found that people who had been smoking or had pets for years have been desensitized to the smell. Therefore, it didn’t trigger the use of Febreze.
One day, they went to speak with a woman who was using Febreze every day. To their surprise, she wasn’t using for any specific smell, but as an air freshener, after she was one cleaning the house. Some of the researchers spent an evening looking through the videotapes P&G had collected of people cleaning their homes over the years. One thing was found common in all videotapes, women felt happy after the cleaning.
Upon this discovery, they decided to change the cue in their ads to ‘making a bed’, ‘cleaning a room’ and ‘vacuuming a rug’. In each one, Febreze was positioned as the reward: the nice smell (craving) that occurs at the end of cleaning. Within a year, customers had spent more than $230 million on the product, and it now accounts for more than $1 billion each year. Identifying the right cue and reward and craving for reward successfully created a new habit of using Febreze after the cleaning. Figuring out how to spark a craving makes creating a new habit easier.
Chapter Three: The Golden Rule of Habit Change: Why Transformation Occurs
For changing any habits it is important to identify what causes you to do what you do and
what rewards you crave out of it. Whether you are a smoker, overeater, alcoholic,
procrastinator, nail biter and so on, there is usually a trigger that forces you to do something and identifying those triggers is a key to changing any habits.
According to a psychologist, “Most people’s habits have occurred for so long they don't pay attention to what causes it anymore.” A twenty-four-year-old graduate student named
Mandy had bitten her nails for most of her life. When a therapist asked Mandy to describe why she bit her nails, she initially had trouble coming up with reasons. As they talked, it became clear that she bit when she was bored. Her reward for working through all the nails was a physical stimulation.
Once you understand the trigger and cravings driving your behavior, you are half-way to changing it. In the case of Mandy, her routine or behavior had to be replaced with an alternative to nail-biting that will satisfy her craving. She was told to put her hand in her pockets or grab a pencil whenever she felt a tension in her fingertips that made it impossible to put her fingers in her mouth. Then Mandy was to search for something that would provide a quick physical stimulation such as rubbing her arm or rapping her knuckles on a desk-anything that would produce a physical response. Later on, her routine was finally replaced by manicure!!!
The cues and rewards stayed the same, only the routine changes. And, replacement habits only become durable new behaviors when they are accompanied by belief. For a habit to stay changed, you need to believe change is possible.
PART TWO: THE HABITS OF SUCCESSFUL ORGANIZATIONS
Chapter Four: Keystone Habits: Which Habits Matter Most
This chapter focuses on changing keystone habits which have a trickle-down effect and create a structure for other habits to change and the power of small wins in our life. This chapter through the anecdote of Paul O’Neil, former CEO and Michael Phelps, Olympic champion helps understand how changing keystone habits and small wins start a process that, over time, transforms everything.
Aluminum Company of America or Alcoa was a profitable company since it was founded in the late 1880s. However, investor’s grumblings started when the company tried to unwisely expand into a new product line while competitors stole customers away. When the CEO tried to mandate improvements to increase profitability, fifteen thousand employees had gone on strike.
In October 1987, Paul O’Neil became the CEO of Alcoa. He knew he needed to change some keystone habits that have the power to start a chain reaction. It would have to be something that everybody - unions and executives - could agree was important. He decided to focus on worker safety and the brilliance of this approach was, which most people didn’t realize, in order to get zero injuries, they had to understand why injuries happen in the first place. And to understand why injuries happened, they had to understand why and how the manufacturing process was going wrong. And to fix the processes, they had to bring in people who could improve quality control and introduce the most efficient work processes.
In other words, to protect the worker, Alcoa became the most streamlined company in the
Chapter Five: Starbucks and the Habit of Success: When Willpower Becomes Automatic
The chapter focuses on strengthening willpower by making it into a habit. Starbucks took great advantage of willpower and focused on making willpower a habit in workers’ lives in the training curriculum.
When Starbucks plotted its massive growth strategy in the late 1990s, executives focused on cultivating an environment that justified four dollars a cup of fancy coffee and trains its employees to deliver a bit of joy alongside lattes and scones. Starbucks took advantage of several scientific experiments which proved in the 1960s that kids with self-control and discipline achieved better results in their lives and career. They spent millions of dollars in designing employee training curriculum that prepared employees to control their emotions and deal with inflection points. The intention was to turn the self-discipline into an organizational habit.
The training material spelled out routines for employees for responding to specific cues such as screaming customers, long lines at the cash register. Managers drilled employees, role-playing with them until the responses become automatic. The company identified specific rewards - a grateful customer, praise from a manager - that employees could look to as evidence of a job well done.
However, Starbucks realized that it is also important to give employees a greater sense of authority. They asked workers to redesign how espresso machines and cash registers are laid out, to decide for themselves how customers should be greeted and how merchandise should be displayed.
Chapter Six: The Power of Crises: How Leaders Create Habits Through Accident and Design
The chapter, through two anecdotes of Rhode Island Hospital medical error and King Cross underground station fire incident in London in 1987, exposes how organizational routines and truces continue forever until a crisis happens. And, how good leaders seize the opportunity to overhaul the organizational culture, as employees tend to become more receptive to change in the wake of crises.
Employees at King Cross station relied on informal truces, one of them was not to step on
anyone’s toes, the tightly prescribed chain of command that had to be followed under any circumstances. When an employee was informed about burning tissue at the bottom of one of the longest stations, he rode the escalators down to beat out the fire with a roll-up magazine and returned to his post. He didn't investigate further nor did he bother to inform anybody. Fifteen minutes later the second passenger noticed a wisp of smoke, and the third passenger after seeing smoke and glows from underneath the escalators stairs hit an emergency button and began shouting at the passenger to exit the escalator. Even then, the safety inspector did not call the fire department. Another truce was not to call the fire department until it is absolutely important and not create panic.
In a few mins, 31 were dead and more than 100 injured. 5 days after the blaze, a special investigator was appointed to study the incident. Investigator quickly discovered that everyone had known - for years - that fire safety was a serious problem, and nothing had changed. He concluded with criticism and recommendations that, essentially, suggested much of the organization was either incompetent or corrupt. A slew of new laws was passed and the culture of the Underground was overhauled. Today, every station has a manager whose primary responsibility is passenger safety, and every employee has an obligation to communicate at the smallest hint of risk.
Chapter Seven: How Target Knows What You Want Before You Do: When Companies Predict (and Manipulate) Habits
Target is the second-largest discount store retailer in the United States, behind Wal-Mart,
with annual revenue of around $70 billion and 1802 stores in 2016.
When Andrew Pole started working for Target he had to come up with an algorithm (complex mathematical formula) to figure out which customers are pregnant or new parents based on their buying patterns (predictive analysis). For companies, pregnant women are gold mines and in the US alone, the average parent spends around $7,000 on baby items before a child’s first birthday. Disney estimates the North American new baby market is worth $36.3 billion a year.
Every year millions of customers handed terabytes of information about themselves through target issued credit cards, loyalty cards, redeemed coupons they had received in the mail, etc. Most had no idea they are doing it. Target assigns a ‘Guest ID number’ to every shopper and a record of each purchase is linked to it. Also linked to that ID was demographic information, ethnicity, job history, etc.
How does Target figure out which customers are pregnant? Target had a baby shower registry that helped identify pregnant women. Pregnant women willingly handed over valuable information, like their due dates, that let the company know when to send them coupons for prenatal vitamins or diapers. Target linked that information to their family Guest ID and whenever one of those women purchased something in a store or online, Pole, using the data the women provided was able to identify buying patterns at a particular stage of pregnancy. Expectant mothers, he discovered, shopped in a fairly predictable way. Understanding the buying patterns of those women, Pole was able to find hundreds of thousands of women in their database who are likely to be pregnant that Target could inundate with advertisements for diapers, lotions, cribs, wipes, etc.
The challenge for Target is to take advantage of expectant mothers’ habits by getting their advertisements into their hands without making it appear they are spying on them. The answer was to make the advertisement look familiar and camouflaged what they knew. Target started sandwiching the diaper coupons between nonpregnancy products that made the advertisements seem anonymous, familiar and comfortable.
PART THREE: THE HABITS OF SOCIETIES
Chapter Eight: Saddleback Church and The Montgomery Bus Boycott: How Movements Happen
There are three social habits that are at the root of many movements or revolutionary
A movement starts because of the social habits of friendship and strong ties between close acquaintances
It grows because of the habits of a community, and weak ties that hold neighborhoods and clans together
And it endures because a movement’s leaders give participants new habits that create a fresh sense of identity and a feeling of ownership.
In 1955, Rosa Parks, a black and well-respected woman in the society in Montgomery, Alabama refused to give up her seat for a white passenger on the bus. She got arrested when the driver called the police for violating Montgomery’s segregation laws. But she wasn't the first black woman to be jailed for breaking the law, so how did her arrest result in boycott or protest? Since she was deeply respected and embedded within her community and was particularly well known and liked in her social networks, her connected set of friends reacted as friends would naturally respond by following the social habits of friendship and agreeing to show support.
Subsequently, her friends started spreading the word around. People who hardly knew Rosa Parks decided to participate because of social peer pressure - an influence known as “the power of weak ties”-that made it difficult to avoid joining in. Together, they drew strength from entire communities and mass protests. Their boycott of buses crippled the bus line and introduced a charismatic young leader named Martin Luther King, Jr.
King gave a new sense of purpose and ownership to crowds. His message was not war but to embrace; a plea for nonviolent activism, overwhelming love and forgiveness of their attacker, and a promise that it would bring victory. One critical factor of why the Montgomery bus boycott succeeded is because the third aspect of social habits was embedded within King’s philosophy: a set of new behaviors that converted participants from followers to self- directing leaders. In 1964, President Lyndon Johnson signed the Civil Rights Act of 1964- which outlawed all forms of segregation and as well as discrimination against minorities and women.
Chapter Nine: The Neurology of Free Will: Are we Responsible for our Habits?
Angie Bachmann, a housewife, and mother of three, after decades of marriage, felt genuinely alone. She finally thought of doing something fun and exciting and decides to go to the casino once a week. As time passed, she started hitting the casino whenever she felt bored, fought with her husband or felt underappreciated by her kids. Eventually, she was at the casino almost every day. She never realized it was a problem until it ruined hers and her family’s life.
By the summer of 2001, Bachmann’s debts to casino hit $20,000. She hired a bankruptcy attorney, cut up her cards, and wrote out a plan for a more austere, responsible life. It wasn’t even close to the end. Years later, she threw away hundreds of thousands of dollars including a $125,000 loan from the casino. The casino sued her to recover their money. Bachmann’s lawyer argued before the state’s highest court that Angie Bachmann gambled not by choice, but out of habit.
In 2010, a cognitive neuroscientist named Reza Habit conducted an experiment with twenty-two pathological gamblers and non-pathological gamblers and he found that to pathological gamblers, near misses looked like wins. But to a non-pathological gambler, a near miss was a loss. Real neurological differences impact how pathological gamblers process information. Gamblers who keep betting after near wins are what makes casinos, racetracks, and state lotteries so profitable.
When a habit gets deeply rooted in our brain, our ability to act consciously is no longer a choice. Our habits take over and our behaviors become unconscious. Once we believe we have a choice and freedom to change our habit, how a habit works and can be changed, change becomes real.
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