Simon Sinek with Arthur Brooks: Leading with Purpose

Our country is facing a crisis of moral leadership. From political polarization to falling private-sector dynamism, a lack of inspirational leadership is slowing our progress and making it more difficult to lift up the vulnerable. Bestselling authors Simon Sinek, TED Celebrity and Optimist, and Arthur Brooks, president of the American Enterprise Institute, are among the country’s foremost leadership experts. Together, they will share the advice they offer leading policymakers and executives, and explain why uncovering our “why” is the key to greater effectiveness and personal happiness.

 

now my name is Joni I’m thinking about
your comment or your wife’s comment at
least we know he he’s not cheating there
statistics data shows us the 70% of
students are cheating now parents are
cheating they’re writing their papers
they’re editing their papers so much for
that parents are saying we we finished
our applications we did this we did that
this issue of integrity I think which
cuts through the why yeah how do you
apply the golden to issues
so for example if you’re running an
organization or I run a school and I see
integrity as a driving issue yeah that
impacts everything that this school is
doing and the leaders are not yeah
facing this how do you apply this to
issues yeah you want to take a crack
well I want to hear what you have to say
but I think it’s actually worth pointing
out that every single one of us can be
more honest give me more every single
one of us shades the truth all the time
and there are lots of reasons to do it
one of these to protect ourselves from
harm one of the reasons that we do it is
to get ahead and what it’s just to say
to protect your reputation and sometimes
is to protect other’s feelings those are
like kind of the three canonical reasons
for shading the truth right there’s a
lot of research on lying actually and
lying is common and is becoming more
common and particularly among young
people that we find the interesting and
the alarming thing as they tend to
justify lying as if they were protecting
others when in point of fact they are
protecting themselves so well here’s
what I recommended to all of us we’re
talking about cheating but thinking
about any dishonesty thinking about
something where you’re bending the rules
when you’ve done that why did you do
that and be honest with yourself even
before you’re honest with others never
shade the truth to protect yourself and
now here’s the gist goal go an hour
without doing it and then go a whole day
without doing it and you’re gonna pay a
cost by the way you’re gonna pay a cost
when somebody asks you a difficult
question and you don’t want to give the
answer and you pretend that you’re
protecting somebody’s feelings but
you’re actually trying to protect
yourself and your own reputation but the
dividends are huge with respect to your
own integrity because the smart person
who is more integrated is happier is
more joyful has clearer vision Simon
Simon what do you think of my answer so
it’s more about integrity
it goes to finite an infinite right
which is which is I’m playing by finite
rules my kid has to get into this school
my kid has to get this job my kid has to
get this my kid has to get that and I’ll
do whatever it takes to get them there
and that’s their playing by a plank
they’re living life and manage worse
they’re managing their kids lives based
on the finite rules and the problem is
there is no winning exactly and and that
we have this twisted concept in how
we’re managing our lives and helping our
kids in terms of wins and losses the
short term it’s the short term and and
and we said it’s pervasive it’s been
building and building since the 80s and
90s is pervasive to the point now it’s
affecting parenting exactly so so so so
bye so if somebody learns leadership at
work right and I did we I’m actually not
a business guy but but like during the
Great Depression the unemployment rate
was 25% during the last recession it was
9 or 10 right good stable unemployment
is 4 4 so what I hear is even when 25
percent I don’t have jobs 75 percent do
so if you want to get two people get
them at work and it’s too hard to go to
everybody’s home and say let’s learn
leadership but if I can get companies to
teach leadership lots of people who work
in companies are parents and you learn
skills like conflict resolution you
weren’t you learn things like effective
communication you learn things like
effective confrontation
these are all skills that are parenting
skills so the belief is that if we build
leaders in the most efficient way
possible which is at work they become
better parents that’s the belief we’re
not teaching leadership at all there’s a
book that just came out called the end
of loyalty where companies are no longer
loyal to people and people are no longer
loyal to companies everything is about
short term short term short term and
unfortunately that mentality now
pervades parenting so we have to do the
hard work we’ve probably lost a
generation but we have to do the hard
work of going back to what
– to be a parent which doesn’t mean
necessarily helping your kid get the job
at any expense or get into the school at
any cost we’ve run out of our formal
time but she’s gonna be outside is
actually yeah because your babysitter is
has to leave we go a little but we can’t
tell you what we’re gonna do we’re going
to retire to the festival but I want to
do one thing before we do I want to sum
up I want to sum up three big lessons
that we’ve learned here from talking to
Simon okay number one lesson number one

Consumers Are Becoming Wise to Your Nudge

“Only 2 rooms left? They don’t expect me to believe that do they? You see that everywhere.”

I leave with a wry smile. The client won’t be happy, but at least the project findings are becoming clear. Companies in certain sectors use the same behavioral interventions repeatedly. Hotel booking websites are one example. Their sustained, repetitive use of scarcity (e.g., “Only two rooms left!”) and social proof (“16 other people viewed this room”) messaging is apparent even to a casual browser.

For Chris the implication was clear: this “scarcity” was just a sales ploy, not to be taken seriously.

My colleagues and I at Trinity McQueen, an insight consultancy, wondered, was Chris’s reaction exceptional, or would the general public spot a pattern in the way that marketers are using behavioral interventions to influence their behavior? Are scarcity and social proof messages so overused in travel websites that the average person does not believe them? Do they undermine brand trust?

The broader question, one essential to both academics and practitioners, is how a world saturated with behavioral interventions might no longer resemble the one in which those interventions were first studied. Are we aiming at a moving target?

.. We started by asking participants to consider a hypothetical scenario: using a hotel booking website to find a room to stay in the following week. We then showed a series of nine real-world scarcity and social proof claims made by an unnamed hotel booking website.

Two thirds of the British public (65 percent) interpreted examples of scarcity and social proof claims used by hotel booking websites as sales pressure. Half said they were likely to distrust the company as a result of seeing them (49 percent). Just one in six (16 percent) said they believed the claims. 

The results surprised us. We had expected there to be cynicism among a subgroup—perhaps people who booked hotels regularly, for example. The verbatim commentary from participants showed people see scarcity and social proof claims frequently online, most commonly in the travel, retail, and fashion sectors. They questioned truth of these ads, but were resigned to their use:

“It’s what I’ve seen often on hotel websites—it’s what they do to tempt you.”

“Have seen many websites do this kind of thing so don’t really feel differently when I do see it.”

In a follow up question, a third (34 percent) expressed a negative emotional reaction to these messages, choosing words like contempt and disgust from a precoded list. Crucially, this was because they ascribed bad intentions to the website. The messages were, in their view, designed to induce anxiety:

 “… almost certainly fake to try and panic you into buying without thinking.”

“I think this type of thing is to pressure you into booking for fear of losing out and not necessarily true.”

For these people, not only are these behavioral interventions not working but they’re having the reverse effect. We hypothesize psychological reactance is at play: people kick back when they feel they are being coerced. Several measures in our study support this. A large minority (40 percent) of the British public agreed that that“when someone forces me to do something, I feel like doing the opposite.” This is even more pronounced in the commercial domain: seven in ten agreed that “when I see a big company dominating a market I want to use a competitor.” Perhaps we Brits are a cynical bunch, but any behavioral intervention can backfire if people think it is a cynical ploy.

Heuristics are dynamic, not static

Stepping back from hotel booking websites, this is a reminder that heuristics are not fixed, unchanging. The context for any behavioral intervention is dynamic, operating in “a coadapting loop between mind and world.” Repeated exposure to any tactic over time educates you about its likely veracity in that context. Certain tactics (e.g., scarcity claims) in certain situations (e.g., in hotel booking websites) have been overused. Our evidence suggests their power is now diminished in these contexts.

Two questions for the future

In our study, we focused on a narrow commercial domain. It would be unwise to make blanket generalizations about the efficacy of all behavioral interventions based on this evidence alone. And yet nagging doubts remain.

#1: Like antibiotic resistance, could overuse in one domain undermine the effectiveness of interventions for everyone?

If so, the toolkit of interventions could conceivably shrink over time as commercial practitioners overuse interventions to meet their short-term goals. Most would agree that interventions used to boost prosocial behavior in sectors such as healthcare have much more consequential outcomes. In time, prosocial practitioners may be less able to rely on the most heavily used tactics from the commercial domains such as social proof and scarcity messaging.

#2 : How will the growing backlash against big tech and “surveillance capitalism” affect behavioral science?

Much of the feedback from the public relates to behavioral interventions they have seen online, not offline. Many of the strategies for which big tech companies are critiqued center on the undermining of a user’s self-determination. The public may conflate the activities of these seemingly ubiquitous companies (gathering customer data in order to predict and control behavior) with those of the behavioral science community. If so, practitioners might find themselves under much greater scrutiny.

Feedback loops matter

There probably was never an era when simple behavioral interventions gave easy rewards. Human behavior—context-dependent, and driven by a multitude of interacting influences—will remain gloriously unpredictable.

Marketers should design nudges with more than the transaction in mind, not only because it is ethical or because they will be more effective over time but also because they bear responsibility toward the practitioner community as a whole.

The lesson I take from our study? Feedback loops affect the efficacy of behavioral interventions more than we realize. Just because an intervention was successful five years ago does not mean it will be successful today. Practitioners should pay as much attention to the ecosystem their interventions operate in as their customers do. There’s no better place to start than spending time with them—talking, observing, and empathizing.

We should also consider our responsibilities as we use behavioral interventions. Marketers should design nudges with more than the transaction in mind, not only because it is ethical or because they will be more effective over time but also because they bear responsibility toward the practitioner community as a whole. We owe an allegiance to the public, but also to each other.

Trump’s Trade Levers Test Long-Term U.S. Alliances

President’s threats against Mexico and others can work in the short run, but global rules could be strained

President Trump’s threat to hit Mexico with tariffs over immigration is the latest and most dramatic step in the weaponization of international economic levers.

In the short run, these moves may serve the U.S. interest. But in the long run, they could do the opposite, by emboldening everyone to ignore international conventions and rules that reserved tariffs and sanctions for specific purposes. The U.S. may also find its “soft power,” the ability to get other countries to cooperate out of shared mutual interest rather than threat, diminished.

Mr. Trump is not the first president to use trade levers to achieve unrelated goals. Congress has granted the president authority to do so in successive statutes, starting with the Trading with the Enemy Act of 1917. These laws enabled Presidents Roosevelt to declare a bank holiday in 1933, Nixon to impose a 10% tariff on foreign imports and Reagan to sanction Nicaragua.

But Mr. Trump’s trade maneuvers have been different in several ways. First, the extent is unprecedented: Last year, he used national-security justifications to impose tariffs on steel and aluminum imports, even from allies, and is threatening the same with autos. He then doubled tariffs on Turkish steel to force that country to release an American pastor. He has imposed new sanctions that would severely penalize any foreign or U.S. company that does business with Iran. A new order barring U.S. companies from doing business with China’s Huawei Technologies Co. because it could be a conduit for spying is ensnaring foreign companies as well.

“There’s nobody like this in the last century,” said Gary Hufbauer, a trade expert at the Peterson Institute for International Economics.

Second, the president has used these powers to achieve narrow goals with little connection to the economic imbalances or national-security threats for which they were intended. In 1985, Mr. Reagan imposed sanctions on Nicaragua using the International Emergency Economic Powers Act of 1977, the same authority Mr. Trump invoked for his tariffs on Mexico. But the U.S. regarded Nicaragua as a hostile client-state of the Soviet Union. Similarly, Mr. Reagan imposed sanctions on construction of a natural-gas pipeline from the Soviet Union to Western Europe for fear it would make American allies vulnerable to Soviet economic blackmail.

Mr. Trump’s actions don’t flow from an overarching geostrategic vision: His tariffs on imports of steel, aluminum and, potentially, autos are designed primarily to shore up favored domestic industries. His threat toward Mexico came because he says it hasn’t done enough to stem the flow of Central American asylum seekers traveling north to the U.S. border. And while his tariffs on China and his sanctions on Huawei superficially resemble Mr. Reagan’s efforts to contain the Soviet Union, Mr. Trump’s calculus is more transactional. He has suggested, for example, that the case against Huawei, which U.S. officials say is motivated by national security, might be dropped as part of a trade deal.

In the near term, these tactics can work. His assumption that other countries will prioritize retaining access to the U.S. market has generally proved correct. Mexico has so far been restrained in responding to his tariff threat. Though U.S. allies haven’t joined its sanctions on Iran—designed to halt all its nuclear activity and support for Syria’s government and groups the U.S. considers terrorists—the threat of American penalties has dissuaded their companies from resuming business there. As a result, Iran’s economy is cratering. Similarly, several Western European companies have suspended business with Huawei even as their governments don’t view it as the threat the U.S. does.

Yet in the long term, these actions, with other trends, likely will weaken ties between the U.S. and its allies and the security and leverage all derive from acting together.

The Pew Research Center has found a growing share of Republican voters, like Mr. Trump, are skeptical that openness to the world or deference to allies serve U.S. interests. And many countries are moving in a similar direction. Nationalists now govern India, Israel, Brazil, the Philippines, Poland, Hungary and Italy, and Chinese President Xi Jinping espouses a more bellicose, China-first agenda than his predecessors. Because they define national interest in the same transactional terms as Mr. Trump, they are more likely to defy the U.S. if it suits their immediate needs. The Philippines, for example, has courted Chinese investment, and Italy has welcomed Huawei. Despite Mr. Trump’s personal fondness for Indian Prime Minister Narendra Modi, India has sought to circumvent the U.S. crackdown on trade with Iran, while the U.S., unhappy with Indian protectionism, has withdrawn tariff preferences from India.

Even countries still ideologically allied with the U.S. will question the value of doing deals if, as with Mexico, they fail to prevent unilateral punishment for nontrade matters.

“As Trump shreds international trust in the U.S., friendly countries have to start preparing Plan Bs: alternatives to relying on America,” said Robert Zoellick, the U.S. trade representative under George W. Bush and later World Bank president. “This shift won’t occur overnight, but the erosion is increasing rapidly, and the negative dynamic weakens U.S. influence.”

The Iran sanctions are an early sign of this diminished leverage. Other countries, tired of how the U.S. uses the dollar’s role in global payments to enforce unilateral sanctions, are devising workarounds. The U.K., Germany and France are building an alternative payments system for dealing with Iran, which has meanwhile begun expanding its stockpile of enriched uranium.

The political trends weakening U.S. leverage with the world are compounded by economic trends. Since 1985, the U.S. share of global gross domestic product has shrunk to 24% from 35%, while China’s has grown to 16% from 3%. This means other countries have less to gain by cooperating with the U.S. and more to lose from antagonizing China.

If U.S. tariffs, real and threatened, shrink trade and investment flows, that would further diminish economic incentives to cooperate, while also weakening the constituencies in other countries favoring openness and integration with the U.S.

But that argument can’t be applied to other countries targeted by Mr. Trump. Aaron Tornell, a Mexican-born economist at the University of California, Los Angeles, noted that since the 1980s, Mexico has turned away from left-wing isolationism toward liberalized markets and closer cooperation with the U.S. on trade and security issues such as narcotics. Advocates in Mexico of this integration argued American presidents and big business would prevent the U.S. from using its enhanced leverage to punish Mexico.

Mr. Trump’s policies could “destroy the political foundations of a country that has been following liberal economic policies for the last 30 years and give more power to those who want to be like Venezuela,” Mr. Tornell said.