Everything Rory Sutherland said on any show that made the record, most notable first. Each card names its show and opens the statement there.
Management consulting gainshare agreements are a scam
“A game share agreement is a management consulting scam where you claim a certain percentage of the cost savings you identify in year one.”
Sutherland: Shareholder Value Focus Prevents Effective Innovation and Customer Investment
“The shareholder value movement's totally incoherent because over what time frame which shareholder... What are you optimizing for? It's a completely incoherent nonsense, which is very, very friendly to stock market analysts who want a ready supply of quarterly…”
Sutherland: Economics is creatively limiting by reducing motivation to bribes and fines
“The problem of economics isn't only that it's wrong, it's that it's incredibly creatively limiting, because it tends to posit a very one-dimensional view of human motivation, and therefore, if you wish to change human behavior, the only two ways you can do it …”
Sutherland: Shareholder value short-termism creates psychopathic, untrusted businesses
“And I think the problem with the shareholder value movement, by the way, and short term targets in business, is you're creating in businesses with a focus on the short term, you're creating psychopathic businesses, you're creating businesses which consumers in…”
Sutherland: AI must present options because humans require comparison to choose
“At the very least, you'll have to show them three or four or five skiing holidays from which they choose. Because we can't really choose in the absence of comparison.”
Companies should shift 20% of marketing budgets to top-tier call centers
“Probably 50% of the time I would advise to a client,
Take 10 to 20% of your marketing budget and spend it on upgrading the call center.
Pay the people too much.
Get the best practitioners.
I think it's perfectly legitimate in some organizations there should be…”
Publicly traded companies are incentivized to behave like psychopaths
“PLCs, or companies on the NASDAQ, or the, you know, stock exchange, are incentivized to behave like psychopaths, because they're optimized around short-term transactional value, not long-term relationship building.”
Sutherland: Tech-Driven Management Optimizes for Metrics Distant from Customer Needs
“When you allow tech bros too much power over decision-making, along with their running dog lackeys in kind of management consultancy, You're optimizing for something which may be very, very distant from what your real-world customers really care about.”
Marketing is fat-tailed, making hourly billing a fundamentally broken compensation model
“My argument is that marketing is actually fat-tailed. So is innovation, and R&D, pharmaceutical research, science, ok? In other words, five to 10% of what you do delivers perhaps a 110% of the value, and therefore paying people by the hour and demanding that e…”
Individuals should dedicate 50% of effort to maximizing exposure to positive optionality
“50, 50% of your effort in life, once you ensured the fact that you're not going to starve to death, die, etc., you know, you've looked after your children... Should be attempts to get lucky. In other words, what Nassim would say, I love this phrase increasing …”
Sutherland: Much Luxury Consumption Is Self-Signaling Rather than Status Display
“Quite a large part of this stuff is actually signalling to ourselves. Which is, you know because I'm worth it. I deserve this. I'm the kind of person who drives this. It provides me with a kind of ego boost, a sense of reassurance, whatever it may be.”
Buying a massive television is an economically rational decision for low-income households
“If you haven't got much money, TV as a source of long-term entertainment is spectacularly cheap. So having a really good television on which to enjoy it, because you're not going to go Porsche racing at the weekend, you know, you're not going to be there, you …”
Sutherland: Truly innovative ideas require more marketing, not less
“Big innovative new ideas don't require less marketing, they require more. Because you're asking people to, at the initial stages, you're asking someone to do something that nobody else has done, and you're asking them to do something they haven't done before.”
Tech competitors battle on specs until someone builds a UI that wins
“The lesson of all tech is that loads and loads of geeks compete through, for technological numerical superiority by some measure or other, And then someone else comes along with a cute user interface and makes all the money. It's basically Steve Jobs. Yeah. No…”
Sutherland: Engineers dislike marketing because consumers prioritize human design over technical metrics
“And so their failure to understand the wider context within which they were operating, which is the job of marketing, Is exactly the reason nerds hate marketing, because they think in a perfect world, nerd metrics win out. But the consumer is much more bothere…”
Sutherland: Apple made a mistake by cancelling its urban electric car project
“I lost faith in Apple when they cancelled the car. Because I thought you, they had the brand power to create, for places like New York and London, a form of microtransport, which was really, really cool, really, really efficient.”
Changing human psychology solves problems much cheaper than changing underlying technology
“Do not define an objective which is designed to serve human beings without considering psychological factors, because you might be able to solve your problem very, very cheaply and efficiently by changing the psychology, not by changing the technology.”
Sutherland: Businesses mistakenly promote leaders using artificial linear test models
“If you look at real life, I business decisions, which anything that involves human behavior, it's simply, you know, all those conditions that we are expected to look for in something when we call it scientific, none of those conditions are met, you know, singl…”
Sutherland: Rigid corporate metrics distort behavior and demotivate employees
“The metrics often actually get gained or they lead to a complete distortion of behavior. The second thing with metrics is that either people gain them to their own advantage or they obey them, but find them stupid. But the loss of autonomy that results when yo…”
Sutherland: Heat pump adoption is driven primarily by seeing three neighbors install them
“The single thing that would persuade people to have more heat pumps is if three people on their street had a heat pump.”
Sutherland: Google Glass failed by seeding early units only to developers
“Google Glass, I mean, it was kind of marketing cock up. They launched a bit too soon. Then they only gave the bloody glasses to developers. Now, with the best will of the world, developers probably aren't the world's like coolest people. Okay. They're not the …”
Sutherland: Tech adoption slows because eccentric early adopters fail to provide social proof
“Actually there's a problem with all tech products because the first people to adopt innovative products tend to be slightly weird. Okay. And weird people do not confer the reassurance of kind of social norms in the way that adoption by conventional people does…”
Sutherland: Early tech adoption is driven by status display that subsidizes immature innovations
“Actually the reason most people adopt new technology is peacock's tail. It's showing off. The first cars weren't as good as horses and carts. They were done to show off. They were done for novelty seeking reasons or for reasons of status display. And that's wh…”
Sutherland: Short-term metrics grotesquely undervalue the business contribution of advertising
“Attempts to evaluate advertising on short term transactional metrics will always grotesquely undervalue
The contribution of that activity to your ultimate business success.”