The Upside of Irrationality By: Dan Ariely

The Unexpected Benefits of Defying Logic at Work and at Home
How I consumed the book: Audible
Short Recap: Dan Ariely has become one of my favorite authors because of his unique take on common things and his ability to turn what you think you know on its head. Simply, this book is about understanding that what we believe to be common knowledge is often common error. As humans we have a pretty poor understanding of ourselves and of what drives us. You would think that we would know best but time and time again, studies and history prove that we don’t.
We underestimate how much we tend to take ownership over a concept or creation even when we were only a limited part of that creation. Take Betty Crocker cake mix, which when it was initially introduced was a huge flop. The makers knew from their research that people loved the idea of an easier to make cake, but the problem was they made it too easy. The cake “maker” didn’t have an opportunity to feel invested. So, they changed the process and required the customer to crack the eggs and add milk and presto they had a winner.
Today we see the same effect with Ikea, and even though it isn’t the highest quality furniture many people feel a connection with that coffee table, bed or nightstand more so than other furniture. Why is that? Because they were invested in “building it” themselves. Now, the irrationality comes into play because people don’t realize or admit that they are more invested.
Application to Business: Some of the greatest managers help subordinates to come up with ideas on their own by steering them toward it, because when its their own idea they become fully invested. If you ask that subordinate if they would feel stronger about the same idea because it was there, they will inevitably not agree but that’s not the only common thing employees are wrong about. Many employees love the idea of large, huge, game changing bonuses but the facts such as the financial crisis show that large bonuses don’t work.
Studies in India show that performing simple tasks becomes more difficult when a large sum of money is on the line. So next time you make a demand consider if that demand is going to bring you more joy or more success.
Application to Life: The author teaches some great lessons for life, like understanding that we can adapt to some amazing circumstances. Consider when you buy a new TV and how excited and proud you are. Then think about 3 months or 6 months later and if you were equally excited. We become accustomed to our environment, which is why difficult circumstance improve and amazing situations seem to be less amazing over time. This is important to keep in mind when you make a decision, because they way we envision things today is not how they are likely to feel in the moment or after the moment.

Recommendation: Absolutely Worth the Read


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