When it comes to persuasion, Cialdini has literally written the book. He has backed up his writing with years of research.
Here are his six universal rules of persuasion:
1. Reciprocity. People feel obligated to return favors performed for them.
2. Authority. People look to experts to show them the way.
3. Scarcity. The less available the resource, the more people want it.
4. Liking. The more that people like others, the more they want to say yes to them.
5. Consistency. People want to act consistently with their values.
6. Social Proof. People look to what others do in order to guide their own behavior.
Source: Financial Times
From The Economist, Schumpeter column, September 5, 2014:
Senior managers will have to rethink their roles dramatically if they are not to become latter-day Luddites. They will have to hand some of their functions to intelligent machines, which will always be better at data analysis than humans, and some to the heads of business units, who will be in a better position to make use of the crunched data. Executives will increasingly focus on the two things that humans can still do better than machines—motivating the troops and producing game-changing thoughts. Mr McAfee says, “I’ve never seen a piece of technology that could negotiate effectively. Or motivate and lead a team.” Tom Peters, a veteran American management guru, reckons the best leaders of the future will spend half their time reading books.
Our lawn sprinklers are getting a free ride.
Omaha has undertaken a massive sewer separation project mandated by the federal government. It will cost more than $1 billion. The means of paying for this project is fundamentally flawed: The new sewer system is paid for by increasing sewer rates by more than 50%.
There is a huge problem with this formula: When you increase the price of something, you reduce demand. By effectively raising the price of water consumption, the City has created a cycle of reduced demand that will ultimately result in a need for continually higher rates to keep up with diminishing volume as people buy low-flow shower heads, stop running the water while they brush their teeth, take shorter showers, etc., etc.
Look for the rise in rates to rise past all previous forecasts as consumption declines.
So here’s my advice for the day: As a commercial property owner, we have the ability to split our water meters in to several units. One of these meters is usually dedicated to a lawn sprinkler system. Why do property owners split the lawn sprinkler onto its independent meter? There are no sewer fees charged to these meters, only water fees. The theory is that lawn sprinklers do not use the sewer system and, therefore, should be exempt.
Anyone who has driven through a deserted office park after business hours will easily see that this is a fallacy. Water overflows the curbs at nearly every perimeter location. This water heads immediately towards its favorite sewer inlet.
Here’s my proposal (and it will directly hurt my pocket book): All sprinkler meters should be required to pay a sewer fee that is somewhere between 25% to 50% of the standard water meter.
Sure, it will reduce demand. But it will more honestly price how lawn irrigation water is used.
“People chronically misappraise the limits of their own knowledge; that’s one of the most basic parts of human nature. Knowing the edge of your circle of competence is one of the most difficult things for a human being to do. Knowing what you don’t know is much more useful in life and business than being brilliant”
“It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.”
He says he sees nothing worth investing in right now and hasn’t bought an investment in his personal accounts in at least two years. He is waiting for an irresistible bargain.
From Saturday’s Wall Street Journal (9/13/14)