I saw a TV advert recently that I believe is going to be a complete marketing failure. A campaign that is not going to make one ounce of difference in getting people to buy that product. Why? The power of social norms.
As mentioned in a previous blog post, people are highly sensitive to social norms – information about what other people are doing and what they approve of. We look for cues to how we should behave, what we should and shouldn’t do, and what we should buy through looking at what other people do.
Westpac Bank recently launched a campaign using statistics of how few people had the appropriate insurance and superannuation cover to get people to buy more of these products. Here is an example of one of the adverts.
When I first saw this, my initial thought was; “Well 95% of the population don’t have it, and they seem to be doing just fine. Why would I need more insurance?“. I hadn’t heard or read anywhere of a growing number of horror stories of families becoming destitute and homeless due to not having “adequate” insurance. It wasn’t in the paper, on the TV news or being discussed by politicians.
If not having enough insurance was OK for 95% of Australians, then it was certainly OK for me.
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We have been helping organisations transform their strategies into concrete and memorable narratives for quite a few years now. In every organisation we’ve worked with – no exceptions – there have been powerful stories already circulating in the organisation that run counter to the new strategy. In most cases, these stories have been strong enough to significantly undermine the extent to which the strategy will be believed and acted on. These anti-stories need to be identified and tackled.
We’ve noticed a few patterns; about the nature of these ‘anti-stories’ and what seems to work in tackling them. Kevin and I have attempted to capture what we have learned about tackling anti-stories in a new article that you can access here
We love to hear about any anti-stories in your organisation and if you tackled them, how did you do it and what happened?
It’s quite possible you’ll lose your job as CEO if you are unable to persuasively communicate your company’s strategy. Léo Apotheker, the recently fired CEO of Hewlett-Packard, has just learned this lesson.
Mr Apotheker was appointed CEO of HP in October 2010 less then a year before he was let go. Before HP, Apotheker was CEO of SAP at the end of a 20 year career with the German software giant. He left SAP under a cloud and in a memo SAP issued to its employees on his departure he said, “My communication towards you was not always optimal.” This should have rung some alarm bells. 1
After about 5 months in the job (March 2011) Mr Apotheker announced the company strategy. They were going to expand into the cloud business, build out its software business, open up an app store and reinvest in R&D. The aim was to lift profit margins. They would move into business analytics. He promised to take a conservative approach suggesting there wouldn’t be the massive company purchases like the Compaq or EDS buy outs HP had done in the past. 2
In August 2011 Mr Apotheker announces that HP will purchase British software company Autonomy for just over $10 billion and that he is considering selling the PC business.
In September 2011 Mr Apotheker is replaced with eBay’s celebrity CEO Meg Whitman. The HP stock price during Mr Apotheker reign falls from $46 to $25.
Of course this is a high level telling of a CEO’s demise which has many more twists and turns including the fanfare announcement of a new tablet to rival the iPad that was eventually withdrawn from sale only weeks after its launch. The important points to note in terms of communicating a strategy are these:
- Massive changes in mind are going to hurt you. Mr Apotheker suggested they weren’t going on a spending spree then announces its third biggest purchase. Our Prime Minister in Australia, Julia Gillard, is suffering a similar fate. On election she promised not to introduce a tax on carbon. As of last week the Parliament has voted in a tax on Carbon (something I support by the way) and she has been crucified for it.
- A good strategy means something is going to change. That means there will be people who are strong supporters of the old way of doing things. The misunderstood Machiavelli put it this way, “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” Telling everyone you might sell your PC business only creates uncertainty. IBM pursued the same strategy of selling their PC business to the Chinese company Lenovo. IBM, however, sold the PC division before announcing it to the world. Sometimes its better to rip the band-aid off quickly.
The effectiveness of HP strategic story Mr Apotheker told (and there was a good chance he didn’t actually tell a story) comes from not just what’s in the story, its believability and novelty, but also how it is told and whether it becomes a story worth listening to, remembering, retelling and acting upon. Add to this the importance of consistency. From all accounts Mr Apotheker failed at each step. Now let’s see how Meg Whitman fairs.
I am very pleased to announce that I will be running one of our world renowned ‘Storytelling for Business Leaders’ workshops in Wellington, New Zealand on the 1st February, 2012
I am very much looking forward to coming ‘home’ to New Zealand and passing on some of the skills and knowledge I have picked up around the use of story in business over the last decade in the UK and now with Anecdote in Australia.
To read more about the course and to make use of our ‘Super Early Bird’ rates please go here.
People are highly sensitive to social norms – information about what other people are doing and what they approve of. You can use the concept of social norms to help drive and create change.
While researching the drinking habits of American college students, H. Wesley Perkins and Alan Berkowitz discovered that most students thought that the norms for both the frequency and the amount of drinking among their peers were higher than they actually were. In other words, they thought that everyone else was drinking way more than they were, which meant they ended up drinking more themselves.
The story they were telling themselves whenever excessive alcohol consumption came up was: “That’s not me. Everyone is drinking way more than me.” The social-norms approach aims to correct misperceptions like this.
A good example of how such a belief has been challenged comes from Georgetown University. In 2009, Georgetown launched its “You Don’t Know Jack” campaign, featuring the university’s beloved bulldog mascot. Posters went up that each featured a relatively unknown, fun fact about Jack, accompanied by a statistic concerning the drinking habits of ‘Hoyas‘, the collective name for supporters of the various Georgetown University athletic teams.
Other stats included:
- 98% of Hoyas walk friends home to make sure they get home safe.
- 87% of Hoyas eat before and/or during drinking.
- 88% of Hoyas eat before and during drinkingInterventions such as this have helped to significantly reduce the incidence of alcohol abuse at American universities.
Other examples include
- Increasing tax payments in the UK. HMRC changed letters to explain that most people in their local area had already paid their taxes. This very simple intervention boosted repayment rates by around 15 percentage points.
- Reducing tobacco usage amongst youth. Schools in Montana in 2000 ran a campaign called “Most of Us Are Tobacco Free”. It targeted youth between the ages of 12 and 17 years with the message that 70% of people don’t smoke. Post-test data revealed that only 10% of teens in the campaign area reported first time cigarette use as compared to 17% of teens in a control sample, representing a 41% difference. This campaign was also launched in Texas to achieve the same result.
- Reducing home power usage. Instead of showing you a plain power bill, OPOWER, a software company that promotes home energy efficiency, uses the one below, one that compares your energy use to that of your neighbours. Such exposure causes 60 to 80 percent of people to change their energy behaviours, the company says.
- Shawn has even blogged about how they used the concept of social norms at his local basketball club to increase the payment of membershop fees..
- Social norms are therefore another change strategy you have at your disposal – a very powerful one. How could you use it for your next change initiative?