The notion that success is a simple matter of following routine and sticking to good habits isn’t exactly new. But in his just-released book, The Power of Habit: Why We Do What We Do in Life and Business, Charles Duhigg explains why. An investigative reporter at the New York Times who also has an MBA, Duhigg taps into insights from biology, sports, consumer products marketing and manufacturing.
How do people kick smoking? How did Procter & Gamble turn Febreze into an also-ran into a big seller? How did Tony Dungy turn his National Football League defenses into champions? How did Paul O’Neill (the executive, not the baseball player) succeed at Alcoa? It all comes down to understanding the power of habits, Duhigg argues. “In the last ten years, our understanding of how habits work has been totally transformed, and companies take advantage of that,” he said.
People, like animals studied by scientists in laboratories, tend to see a feedback loop in their behavior. They are cued or prompted to act in a certain way, respond with a routine behavior, and then receive a reward for the behavior. “If you identify the cues and rewards, you can change the routine,” Duhigg writes.
When it was brought to the market, the deodorizer Febreze didn’t catch on. It was originally pitched to people who owned cats, or smoked — i.e. who had bad smells in their lives or houses. But those people tend to ignore the smells. But when Procter & Gamble watched people cleaning their homes, they noticed that people would sigh with satisfaction after completing a cleaning task. “They figured out this was a habit they could piggy back on,” Duhigg said. So instead, Procter & Gamble added a perfume to the spray and pitched it as a product that would be sprayed as a reward after a cleaning habit, so that it made things smell as good as they looked.
By the same token, the company that owned Pepsodent turned toothpaste into a household product by creating a reward — a tingling sensation on your teeth and gums — for the habit of toothbrushing.
In the literature of business success, there’s a lot of focus on instinct and gut. The memoir of longtime General Electric CEO Jack Welch was entitled Jack: Straight from the Gut. And whether it was Google or McDonald’s, tales of entrepreneurial success tend to focus on the stroke of insight, or a Eureka moment — not the force of habit. Which lead me to wonder whether the focus on habits isn’t something that has more applications in making established enterprises run better — rather than in creating new ones. “A lot of the book talks about how to change organizational habits,” said Duhigg. But even when you talk to people who have built companies from scratch, he continued, they talk about the need to instill habits. “That means you have to think about the cues and rewards and program them correctly.”
At times, the important habits described in this sharp, eclectic and engaging book don’t seem to have much to do with the core operations and mission of the business. When Paul O’Neill took over the giant aluminum company Alcoa in 1897, he obsessed over worker safety. “He knew that worker safety was a keystone habit for this organization. He could set off a chain reaction of other changes by focusing on worker safety habit.” And within two years, it was one of the top performers in the Dow Jones Industrial Average.
There’s plenty more. Duhigg believe habit explains how swimmer Michael Phelps managed to win an Olympic race even though his goggles were filled with water. And he describes how Target crunches data on purchasing habits to determine, for example, whether female customers are pregnant — and then uses that knowledge to pitch them maternity products. But he argues that simple repetition of actions alone doesn’t guarantee success. People and organizations have to believe that the changing routines matter and produce results, and habits and routines really gain their power when they spread through social networks.
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Daniel Gross is economics editor at Yahoo! Finance
The Power of Habit: Author Explains Why We Do The Things We Do
Daily Ticker – Thu, Mar 8, 2012 11:05 AM EST http://finance.yahoo.com/blogs/daily-ticker/power-habit-author-explains-why-things-160513667.html