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Self-belief is a magic wand

It was the end of a gruelling eight hour workshop. The aim of the workshop was to determine a pricing strategy for a product with declining sales. The workshop attendees were divided into two camps, one believing that the future of the ailing product was a lower price and an aggressive sales campaign and the other arguing that the product should be targeted at specific segments with a premium price. The group in favour of premium prices won the day and a relaunch campaign was devised. It proved to be extremely successful.

Although the workshop took place many years ago, I have always harboured the thought as to whether a low-priced aggressive campaign would have been just as successful. According to the Harvard psychologist, Bob Rosenthal, both schemes could have worked. Everything depends on belief. Rosenthal reflects on an experiment he carried out with rats in a maze. He told his assistants that one group of rats was of superior intelligence and another group was of average intelligence. He asked the assistants to find out which group of rats would be quickest finding the exit to the maze.

The assistants ran the research programme and found that the clever rats won. It was then that Rosenthal disclosed that there was no difference between the intelligence of the rats. In fact, the experiment was focused on the research assistants who had the belief that the supposed intelligent rats would be victorious. It was confirmation of mind over matter or something that Rosenthal called the Pygmalion effect - you let someone think they can achieve success and lo and behold, they do.

What, you might ask, has this got to do with frameworks? It has a whole lot to do with frameworks because very often we are unsure which framework is relevant to a business situation. In the example I used at the beginning of this blog the framework had two opposing routes. There usually are more than one way to deal with a problem - should we use the behavioural “nudge” model or should we go for the “customer activity cycle”? Prof Rosenthal argues that it doesn’t matter which you choose as long as you truly believe in it. This conviction will result in a self-fulfilling prophecy of success.

This all makes sense – at least to a point. We know that placebos can have a positive result even though they make no physical contribution to recovery. Mind can often be much stronger than matter. However, we should apply some caution. Not everything is going to work just because we clap our hands, jump up and down, and say that it will. It is why it is so important in almost every framework to have measurement, control and readjustment built into the scheme. If the framework isn’t working because it is the wrong choice, or something has changed, we need to know as quickly as possible in order that a re-adjustment can be made. It is why track and trace is so critical in the government’s plan to overcome coronavirus.

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