Barbara St. Clair

To think, only a few months ago it was summer.  It is weird how time stretches and collapses, isn’t it? Or maybe not so much…

One hundred years ago, in 1915, Albert Einstein published his theory (since tested and supported by evidence) that time is in fact relative. And, that depending on where we stand (relative to other bodies in the universe) the passing of time may change, going faster relative to time on Earth, for someone outside of Earth’s gravity and slower for someone right here, where with the exception of a few astronauts, all of us are.

Given the fluid nature of time in reality and in our experience, it seems both surprising and not that it was only 8 years ago (January, 2007) when Steve Jobs took to the MacWorld Stage to, as he said at the time, “make some history together.” He told the audience Apple would be introducing “three revolutionary products…a widescreen iPad with touch controls…a revolutionary mobile phone…and a breakthrough Internet communications device,” (and then he dropped the bomb) in one single product. And like the magical Birth of Venus in Botticelli’s painting, the iPhone arrived to change our lives.

Three years later the world’s first smart phone was followed by the 2010 launch of the iPad and by 2011 it had 15 million users. To put that all in perspective, at eight years old the iPhone is the equivalent of a second grader and the iPad is a kindergartner!

In 2011, the same year the iPad reached critical mass, Daniel Kahneman published a book called Thinking Fast and Slow, which looks at the way people think and how they make choices.

The Influence of Short Cuts in Thinking

Kahneman, the only psychologist to win a Nobel Prize in Economics, has an interest in human irrationality. One of his important insights is how easily influenced people are by pre-conceived notions. We might think that is obvious, but in Thinking Fast and Slow, Kahneman demonstrates that even our sense of common sense, and our confidence in what we know are on shaky ground. Our thought processes and decision-making are influenced by short cuts in thinking (what he labels heuristics) that we are not even aware of.

So for example, in one of his experiments he asked one group of participants if they would opt for surgery if the survival rate was 90% and asked the other if they would opt for surgery if the mortality rate was 10%. Although the probability outcomes were exactly the same for both situations, many more people said “yes” to the surgery when it was framed in terms of a likely positive outcome than a negative one.

Bias in How We Categorize Information

Another of Kahneman’s insights, is quite related to what he identifies as our tendency to quickly and “efficiently” categorize information and experience without examining it much (heuristics, again), along with our inherent biases leads to thinking that is not always (or perhaps rarely) rational.

Kahneman has a number of great examples of this. My favorite has to do with why most people give a wrong answer to a word problem, “A bat and ball costs $1.10. The bat cost one dollar more than the ball. How much does the ball cost? “ If you answered 10 cents you are in the majority but despite how obvious (and satisfying) that answer is, it is wrong. The correct answer is 5 cents. If you put pencil to paper you can figure it out. If not, feel free to jump to the end of this blog.

Thinking Fast and Slow

Another insight that Kahneman brings to the table is the notion that we all have two different and not completely complementary schemes for making decisions. He calls them System 1 and System 2.

System 1 is quick, quick, quick and allows us to recognize faces, understand speech, and respond to a red light (or a yellow) in fractions of seconds. As Freeman Dyson pointed out in New York Books it is a great skill if you are an early hominid trying to survive in the jungle.

System 1 also has a speed of light access to our store of memories and can use them to make virtually instantaneous analysis of a situation and calculate the best chance of survival success. On the other hand, Dyson adds, the store of memories readily available to us tend to be those associated with strong emotions, most often fear and pain. Maybe not the best platform for high level decision-making, but he points out, “in the world of the jungle it is safer to be wrong and quick than right and slow.”

Which brings us to System 2, also known as thinking slow. System 2 forms judgments by making careful and critical analysis. It weighs the good, and the bad, and the ugly. It is contemplative and careful and provides us the ability to make plans and coordinate activities. To quote Dyson again, “After we became human, System 2 enabled us to create art and culture.”

For most of us in marketing and in the business world in general, our idea of ourselves (or our ideal of ourselves) is that we function in System 2, making data driven decisions based on analytics, a/b testing, demographics and psychographics. The problem with that, says Kahneman is that System 2 requires a whole lot of mental effort and as a species we don’t much like mental effort. It burns too many calories!

As result we are prone to avoid having to engage System 2, and have evolved as a species to conserve energy and be as efficient as possible with the resources we have. In other words, I am (and you are) living in a System 1 world and I am a System 1 girl. Additionally our biases and tendency to use an heuristic make it easy for us to see intellectual activity such as calculating, talking and writing as thinking things through, when according to Kahneman that is exactly what they aren’t.

Or, to put it another way, System 2 engages only after everything we have tried with System 1 has failed. And also, when we let it.

It’s All Relative

And now here we are. One hundred years after Einstein set down his general theory of relativity and changed how we think about and understand the world, and eight and five years after the iPhone and iPad showed up upon the scene and changed the way we think and understand the world.

The devices begat an explosion of social media and social media marketing where everything is happening fast, fast, fast. We have entered the relative universe where time is moving more quickly than ever before and wherever we are in our knowledge base, and in our ability to respond to the new world of mobile-driven, micro moments and instant response determines how quickly or slowly we believe things to be moving. It is a world where a Twitter post can have a life as short as 18 minutes and according to a study by Akamai and Gomez.com we tolerate a website to load in 2 seconds or else shut it down.

What does that mean for us as marketers? I don’t completely know, but my System 2 will get right on it.

Answer to the math problem:

If the ball cost 10 cents then the total cost would be $1.20 because at 10 cents for the ball, the bat has to cost $1.10 in order to be a dollar more. That’s why 5 cents is the correct answer. The bat costs $1.05.