Wednesday, August 14, 2013

A Conversation with Dan Pink

Interview conducted by Ideas To Go Facilitator Katie Konrath on July 5, 2013—originally printed in the Ideas To Go July, 2013 Newsletter

The Bureau of Labor Statistics reports that 1 of every 9 Americans is in sales. But in his latest book, New York Times bestselling author Daniel Pink takes the stance that, no matter their job title, everyone is involved in sales—because we’re all ultimately in the business of persuasion.

I recently had the pleasure of speaking with Dan about what he learned in writing To Sell Is Human, which helps companies to better understand their customers.

Katie: In To Sell Is Human, you write about how sales has changed dramatically from the stereotypical door-to-door salesman. So what is the biggest thing affecting how consumers make a purchasing decision today?

Dan: The biggest change, by far, is that consumers have way more information than they ever had before—and in many cases, they have as much information as the seller. That changes everything. It used to be that the whole world of sales was defined by information asymmetry, where the seller had more information than the buyer. Now, that information asymmetry is disappearing—it’s not gone entirely—but it’s disappearing. To me, that is the single biggest change: the move from information asymmetry to something at least approaching information equality.

Katie: You also say that information is moving from problem-solving to problem-finding when it comes to persuasion these days. Why is that so important?

Dan: Well, it actually goes very much to your first question. Let’s say that you’re a seller. It used to be that a seller, having access to information, had an edge. But now we all have access to information. So if I’m a buyer, I may know precisely what my problem is without a seller.

Take my office for example—I work out of a refurbished garage of the house. Suppose that I have a burnt-out light bulb. I don’t need a salesperson for that—I just find out what kind of light bulb it is, and order it. I don’t need anybody to solve my problem—I can find a solution on my own. So a salesperson isn’t valuable to me. Where a salesperson is valuable to me, is when I discover the light bulb isn’t really my problem. Say my problem ends up being that I have a screwed-up electrical system, which I didn’t know.

Sellers are more valuable when people don’t know what their problem is, or they’re wrong about their problem. That’s why problem-solving matters less today than problem-finding. Solving existing problems matters less than identifying problems people don’t realize that they have.

Katie: Another thing I found interesting in the book was your example of the software company whose software engineers interacted with their consumers. It wasn’t just consumers, and sellers, and software engineers all in isolation. What do you think is so valuable about that? 

Dan: I think it leads to better results for customers. If you have engineers who understand how their customers are actually using the product, who are sitting with them and getting their reactions in real time, then that product is going to get better—much faster. That kind of metabolism is different from the traditional metabolism where: first a customer uses a product, then maybe 6 or 8 months later you might do a survey, then you tabulate the survey, and then you interpret the survey. Interacting directly with customers just creates a much faster metabolism of improving products.

Katie: So, if you have the software engineers approaching the customer—or people within the organization for product development—you said they shouldn’t approach it from a “high-power” perspective, right? 

Dan: Well, it depends. There’s evidence showing that there are some times—not every time—when reducing your feeling of power can actually increase your effectiveness. By reducing your own feeling of power, there’s evidence that you become better at taking someone else’s perspective at that particular moment. I don’t suggest uniformly reducing your power in every circumstance, but at certain times, it can make you more effective.

Because once you increase the acuity of your perspective-taking, and then see someone’s perspective more clearly, you’re much more likely to find common ground. Finding common ground and seeing someone else’s perspective is extremely important now, because there’s less coercive power in:

1) the marketplace—because buyers and sellers are evenly matched on information, and
2) companies—because bosses are slightly less dictatorial and/or controlling than they were, say, 25 or 50 years ago.

Katie: So let’s say we want to develop a product, and we’re having a group of customers come in. We’re going to talk to them, and we want to get their feelings—how do we reduce our feeling of power? 

Dan: Okay, let’s say you’re a very accomplished engineer, you have this consumer product, and you’re dealing face-to-face with a customer who’s trying it out. The product is very easy to understand if you are a well-educated engineer. You have an advanced degree, you’ve got 800s on your math SAT, and the person coming in is just a regular Joe like you and me. It’s easy to feel very powerful in this situation. After all, they’re testing your product.

They didn’t come up with it—you came up with it. But, you really have to reduce your feeling of power in that moment and recognize you need that customer a lot more than that customer needs you. Even though you might have a better education, that customer’s opinion matters a lot more to you than your opinion matters to him or her. And so it’s really about recalibrating your notions of power, and recognizing that—in many cases—the other person needs you a lot less than you need him.

Especially when there’s a kind of hierarchical imbalance creating a different power dynamic, just reducing your feelings of power in that moment can increase your ability to see the other person’s perspective, which actually increases your effectiveness.

Katie: I think that’s interesting for marketers to think about—because you’ve been studying these consumers—and know everything about them…then the customers actually come in. How do you react? 

Dan: Right. Another way to look at this is a word that comes out when I interview really accomplished salespeople: humility. There’s all sorts of research in the management literature—Jim Collins has written about his own research—there’s other research that both Adam Grant and Bob Sutton have done, essentially showing that humility is a very important leadership and management skill.

And in some sense, what we’re talking about here is just that. It’s to be humble. Not “fake humble,” like a lot of people do, but genuinely humble, and recognize—“Hey, you know what? You actually need this person. This person has a lot of power. This person’s opinions really matter.”

If this person doesn’t like the product, your livelihood might be at risk—so you’d better take this person seriously, and you’d better listen acutely to what they have to say.

Katie: I love that—especially because in the area of big data now, companies know so much about consumers. 

Dan: You know, you have to be humble in the face of big data, too. There’s going to be a lot of hubris and overconfidence with big data. There are going to be some colossal mistakes made, based on big data. Katie: What do you think about that? How do you think so? Dan: I think big data has a “flavor of the month” feel to it right now.

We tend to think that any complicated question can be answered with reams and reams of data—and that’s sometimes true, but sometimes not. A lot depends on the quality of the data that we get. Some of it is going to depend on how we collected that data. And, how do we interpret it? Are we asking the right questions about it? I think that big data is actually a big deal—I don’t want to dismiss it.

But I feel like it’s something everyone is going to be going crazy over for two years, then recognize the limits of it. There’s going to be kind of a big data bust—then in 10 years it’s going to be an even more significant part of how we operate.

But ultimately, one needs to be humble since data itself doesn’t have any kind of feelings or soul. One has to approach the data itself with humility about what it actually reveals, and about our capability of interpreting, as well.

Katie: So, while talking about having humility, you also talked about having empathy for your customer—or being able to take her perspective. What do you think the difference is, and what’s more valuable? 

Dan: Well, they’re both valuable. It depends on what you’re doing. I think that in something like product design, empathy is extraordinarily valuable—in many ways, more valuable than perspective-taking. Again, empathy and perspective-taking being very, very similar—but not identical.

When you get to a kind of transaction, or negotiation, the evidence shows that focusing on peoples’ interests and thoughts is often more valuable than focusing only on their emotions and feelings. So ideally, what you want is both channels of information, but the reality is we’ve got such heavily cognitive loads that we often can’t keep that all in mind.

So in a negotiation--if you have to do triage—focus on thoughts and interests, because that’s what the research shows. But I think in product development—particularly with consumer products—I would lead with empathy.

Katie: And then maybe by figuring out how to talk about them, we’ll go with more of their perspective?

Dan: That’s actually a really good point. I agree with that.

Katie: So my last question is about an example in your book of what we would call “assumption busting.” It’s where you gave someone an object, and asked them to pretend they were describing it to someone either way in the future, or way in the past—and how that would change their assumptions about it. What do you think about that exercise, and about how it works to change people’s thought processes? 

Dan: I really like that exercise—I got it in an improv class. I think it’s great for a creativity class. The idea, to explain it briefly, is to come up with a list of things that didn’t exist 300 years ago. You pick a toaster oven, an iPad, pizza delivery, whatever. You then try to explain it to someone from 300 years ago. It ends up being very, very difficult.

For instance, I recently did this exercise with a company where they ended up picking an iPad. This one very bright woman in their operations department was trying to explain an iPad to me from her perspective—and I took the position of someone from 1713. And she basically just threw up her hands in exasperation, because it takes so much explanation—you have to understand electricity, which didn’t exist then. That alone is hard to fathom.

So, trying to explain an iPad from 300 years ago turned out to be really hard because we have certain kinds of shared functions that allow us to understand things.

The big take-away for selling—and the way you can influence—is that a lot of times, when we explain/sell/pitch things to other people, the folks on the other side of the table are kind of like those folks from 1713. They don’t have the same shared assumptions you have. And so, if you operate under assumptions they don’t have, you’re never going to persuade anybody.

Katie: Especially in product development or design—what are these factors at the back of our minds? 

Dan: Exactly—it shines a light on them, or excavates them a bit—and there are a lot more of them than we think. What you would think to be the simplest product you could imagine, may end up being outrageously difficult to explain because there are so many shared assumptions that you lack.

About the Interviewer: 

Katie Konrath is an Innovation Process Consultant at Ideas To Go, an innovation agency that works with Fortune 500 companies in ideation and concept development to incorporate the voice of the consumer.

You can catch Ideas To Go with Mead Johnson as they co-present “Research for Innovation—How to Turn Facts Into Ideas” at TMRE on Tuesday, October 22nd at 3:15pm.

No comments: