Designing Solutions for the Human Brain - Baba Shiv at Zuora Conference
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The document discusses designing solutions for the human brain. It introduces the "X Framework" which categorizes different emotional states as bored, stressed, excited, or comforted. These map to either a Type 1 or Type 2 mindset. Type 1 seeks comfort and reassurance through familiar behaviors, while Type 2 seeks excitement through novelty. Over time, businesses tend to shift from Type 2 (exploration) to Type 1 (exploitation). The document provides guidance on influencing each mindset and factors like age, time of day, sleep, fitness and diet that influence the mindsets.
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Designing Solutions for the Human Brain - Baba Shiv at Zuora Conference
- 1. Zuora Conference Baba Shiv Designing Solutions for the Human Brain
- 2. © Baba Shiv 2015, All Rights Reserved The “X” Framework… Bored Stressed ExcitedContentComforted
- 3. © Baba Shiv 2015, All Rights Reserved Type 1 Mindset… Bored Stressed ExcitedContent Comforted Comfort, familiar, tried & trusted, social validation habitual behaviors
- 4. © Baba Shiv 2015, All Rights Reserved Type 2 Mindset… Bored Stressed ExcitedContent Comforted Comfort, familiar, tried & trusted, social validation habitual behaviors Excitement, novelty, Variety, challenge
- 5. © Baba Shiv 2015, All Rights Reserved Evolution of businesses: Type 2 Type 1… Bored Stressed ExcitedContent Comforted Good at Exploitation Good at Exploration
- 6. © Baba Shiv 2015, All Rights Reserved Next: Influencing others… What we have seen so far Focusing on the rational brain is not enough Need to focus on the needs of the instinctual brain X Framework: Type 1 vs Type 2 mindsets Type 1: Alleviating stress, fear, frustration; fostering comfort, reassurance, peace of mind Type 2: Alleviating boredom; fostering excitement “Hybrids”: The brain Needs some reassurance Before going in for excitement
- 7. © Baba Shiv 2015, All Rights Reserved Influencing Type 1s… Comfort, reassurance Familiarity, trust, rapport Social proof, validation Stress, fear, frustration Safety nets (e.g., guarantees, insurance) Frustration by reducing time, effort (physical, mental) Also: Desperation (e.g., social rejection)
- 8. © Baba Shiv 2015, All Rights Reserved Type 2s & Hybrids… Type 2s: Excitement Novelty, Variety, Discovery, Adventure, Challenge Hybrids: Build some reassurance into the value proposition Then offer excitement
- 9. © Baba Shiv 2015, All Rights Reserved Discovering the solution(s) the customer is seeking The pathway or pathways (type 1, type 2, or both) through Heuristics (based on factors that influence the pathways) Research Discovery…
- 10. © Baba Shiv 2015, All Rights Reserved Bored Stressed ExcitedContent Open to exploration New IdeasFeeling reassured Other factors influencing the mindsets… Age AGE NEUROCHEMICALS [serotonin, dopamine] Time-of-day LATER IN DAY NEURO- CHEMICALS [serotonin, dopamine] Alcohol* CORTISOL
- 11. © Baba Shiv 2015, All Rights Reserved Factors influencing the mindsets… Time-of-day LATER IN DAY NEURO- CHEMICALS [serotonin, dopamine] Alcohol* CORTISOL Time of day Serotonin Wake up
- 12. © Baba Shiv 2015, All Rights Reserved Other factors: Relevance for leaders… Sleep hygiene Importance of deep sleep Fitness hygiene About 15 min. of cardio target heart rate Release of a peptide, ANP Serotonin Dietary hygiene Importance of protein in the diet
- 13. © Baba Shiv 2015, All Rights Reserved Summary… Emotion not reason drive most decisions Crafting solutions for the emotional brain Solutions differ: Type 1 vs Type 2 mindsets Type 1: Reassurance through trust, familiarity, social validation, safety nets, etc. Type 2: Excitement through novelty, variety, etc. Factors influencing the mindsets Age, time-of-day, sleep, fitness and diet
- 14. © Baba Shiv 2015, All Rights Reserved THANK YOU!
- 15. © Baba Shiv 2015, All Rights Reserved Recommended readings… Decision Making
- 16. © Baba Shiv 2015, All Rights Reserved Recommended readings… Introduction to Neuroscience
Editor's Notes
- Consumer Leadership From the vantage point of the instinctual brain: get into why Then my wine study to reinforce the point
- Use the whiteboard: next to this discovery solutions desire feasibility viability use more labels – comfort, familiar, other side, excited, explore, engagement
- Type I vs Type II
- Most important cause of failure is past success – makes the organization shift from Type II to Type I Business success contains the seeds of its own destruction,"[6] explaining that "Success breeds complacency. Complacency breeds failure. Relpace complacency with Type 1 mindset. "[10] As a result, he urges senior executives to allow people to test new techniques, new products, new sales channels, and new customers, to be ready for unexpected shifts in business or technology.[6] Biographer Jeremy Byman observes that Grove "was the one person at Intel who refused to let the company rest on its laurels."[11] Grove explains his reasoning: A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation
- Revisit the x framework. When company is small it is type II, as the firm becomes larger and larger becomes successful, suystems are put in place processes are put in place that will make the firm Type I not bad because the firm has to be good at exploitation but if it becomes too steeped in Type 1, there will be fear of making mistakes, it will crowd out the type Iis present and future, rob the company of the innovative vibrancy that is so desperately required today. Disruptions at such a rapid pace. Give the example of Blockbuster (2002 5B in revenue – netflix 78m; 2010 file for bankrupcy) and Nokia. Who is to blame? Leaders. Why did they not feel the headwinds coming their way. One answer comes from a famous quote from Andy Grove the former CEO of Intel. He said I firms success contains the very seeds of its own destruction. He goes on to say that that success breeds complacency , complacency breeds failure. Some argue that it is not that success breeds complacency but success breeds arrogance. What I have argued is that success breeds a capital T type I mindset. What that will do is instantiate a strong preference among the leadership to go with the status quo, the classic status quo bias, and what this bias will give rise to is indecision – keep in mind indecision is very comforting for the brain. Indecision will manifest this is what I document in my research in the form of lets us form a committee, lets hire a consultant. There will be prolliferation in the number of meetings. Let’s get more data. What this will do is slow down t he decision making process – give rise to decision paralysis, especially where the decision making process is collective and democratic. That is why companies like Blockbuster take for ever to respond. Then before the leadership realizes this, the company will become reactive rather than proactive, falling behind the curve rather than being ahead of it acting only when its back is against the wall – acting through desperation rather than inspiration and decisions made out of desperation are often bad decisions. Why – focused on survival. What would firms typically do – acquisition. HP acquiring Autonomy. Within a year a write down of 8.5 b dollars. Just a year. This is the challenge that business leaders face today. How does one maintain ambidexterity within large organizations where the business is good at both exploitation as well as exploration. How does one go about influencing risk averse stakeholders among the board among the executive team get them to invest in innovation in Type 2. A topic that we will get to next. But before that, one question I am often asked How do I know that a firm has been capital T type 1 Most important cause of failure is past success – makes the organization shift from Type II to Type I Business success contains the seeds of its own destruction,"[6] explaining that "Success breeds complacency. Complacency breeds failure. Relpace complacency with Type 1 mindset. "[10] As a result, he urges senior executives to allow people to test new techniques, new products, new sales channels, and new customers, to be ready for unexpected shifts in business or technology.[6] Biographer Jeremy Byman observes that Grove "was the one person at Intel who refused to let the company rest on its laurels."[11] Grove explains his reasoning: A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation It is okay to be here proselytizing – if you had been advising blockbuster for example in 2002/2003 not later, what would yo have done. Look at age. I would have conducted a premortem – more about it ini the afternoon. Premortem is a way to induce a sense of desperation – a powerful way to get people out of a type I mind set. This is where I bring up desperTION AND THE BRAIN Sum up here wait for questions, and say that a lot of my research now is on how to foster innovation in large corporations. Charles O’Reilly will talk about it – the notion of the ambidexterous organization. Applies to you as well as business leaders – applies to your children, how do we have our children grow up being ambidexterous? Steve Jobs desperation – you are going to become irrelevant – I am the only one who can make you relevant HOW DO I KNOW IF THE FIRM IS TYPE I OR NOT Policy manual Trust – eg of a sales force How to foster innovation get rid Bring up the yes but.. Type 2, experimentations Most important cause of failure is past success – makes the organization shift from Type II to Type I Business success contains the seeds of its own destruction,"[6] explaining that "Success breeds complacency. Complacency breeds failure. Relpace complacency with Type 1 mindset. "[10] As a result, he urges senior executives to allow people to test new techniques, new products, new sales channels, and new customers, to be ready for unexpected shifts in business or technology.[6] Biographer Jeremy Byman observes that Grove "was the one person at Intel who refused to let the company rest on its laurels."[11] Grove explains his reasoning: A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation
- Type 1 These are often the late adopters – very happy with the status quo, legacy systems, processes. Type 2 These are the early adopters Hybrids: Early majority. Inherently excited about taking chances but need a nudge of reassurance Walter Isacson Walt Mossberg, Steve Jobs – testimonials to provide the little bit of reassurance
- Use myself as a consumer who buys from Amazon. Why do people buy from there? Key in Met-Rx protein plus in amazon site Trust: Trust on what? Price, general motors, removing dmaking from the cycle. Important in Type 1 – decisions are a pain. General motors, Gillette walmart For Maersk - Experimentation Scott Cook Bring up: Zappos.com Trust on what – no questions asked returns Social proof validation stars… Convenience: Frustration of having to spend the time, the effort (physical and mental) to go to a local store Subscribe and save: Fear of running out of protein powder – Peace of mind Stackoverflow: Status
- Type I: Reassurance how would you do it if you were exxon mobil? Data Guarantee warranty insurance Familiarity/trustworthiness bring comfort – how would you leverage that if you were with exxon mobil? Let’s say that you are pitching to the board of your company – you will prepare but keep in mind that Social recognition and social pressure
- Social Rejection – bring up the Sanjay CEO example that I came up with on Monday Walter Isacson Walt Mossberg