There has been many financial crises over the past century, yet few of those provided much of a warning that they were about to hit. It only becomes clear after the fact. We then begin to hear speeches on what there was to learn and how to avert any future crisis, until the next crisis arrives in a slightly different form. Philosopher George Santayana, once wrote, “Those who cannot remember the past are condemned to repeat it.” History has proven this to be true.
We now have a situation brewing in Turkey, yet there are many in the financial media who are already quick to write off the current collapse in the Turkish Lira as contained to Turkey and that the size of Turkey’s GDP makes it less of a threat. Yet, Turkey’s GDP is double the size of what Thailand’s was during the Asian crisis. Therefore, in order to understand the current crisis in Turkey, it is worth looking back at the Asian crisis of 1997.
In 1997, just before the crisis hit, Thailand’s economy was booming. Banks were lending freely. The resulting large quantities of credit that became available generated a highly leveraged economic climate, which led to excessive real estate speculation, and pushed up asset prices to an unsustainable level. An economic expansion, that nobody wanted to end, was in full force. In fact, the Thai central bank kept the currency artificially high, fuelling the speculative bubble.
I guess you could say that there were signs of a brewing crisis if you choose to focus on them. Banks began lending against the security of the buildings that didn’t have too much of a chance at being filled. Muang Thong Thani was a housing estate built for 700,000 people and became a victim of the coming crash. At the time of the mid-1990s, Thailand, Indonesia and South Korea had large private current account deficits and the maintenance of fixed exchange rates encouraged external borrowing and led to excessive exposure to foreign exchange risk in both the financial and corporate sectors. Capital controls were being reduced and there was a lack of transparency.
In 1995 the US dollar began to strengthen. For the Southeast Asian nations which had currencies pegged to the US dollar, the higher US dollar caused their own exports to become more expensive and less competitive in the global markets. Southeast Asia’s export growth slowed dramatically in the spring of 1996, deteriorating their current account position. Once the financial markets sensed that the Thai foreign currency reserves were dwindling, they started shorting the Thai Baht. The asymmetric information in the financial markets led to a “herd mentality” among investors. Their actions helped to magnify the underlying weaknesses and hence, make the first domino fall.
The economy ground to a halt, salaries were cut and the price of everything began to go up. The IMF stepped in with a loan but that didn’t help so they went to the US for help but they refused. The US was hardly worried that a small country like Thailand could cause any significant damage beyond its own borders.
Once Thailand began to unravel, speculators and traders began to get worried about other South Asian countries, such as Malaysia, Indonesia and South Korea. Like a classic run on the bank, investors began to dump their positions in those countries, and at the same time speculators were quick to short the currencies, putting more downward pressure on them. Current Prime Minister of Malaysia, and also Prime Minister at the time, Dr. Mahathir bin Mohamed, stated, “As the currency and the stock market went down, we felt totally helpless.” Once the contagion hit Indonesia, the Government and economy collapsed and from that fallout, the social fabric began to collapse. The IMF had to step in and provide huge loans, but with those loans came conditions. These countries were then subjected to acute economic austerity.
The contagion then spread to South Korea but by the time the IMF got to their central bank the money was all gone. In spite of the fact that the South Koreans had convinced everyone their financial foundation was stable. In order to avoid a default, South Korea received a bailout of $55 billion in new loans and credits. In the end roughly $116 billion flowed out of Southeast Asian Markets.
At the time, US hedge fund LTCM, controlled $100 billion in global assets and $1 trillion indirectly. The Asian financial crisis was not factored into their complex mathematical risk equations and therefore took Long Term Capital Management completely by surprise. Contagion came to America.
Looking back, one important point here is that this contagion was not set off by anything fundamental beyond Thailand. If Thailand had been contained, the other economies may have adjusted and set stricter controls in order to avoid a Thai scenario. It was fear of the unknown and a loss of confidence that forced the financial markets to make the moves they made. The corruption, overbuilding, and foolish loans were just kerosene for the fire once the match was lit. Today’s world financial markets and economies are so interlinked that events impacting one region will have an emotional behavioural impact on another. One domino falling sparks fear in the markets that others are sure to follow.
So the question is looking at today’s markets, who will be the first domino to fall? Some thought Cyprus but that was contained. Then there was Greece but that was contained. There was talk of Italy being the first. Then last week we had Turkey. If the Turkish situation deteriorates you can bet that the financial markets will, like during the Asian crisis, become nervous regarding areas beyond Turkey bringing considerable risks of financial contagion. We already saw investors dumping stocks such as Italian bank UniCredit last week, for fear that they are over exposed to risks in Turkey. According to the Bank for International Settlements, international banks had outstanding loans of $224 billion to Turkish borrowers, including $83 billion from banks in Spain, $35 billion from banks in France, $18 billion from banks in Italy, $17 billion each from banks in the United States and in the United Kingdom, and $13 billion from banks in Germany. So what happens next is anybody’s guess but to believe that it couldn’t happen again is probably not the most prudent view to take.
If you are like most people these days then you probably have lost your sense of discovery and prefer to rely on the opinions of others as you roam the endless roads of social media. That is why Top 10 lists of everything from chocolates to music attract so many readers. It is essentially because they feel that somehow these cyber strangers are more qualified to provide opinions than they are.
The previous statement is of course false. The truth is everybody has an opinion about what they like and what they prefer. The great jazz pianist Bill Evans, when speaking about jazz as an art form, disagreed with the premise that the neophytes opinion was less valid than the jazz musician who knew all the ins and outs of the art form. He believed that one could even say that the neophyte’s opinion was even more valid because he was listening to the music without being weighed down by all the other analytical additional knowledge flowing around the musician’s head.
You can argue the point that the more you experience something the higher your point of reference becomes, which would make you more critical of something, but you can’t tell somebody that their particular opinion of a piece of music is wrong when they are speaking from their personal point of reference.
This is the issue about creating Top 10 or Top 100 lists about things that are subjective to the individual. Even if you have 99 people all preferring one piece of music to another, but one person in the bunch does not like it for whatever reason, it can’t be quantified. Compare this example with comparing the strength of different pieces of material. You can state the Top 5 strongest materials on earth because their strengths can be quantified. This objectivity makes for a valid comparison between them.
So why do people feel the need to latch on to somebody else’s list of the greatest Rock Groups or greatest whatever? Often the answer is certainty. Rather than have to listen to 100 albums and make the distinction themselves, they take the list and discover the best in hopes of saving time or having to slave through something painful. They become more comfortable in the fact that they will be listening to what they would have chosen anyway.
In addition to wanting to feel certain about something, there are those that exhibit different cognitive biases that affect their opinions. An example of this is the courtesy bias – the tendency to give an opinion that is more socially correct than one’s true opinion, so as to avoid offending anyone. Therefore, you can imagine how many of these Top 5, 10 or 50 lists are based on nothing more than wanting to appease the reader. Pick out the most widely held views about something in order not to offend anybody or look bad themselves.
There is also the authority bias – the tendency to weigh the opinion of an authority figure more heavily. A good example of authority bias is the recent explosion of bloggers writing about their world travels. They present themselves as the best source of information about what to see or where to visit. I happened to come across an article by one of these well known bloggers that described why he would never visit Vietnam again. He proceeded to express his distain for the people he met and how he was ripped off etc. Anybody following his advice would have sabotaged an opportunity to experience it for themselves. I did have the opportunity to experience a visit to Vietnam not too long after I came across that article. My experience was vastly different. It was one of the most fascinating countries I have visited.
Not everybody is comfortable giving their true opinion of something, so they prefer to accept the opinion of others. This is called the “Bandwagon effect” – The chance of people adopting certain ideas or making decisions increases when more other people have made these same adaptations or choices. Underlying mechanisms of this cognitive bias are people’s need to conform to a group norm, and the use of other people’s choices as information for making your own choices.
Subjectivity refers to personal perspectives, feelings, or opinions entering the decision making process. Objectivity refers to the elimination of subjective perspectives and a process that is purely based on hard facts.
Next time you take a look at a Top 10 list, pay attention to how it is worded. Is it “The Top 10 Places to Visit on Earth,” or is it “My Top 10 list of places,” or something similar. Because there are so many of these lists now produced and many of them have caused disagreements and agressive feedback, as you would expect them to. This is what happens when dealing with subjectivity. You are probably more likely to see the addition of the phrase, “as selected by our readers,” or based on votes from “critics” or “industry experts” which falls into the authority bias category.
We previously wrote about how our sense of discovery has been lost. Too many people are now relying on a social media stranger’s opinion, or even Google’s opinion. Do yourself a favour and just enjoy the process of discovery. At the least, create your own Top 10 things to eat, to visit, to do, to listen to. After all, your opinion is the one that matters most. As you expand your horizons and make new discoveries you will most likely find that all those list slowly change over the years to reflect your most recent experiences.
Have you ever walked into a room of a small group of people and felt a blast of negative energy? Everything looks normal enough but you have an uneasy feeling. Later you find that a couple among the group have been arguing. You were not aware of the reason at the time you entered but you felt the presence of negative energy well before you even knew what was happening.
Equally, you may have met somebody who affects you in a positive way. They are fun to be around. They tend to make anybody that comes in contact with them feel good. They have a way of emitting positive energy. We have seen that by adapting a lifestyle that leads to emotional and physiological balance you may have a positive influence on all others around you. If not, the opposite becomes true.
So how does this apply to a world where people have become accustomed to communicating with each other by distance, through smartphones and texting? If we can no longer sense the presence of the person we are speaking with, are we truly connected? Mark Zuckerberg wrote in 2017 for the first Facebook Community Summit, “For the past 10 years, our mission has been to make the world more open and connected. We will always work to give people a voice and help us stay connected, but now we will do even more. Today, we’re expanding our mission to set our course for the next 10 years. The idea for our new mission is: Bring the world closer together.”
This prompts the question, “Does a world connected by smartphones, web interfaces, false personas and anonymity constitute a world that is more open?”
Zuckerberg continues, “I always believed people are basically good. As I’ve traveled around, I’ve met all kinds of people from regular folks to heads of state, and I’ve found they almost all genuinely care about helping people.” Ironically, Zuckerberg opted to travel and meet these “regular folk” in person, when he could have quite easily struck up a conversation with them via their facebook page.
He goes on to say, “We all get meaning from our communities. Whether they’re churches, sports teams, or neighborhood groups, they give us the strength to expand our horizons and care about broader issues. Studies have proven the more connected we are, the happier we feel and the healthier we are. People who go to church are more likely to volunteer and give to charity — not just because they’re religious, but because they are part of a community.”
The groups and communities he is describing are those that meet up personally to share thoughts and ideas. Meetings where they share the experiences together in the same location as opposed to sharing it through a text message. They are sharing each other’s company. They generate energy and nurture others as others generate energy and nurture them.
Ironically, what some may see as a connected world, others see as a world of human’s becoming more distant and isolated. Communicating with others via technology removes that energy that we all share when we speak with someone face to face. You do not get a sense of a person’s energy through a text message or tweet. You are not able to read the body language. As human’s, we communicate with the tone of our voice, our body language, our eyes etc. We communicate on many different levels.
Some call this intuition yet others believe that we, as humans, create energy and have the ability to transmit that energy, be it negative or positive. Any thought, intention or action triggers an emotion which gives rise to this energy. Our thoughts and memories are essentially energy.
Energy released by an angry individual is shared with all people including plants, animals, and objects that he or she comes in contact with. This is how the negative or positive energy gets passed on from one person to another. You can feel that loss of energy yourself when you fall ill. Negative energy robs you from your vitality and wellbeing, while positive energy rejuvenates, and keeps you in a state of joy, happiness and good health.
Social media claims to be connecting people but to what extent? Isn’t it a purely superficial connection void of any real feeling? Social media has its place but nothing is a replacement for human contact. Human contact and energy seems to be the missing link in our newly “connected world.”
Everybody uses Google’s search engine daily, however, in addition to using their tools people should be learning from what Google does as a company, especially when it comes to failure.
When kids are learning to speak, walk, or do most of the actions we take for granted as adults, they are never impeded by the fact that they have previously failed their attempts. They just keep modifying their actions until they succeed. So why and when does this change? At what age do we suddenly have the realization that if we don’t do things perfect, we are less of a person?
You never hear a parent say to a baby as it is learning to walk, “You fell again, what’s the problem with you?” Unfortunately, at some moment this behaviour changes. You can see it on thousands of baseball little league fields, hockey rinks, basketball courts, singing contest, dancing contests, etc. A boy drops the ball and suddenly hears it from his coach, his teammates or some stranger in the stand yelling, “Bench that kid!” This instills the thought that we are not allowed to make a mistake. That is a lot of pressure to put on anyone.
We don’t consider this kind of behaviour as the norm because we know that there is a large amount of support from parents and educators. There are a number of companies and researchers looking to improve and discover new approaches to learning and teaching. However, the desire to win at all cost does often override the desire to accept one’s mistakes, embrace them and learn from them.
The problem is not failure in itself; it is how people perceive failure. It is how we are conditioned to deal with failure. Just the sound of the word seems to evoke the connotation of something less than whole, something weak or bad. Of course it doesn’t feel great to be performing in front of someone and make a mistake. Somehow it makes us feel inferior or less than perfect. But therein lies the negative perception. Quite often that fear of failure works negatively on our nervous system, which in turn decreases our chances of performing at a peak level.
If one can change their perception of failure or their definition of what it means to fail then there is probably a greater chance that they improve more rapidly and their chance of success in whatever endeavour they choose. In addition, they enjoy the process.
The classic example of someone’s positive perception of failure is that of Thomas Edison. When asked how he dealt with so many failures in trying to find the right filament for the light bulb, he said, “I have not failed. I’ve just found 10,000 ways that won’t work.”
Interestingly enough, the people who can embrace failure and take risks invent things; dare to do what others don’t because they are focused on the road to success in front of them. They don’t concern themselves with the failures they have left behind because in their minds it is just a part of the learning process. These failures don’t represent them. Instead they are further clues on the road to getting to where they want.
Failure does not mean taking blind risks. Failure is the result of taking a calculated risk. It is that percentage of risk that results in a potential failure. You analyze that result, make some changes and reduce your risk. You do it again until your risk is eliminated and you succeed. The great Canadian Hockey player, Wayne Gretzky once said, “You miss 100% of the shots you never take”. If you take yourself out of the game, you will never have a chance at winning.
In business the word failure has become synonymous with Silicon Valley, mainly because of the startup and risk taking culture it has developed. However, this is looking at failure on a larger scale. It happens on a much smaller scale daily. It could be screwing up a dinner, getting a crossword puzzle wrong. Giving the wrong answer to a question at a dinner party (maybe even the same one where the dinner was screwed up). People are bothered by these failures because it seems to be a reminder that they are somehow not perfect.
Perfection is a figment of the imagination (see our post). Believing that perfection exists means believing that once achieved you cease to grow or learn. Our lives are a journey of constant discovery and improvement. To set yourself the illusive goal of perfection, you set yourself up for a string of never ending disappointments.
There have been many strong statements regarding failure made by well-known personalities over the years. They should be used as a great source of motivation towards changing our own perceptions on failure.
“The only real mistake is the one from which we learn nothing.” – Henry Ford
“Success is stumbling from failure to failure with no loss of enthusiasm.” – Winston Churchill
“Every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit.” – Napoleon Hill
“You build on failure. You use it as a stepping-stone. Close the door on the past. You don’t try to forget the mistakes, but you don’t dwell on it. You don’t let it have any of your energy, or any of your time, or any of your space.” – Johnny Cash
“Failure is so important. We speak about success all the time. It is the ability to resist failure or use failure that often leads to greater success. I’ve met people who don’t want to try for fear of failing.” – J. K. Rowling
“It’s fine to celebrate success but it is more important to heed the lessons of failure.”-Bill Gates
“Mistakes are the portals of discovery.”-James Joyce
So what does all this have to do with Google? Google has to be considered an incredible success on so many levels however they have not achieved it by accident. Google is one of the few companies that actually see making mistakes as a portal to learning and discovery. They have gone so far as to create a process, which they call a “Postmortem.” A postmortem is the process their team undertakes to reflect on what they learned from their most significant undesirable events. Incidents may happen, but not all require a postmortem. Therefore, the first important step is to 1. Identify the most important problems.
Once they have identified the problem their next step is 2. Work together to create a written record for what happened, why, its impact, how the issue was mitigated or resolved, and what to do to prevent the incident from recurring. They ask themselves questions such as; what went well, what didn’t go well, where did we get lucky, and what can we do differently next time?
Lastly, Google has understood that being blamed for an incident will only promote self-pity and become very unproductive. So they made a conscious decision to apply step 3. Promote growth, not blame. By removing blame from a postmortem, team members feel a greater psychological sense of safety. This enables them to escalate issues without fear. By assuring team members that they will not be punished for the mistakes they made, a greater trust is built. These three steps reposition failure as an opportunity for growth and development rather than as a setback.
These are steps that anybody can apply to their own daily lives. Learn from Google’s mistakes and look at every failure as a chance to discover something new, learn something, or improve something and you will in turn make yourself much happier.
The Russians completely destabilized the US political system and skewed the vote of the American public in favour of Donald Trump. They used platforms such as Facebook and Twitter, who were also implicated in this massive fraud. How could the US be intimidated and coerced so easily? Actually the question should be how much of this story is made up and how much is truthful? A question that, unfortunately, we are unlikely to find the answer to.
The definition of the word propaganda is — information, especially of a biased or misleading nature, used to promote a political cause or point of view. Propaganda is a means of influencing people. Its principle goal is to persuade others to accept certain beliefs and ideas. Propaganda in modern times is now a more potent force than it has ever been. The dissemination of information via social media and the internet happens at warp speed and spreads like a virus. In addition to the methods of distribution, propaganda makes use of a number of tactics, many times used in tandem in order to gain the greatest impact. Here are a few examples:
Fear – A large number of psychological studies have found that humans will do more to avoid pain than they will to gain pleasure. We are hard wire with a fight or flight response which keeps us on our toes when fear is involved. It is therefore a potent propaganda technique. Just turn on the news and you will see the deliberate use of extreme ideas and symbols for the purpose of swaying opinion by causing deep, and at times irrational, fear.
Repetition – The classic brainwashing technique is to repeat an idea, word, or image over and over and over again until it becomes imprinted on the objects mind. When politicians focus on staying “on message,” meaning they repeat the same buzzwords and reinforce the same ideas in multiple public appearances and statements, they are using this technique. The media makes use of this technique. When Howard Dean was running for president he made a speech in Iowa where he yelled out “Yee Ha” to rally the crowd. This caused the death of his candidacy, as the media jumped on it and declared it unpresidential conduct. How did they persuade the public to accept this belief? According to the Hotline, a Washington-based newsletter, cable and broadcast news networks aired Dean’s Iowa exclamation 633 times (and that doesn’t include local news or talk shows in the four days after it was made).
The Common Folk – With the recent rise of populism in the US and Europe, appealing to the common folk has become a propaganda technique. The goal is to make viewers feel that they directly connect and can relate to the message or meaning of the propaganda. Mark Zuckerberg went on a cross-country tour to meet blue-collar folks and soccer moms. This of course began to fuel rumours that he was considering an eventual run for president. It was noted that Obama said the word “folks” at least 348 times during presidential news conferences.
The Band Wagon – We previously wrote about this (here) in reference to the Bitcoin explosion. The interest in cryptocurrencies and Bitcoin has fuelled the use of propaganda from both directions, for and against its use. The idea here is that everybody is adopting it so you should too. Often the word “we” is used heavily to imply that everyone is in a situation or group together.
Demonizing – By characterizing an enemy or opponent as evil, vile, or dangerous, propaganda can appeal to visceral feelings of fear, disgust, and repulsion. Exaggeration is required, and this technique is particularly necessary for any political “smear campaign.” Donald Trump used this technique effectively in his presidential campaign. He implanted the idea of a dangerous, deep state and evil Hillary Clinton in the minds of many voters. How could you tell? It was so effective that Clinton became recognized as “Crooked Hillary” by his voting base.
Paternalism – An individual’s need to feel protected and watched over is a perfect target for propaganda. For this reason, many governments will employ imagery and symbolism that evokes a sense of paternalism. The emphasis on a strong, fatherly authority is appealing to many consuming propaganda, making this technique extremely powerful in times of distress or crisis, such as in the use of Uncle Sam in military propaganda.
Victorious – Everyone wants to feel like a winner. If a piece of propaganda can paint a candidate or group’s victory as certain and inevitable, then the viewer will want to join the group. This is why you will often hear a plea to “join us now,” before it’s too late.
The Lie – This strategy requires an entire body of propaganda, usually across multiple mediums, and focuses on stirring up strong emotion by retelling or reorienting a major story or event to change people’s perception of the event. This technique ties together with other techniques like fear mongering, demonizing, and repetition. This is what we started the article with, “The Russian Conspiracy.” This story has been presented in loop from all angles, by a number of distribution methods for well over 18 months. Have you encountered it? Have you been influenced by the propaganda? Whether you accept it or not, you have certainly been coerced into forming an opinion based on information that may or may not be fact, without even being aware of doing it. Such is the power of propaganda.
Have you lost your sense of discovery? The number of developments and innovations that have taken place in recent years have been no less than stunning. I don’t think even the true initial believers could have imagined how a platform such as the internet would come to engulf our lives and make us so dependent on the information that it encapsulates. It seems to be the answer we have to every question. It is the arbitrator for every dinner table disagreement. It is our idea generator for the meal we want to cook for our dinner party. It is the purveyor of books we should read, restaurants we should eat at and locations we should visit.
The development of smart phone technology has extended that convenience one step further. Now, instead of having to slip into a cyber café to use a computer or wait till we are home to check our own, we can now have access to all this information whenever and wherever we are. This provides added capabilities such as geolocation applications whereby we can check to see if there is something within 100 feet of where we are standing that merits our attention. Are the burgers good at that place on the corner? Do they serve a good espresso over there? I have an hour to burn, is there an interesting museum to visit nearby?
The speed of the dissemination of this information has also vastly increased, and only seems to be getting faster. This allows people to spread the word to their tribes in a matter of seconds. We saw recently one of the more negative aspects of this advancement where an alert went out in Hawaii about an incoming missile. Around 8:07 a.m. on January 13, 2018, an errant alert went out to scores of Hawaii residents and tourists on their cellphones: “BALLISTIC MISSILE THREAT INBOUND TO HAWAII. SEEK IMMEDIATE SHELTER. THIS IS NOT A DRILL.” The spread of the message was extremely quick and effective as it sent scores of residents and travellers into a panic. There was only one problem, the message was false.
The combination of a worldwide internet, geolocation tracking and the speed at which we can transmit information, has created an arena for just about anybody to voice their opinion, on just about anything to the world, wherever they happen to be located at that moment in time . This has now created tribes of self-declared independent restaurant connoisseurs, historians, travel experts and curators of lists. The 10 best cafés, The 10 best cities to visit, What to do when you are in Paris, The best hotels for couples under 40, and my personal favourite, 20 hidden beaches away from the tourist crowd!
The blogs curating this kind of content have flourished over the years and there is a principle reason for their success. People look for certainty in their lives. When they go to a restaurant they want to know that they are assured of receiving something of equal or better value compared to what they have to pay. They want the promise that they have tasted the best cappuccino that can be found in all of Italy. If they go to a hotel they want to know that others who have been there previously have enjoyed it. This provides them more confidence that they won’t expect any unfortunate surprises. If they have traveled a long way, they want the guarantee that they have experienced the best that the location has to offer. The best way people have found to gain this certainty is to follow in the footsteps of someone else’s experience. So they go online and a quick Google search provides them with no lack of self proclaimed experts on where to go, what to see and what to eat.
In addition to the endless number of self-proclaimed experts, there is artificial intelligence. These are the algorithms that analyze everything you search for on the internet — music, art, articles, travel locations, restaurants or cafés. If you like rock music, the algorithm will feed you back a bunch of rock music. If you have been looking for Indian food, the algorithm will propose even more Indian food. Basing recommendations on a set of personal preferences sets up an endless cycle loop that is not so easy to break free from, unless you change those preferences yourself, at which point there is no discovery.
This is the point where we find discovery is lost. Discovery used to be a serendipitous event. We may have been invited to a friend’s home while his parents were playing their favourite Bach concerto. Never having heard one before made you want to go out and discover more despite the fact that you never listened to classical music before. You may have been invited out to dinner to a Greek restaurant where you discovered Souvlaki. This experience made you want to look more into Greek cooking. These are personal discoveries that were not based on any previous bias. They were pure discovery, which made them all the more appealing and memorable.
Now we have so called travel bloggers that will go out and comb every inch of a city to put up on their blog. We are not even sure if they have been to the sites they recommend. We don’t know under what conditions. They may have spent only 10 minutes in the place, long enough to grab a coffee and take a few pictures. The drawback to following someone else’s opinion on a location is that it is their opinion and not yours. Their personality may have a lot to do with their choices. If they are extroverts and you are an introvert, their choices will most likely differ from yours.
There’ll always be serendipity involved in discovery – Jeff Bezos
As an example, I happened to read an article on Vietnam by one of the most widely followed and successful travel bloggers. It was one destination that he vowed never to return to. As he stated, “The simple answer is that no one ever wants to return to a place where they felt they were treated poorly. When I was in Vietnam, I was constantly hassled, overcharged, ripped off, and treated badly by the locals.” This was his experience and maybe his personality brought out the worst in people, we can’t be sure. There are millions of people in Vietnam and to judge them all because of a few bad apples is not a fair assessment of the country. I disregarded the blogger’s experience and advice not to go to Vietnam. My experience was quite the contrary. I met some amazing people, discovered some incredible culinary dishes, and saw some stunning scenery. The best part was just walking around the city, dropping in on a café here or there and speaking with the locals — who were incredibly hospitable. That was my experience.
To travel is to take a journey into yourself – Danny Kaye
Not every discovery works out for the best, but it is pure discovery. There is something special about walking down a little back street in Rome and stepping into a café filled with locals. You feel like it is a hidden gem that only you know about. Being excited about visiting Rome for the first time just adds to the emotion and adventure. Following in the footsteps of somebody else is just that. Living someone else’s experience. Doing this you rob yourself of pure discovery. You deprive yourself of a very personal experience.
“The real voyage of discovery consists not in seeking new landscapes but in having new eyes.” — French writer Marcel Proust
The world changes. Cities change. The fantastic time you had at a little jazz club in Greenwich Village in New York is a memory you will have forever. What makes it all the more valuable is that the jazz club is not there anymore. Nobody else will ever experience what you did because it was unique. It was a discovery at the right time.
Recommendations are fine. We all ask for recommendations which can save us time. We are not saying that all lists are bad. If you are visiting a city for a short duration and you want to know where some of the best museums are, a list can come in handy. So choose one, go and get lost and discover what they have to offer. See it through your eyes and not somebody else’s.
Here are a few “ideas” on how to get discovery back:
There is a comfort in always having the same thing. Woody Allen was known for going to the same restaurant in New York and ordering the exact same meal for years. If this is who you are then fine, but if you want to break free then embrace uncertainty. Try something different.
Put away the map for a while
Don’t always feel the need to follow the map when you are in a different city. I am not saying go and get lost, but just find a quarter and go discover it. See where your intuition takes you. Take the road less traveled. I was in Istanbul one time with a few friends and saw a man crossing the street with a tray and 4 small glasses of Turkish tea. He turned into a very narrow alley way. We were intrigued so we followed him to see where the tea room was located. It turned out that it was not a tea room per se but his little business which consisted of a small bench and a hole in the wall with his material to make the Turkish tea. He gave us a sign to come and he offered us a cup of tea. We had a good laugh speaking to him through a Turkish dictionary and his broken english. Somehow the experience made the tea taste that much better. It was pure serendipity.
Speak with people face to face
What a novel thing to do in our day and age. It feels like we have lost one to one discussions with everybody peering into their smart phones. Get out and ask your friends what they have been listening to. Who are their favourite groups. You may know someone with eclectic tastes that will lead you to new forms of music you may have never discovered otherwise. I met someone from Brazil a few years ago. They gave me a cd of a Brazilian singer I had never heard of. I loved it. It sent me on a journey of discovery of forms of Brazilian music I never knew existed.
It seems like everyone reads articles on the net and have become too lazy to read books. Articles have existed for years in magazines and other publications and can be very insightful. Books, on the other hand delve deep into the subject matter. Books are an incredible source of information. Whenever I read a book I discover leads to other interesting books to read. Years ago, I was reading a biography on a musician that was discussing his love of philosophy. I never expected that this book would lead me into a study of philosophy and some of the world’s great thinkers. It was a wonderful discovery that continues today. Check out our list of “Books You Should Read.”
The founders of The Hutch Report are originally from North America. A sense of adventure and thirst for discovery eventually brought us to live in Switzerland. From here, we have traveled extensively throughout Europe and the rest of the world. We have a fascination with all the moving pieces that make up what is now known as “The New Economy.” We dig into all these new moving parts and analyze how they affect society and our lives directly. Our experience and findings, hopefully provide insights, ideas and tools for our readers to profit from.
On April 23, 2013, I was sitting at my desk watching the stock markets on my screen. I happened to be in a chat room with a number of other traders at that moment. Some were discussing their current Apple trade, others were concentrating on some options, and others just looking for their daily setups for their next trade.
I happened to be looking over at my twitter feed, when suddenly I saw this tweet show up from the Associated Press (This screen grab was taken by somebody else at the time before the twitter account was blocked and the tweet deleted).
My first reaction was to tell the others. “Hey, did you guys see that a bomb just went off at the White House?” Just as the words came out of my mouth, the news began to spread like wild fire as more people became aware of the tweet. At that instance the stock market took an instant nosedive. Everybody started to scour all the other news sources to see if they could verify what we saw.
Just as quickly, the market reversed course and made a recovery. The Associated Press came out and said that the message was the work of a hacked @AP account. The account was immediately suspended by Twitter. Regardless, that tweet of an explosion at the White House was enough to tank the markets as much as 1% in those few seconds. The fact that the “fake” news was coming from a reputable source made the impact all that more powerful. Responsibility for the attack was later claimed by the Syria Electronic Army, a group that is reported to have the tacit support of Bashar al-Assad, although that could not be independently confirmed.
The combination of a connected world, speed of delivery and the sheer volume of information seems to have created a weapon that we have never seen the likes of. At least, not one of this size. This weapon has been used in the past, but it has only been used sparingly and by only a few players at a time. In addition, it was only implemented in certain situations in history.
So what has changed? Well, now this weapon is implemented daily. It is in the hands of many, although some wield more power than others, the small players still have the ability to make use of this weapon in a very efficient manner. The weapon is misinformation.
Why is it so powerful? Each time a reader encounters one of these stories on Facebook, Google, Twitter or really anywhere, it makes a subtle impression. Each time, the story grows more familiar. And that familiarity casts the illusion of truth. The more sensationalized a story, the more it has the ability to spread. A story that casts a wide net attracts a large number of viewers. In today’s connected world, a large audience translates to money.
Although many companies and individuals attempt to “stretch the truth” or outright create “fake news” as a strategy to gain followers there are many other motives to do so. The Government has employed a strategy of misinformation for years as a means of rallying support for their causes. On February 5, 2003, Powell appeared before the UN to prove the urgency to engage a war with Iraq. Powell himself stated later: “I, of course, regret the U.N. speech that I gave,” he said, which became the prominent presentation of their case. In May 2016, Powell said, “At the time I made the speech to the UN, President George W. Bush had already made the decision for military action.”
Donald Trump has been the US President for over one year now, yet that has not stemmed the constant barrage of conspiracy theories around his win concerning potential collusion with the Russians. What it has done though is to present the power of misinformation in forming people’s opinions. Regardless of the fact that the stories we have heard are true or not, the seeds have been sown.
These false ideas that enter our psyche create feelings of doubt and suspicion. This in turn creates anxiety within the masses. The manipulative power of today’s social media tools (see here) coupled with our need to satisfy our addiction for more information, in order to quell these doubts, creates a powerful tool in the form of WMD, words of mass destruction.
Abraham Maslow was a pioneer in humanistic psychology. He devoted much of his career to describing human needs and defining human potential. He believed that people have two kinds of needs, deficiency needs and growth needs. Deficiency needs are what you need to survive, such as food, water and shelter. Growth needs are quite different. They are needs to become more and more yourself. Each person wants to develop the abilities and talents he finds in himself. Some call it destiny and others call it fate. Some call it finding your purpose in life. Finding your purpose eliminates self doubt, inner conflict and confusion.
Maslow observed that it is extremely difficult to work on your growth needs if you have deficiency needs. The more energy a person must devote to obtaining food and shelter, or building up their own self-respect, the less time they have to identifying their purpose, or as Maslow called it “Self-actualization.” Self-actualization is not a process that has an end; it is a way of being, of continuously becoming more yourself.
As we now live in an environment which seems to be dominated by smart phones and computers we thought it would be interesting to revisit Maslow, and using his framework, identify what smart phones and particularly social media has done for us as individuals.
Maslow presented his work as a pyramid, or as it is called, “Maslow’s Hierarchy of Needs.”
The need to fulfill one’s unique potential
Esteem Needs: To achieve, to be competent, gain approval and recognition
Belongingness and love needs: To affiliate with others, to be accepted and belong
Safety Needs: To feel secure, safe and out of danger; Psychological Needs: Satisfy hunger, Thirst, Sex Drives
On the lowest level are the needs that every human must satisfy to stay alive. We need to nourish ourselves with food and water, and our natural sex drives are what keep humanity from becoming an extinct species. On the same level is shelter and safety.
It is not always so obvious today with apartments, housing, supermarkets etc. everywhere you look but in our ancestors day you can clearly see that from their waking hour the main objective was to find food and water for the day. Once that was done, they spent time securing their caves from potential threats. I don’t think they spent much of their day pondering thoughts of acceptance or what their calling may be.
On this level we can ask ourselves how smart phones or your social media accounts have helped. It is clear that they don’t provide actual nourishment or shelter. It can be argued to what extent they fulfill psychological or self-actualization needs and we discuss this further on in this post. There are other technologies that are enabling new and innovative ways of building. Advances in biotech are allowing us to understand living organisms more so that we may find better ways of nourishing the planet and its inhabitants. In addition to technologies enabling creation, there are equally just as many technologies that are enabling destruction. Regardless of technology, each individual still has to think about satisfying their basic needs daily. It can be argued that for all of our recent technological innovations that have increased efficiencies, they have also put many individuals out of work. Statistics show that the homeless population in rich countries such as the US are growing. There are an estimated 553,742 people in the United States experiencing homelessness on a given night, according to the most recent national point-in-time estimate (January 2017). This represents a rate of approximately 17 people experiencing homelessness per every 10,000 people in the general population. Regardless of any technology, the fundamental needs of these people are not being met. These needs are their priority every night.
Those who have satisfied their fundamental needs move to the next level. They then become concerned with psychological needs. The need to affiliate with others, to be accepted and belong. They have esteem needs which include the need to achieve, to be competent, gain approval and recognition.
This is the level where smart phones have taken over the lives of many. All of the current technology powerhouses such as Google, Facebook, What’s App, Instagram, Snapchat and so many more, have exploited this human need for belonging and affiliation with others. We have previously written about how these companies have gone to great efforts to analyze our actions and behaviors so that we are drawn to their platforms and stay as long as possible. It becomes an endless loop which can also cause opposite negative effects of loneliness and depression as people find themselves locked in a virtual world of many yet isolated from everyone.
Our connected world has brought many people, separated by great distances, together. So it is not all bad, but like anything, too much of a good thing can produce harmful effects. Many users have managed to satisfy those psychological needs of belonging through these devices. Yet that dopamine and adrenaline rush produced from those feelings of love and acceptance from the 20 likes you may have received from your “friends” has also produced problems of addiction. It keeps you coming back for more. At this point, it is difficult to break free of that cycle and move to the top need on Maslow’s hierarchy, the need for self-actualization.
Those individuals that have their fundamental and psychological needs satisfied begin to ponder self-actualization needs which may include the pursuit of knowledge and beauty, or whatever else is required for the realization of one’s unique potential. Maslow believed that although relatively few people reach this level, the needs lie dormant in all of us.
Technology has not really produced anything ground breaking in terms of helping one to reach a level of self-actualization. Maslow observed that self-actualizing people are exceptionally spontaneous. They are not trying to be anything other than themselves. They know themselves well enough to maintain their integrity in the face of opposition, unpopularity, and rejection. The people that Maslow studied also had a rare ability to appreciate even the simplest things. They approached their lives with a sense of discovery that made each day a new day. They rarely felt bored or uninterested. It should be noted that no amount of wealth, talent, beauty, or any other asset can totally shield someone from frustration and disappointment. A certain degree of stress is built into the human condition.
All our technology innovations may enable us to reach certain objectives a bit quicker, although at the same time, they can restrict us from moving ahead. In the end, we are no better off considering that human needs have not considerably changed over our thousands of years of history.
Are you aware of anybody who has reached self-actualization? Have you made it there yet? You may find it interesting to ask yourself which needs are you currently spending most of your days trying to satisfy or how far you have to go before you can sit back and comfortably reflect on what your real life purpose is.
I moved to Europe years ago from Canada and although I made the move to embrace the change and experience another way of life, the first thing I noticed was the stores closed at 6pm. There was no 24 hour convenience that would provide me some peace of mind should I run out of milk at 8pm. I also noticed that restaurants closed at 2h30 pm, once the lunch crowd was served. If I happened to get hungry at that time I was out of luck, the kitchen staff had all left.
The supermarkets, at the time, were far from the super that I knew. Although they had all the necessities, they didn’t have all the necessities in different sizes, colours, shapes and flavors. Something that I was accustomed to.
Regardless, over time I found myself adapting to the rhythm of this world and stopped trying to fight it. I couldn’t find my beloved peanut butter so I did without and eventually found other products that were just as good and fun to experience. I discovered the joy of having fresh bread everyday, as was the custom, rather than having that loaf of Wonder Bread that would last two weeks before mold started to set in.
On a visit back to Canada I had the chance to show my new Swiss in-laws the city that I grew up in, along with many of the aspects of North American living that they only knew from movies.
In order to accommodate them I wanted to make sure that they had everything they needed to make their stay comfortable. This included their much desired morning coffee. We had instant coffee at the time and they preferred fresh brewed so no problem, I said, “Let’s go over to the supermarket and I will show you an incredible assortment of coffee to choose from.”
We arrived at the supermarket and made our way over to the coffee isle. In front of us were rows of shelves of every kind of coffee you could imagine. I said to my mother-in-law proudly “look, we are here, you can find any kind of coffee you want.” There was deep roasted, light roasted, medium roasted, french roast, instant, ground, finely ground, whole bean, and decaf. There was Mexican coffee, Ethiopian, Colombian, and Ecuadorian. Then there were the different brands. There was Folgers, Maxwell House, Juan Valdez, Nabob, Nescafé, Tully’s, Tim Horton, Van Houtte and others.
I turned to my mother-in-law and asked, “So, what kind of coffee do you want?” In a state of anguish, she replied, “I just want coffee, just regular coffee, Espresso, Espresso.” So we found the regular espresso in the regular packaging and the regular size and left the store. I then found myself actually disappointed by her reaction. I thought it would be one of amazement, such as, “wow, I can find every kind of coffee I can imagine here.” Instead, what I found was that this myriad of choice that she was presented with, in fact, complicated things for her.
I spent years in University studying all aspects of Marketing and it never occurred to me that more choice could be a problem for somebody, until I saw my mother-in-law’s reaction. In addition, it forced me to reflect on my years in Europe doing without all that choice and I actually found daily life to be easier. I gained an appreciation for basic things that we often take for granted. So, I looked a bit deeper into this choice dilemma to see why it would cause such psychological reactions in us.
We can, in fact, go back to the 14th century, where we find an analysis of the condition with the illustration of Buridan’s ass. There’s an ass (donkey) and it’s very hungry and thirsty. But because someone is very cruel, the ass has been placed at equal distances between a pail of water and a stack of hay. The donkey would try to relieve its desire for food or drink, with the choice between those depending on which is closer. But since they’re equally spaced, the donkey is paralyzed. So it stands there, and sits, and ultimately dies.
In her book “The Art of Choosing,” Professor Sheena Iyengar, S.T. Lee Professor of Business in the Management Division at Columbia Business School researched this phenomenon. A grocery store presented customers with two different sampling stations: one with 24 flavours of jam and the other with only six options. The results of the study revealed that the availability of six options resulted in 30% of consumers purchasing at least one jar of jam, while the sampling station with 24 flavors had a conversion rate of only 3%. While the larger selection attracted more onlookers, the smaller selection actually generated more sales.
When we are presented with many options, we usually fear making the wrong decision. This can be translated mathematically. When there are only two options, we have a 50% chance of choosing the right one. But when there are five options, our chances suddenly decrease to 20%. Matters become even more complicated when there are twenty options or more. Human cognitive ability cannot efficiently compare more than five options, so most of us will start looking at the first few options and then stop.
According to classical studies the consumer goes through 5 stages in the decision making process:
The problems begin in the Search for information and Evaluation of alternatives stage. Most consumers do not feel particularly confident, which has the potential to trigger strong emotions like frustration, confusion or annoyance. Frustrated shoppers who are unable to choose will most likely postpone their purchase, whereas confused shoppers may rush themselves only to get over with it quickly, and choose something they will regret later. Annoyed shoppers are quick to leave the store and head straight to a competitor, swearing to never ever return.
In his book, “The Paradox of Choice” (HarperCollins, 2003), author and psychology professor at Swarthmore College, Barry Schwartz said, “Consumers have always had choices, but today options have exploded beyond all reason.” “It’s the ethos of American society; the idea that freedom is good, more is better, and you enhance those ideas by offering choice. Logically, you can’t hurt anyone by adding options. It makes no one worse off, and some better. That’s the theory, but in practicality it’s not true.”
Schwartz argues that even if we do make a choice, “We end up less satisfied with the result of the choice than we would be if we had fewer options to choose from”. Increased choice, can make us miserable because of regret, self-blame and opportunity costs. Worse, increased choice has created a new problem: the escalation in expectations. Greater expectations will drive companies to increase the number of choices they offer, which will in turn make it harder for the consumer to make a choice. A vicious cycle.
What consumers have been confronted with is “Choice Overload”, a term that was first introduced by Alvin Toffler in his 1970 book, Future Shock. Toffler noted that as the choice turns to over-choice, “freedom of more choices” ironically becomes the opposite—the “unfreedom.” This choice overload has become even more evident in the new economy with the likes of super online stores such as Amazon and Alibaba.
In the end, according to Professor Sheena Iyengar, when faced with a complex multitude of options, consumers tend to disregard sound reasoning and pick a product based on what’s easiest to evaluate, not what’s most important. She says that, “We stick to the familiar or go by price because we don’t want to deal with so many choices and scrutinize label claims or nutrition information.”
Between 1975 and 2008, the number of products in the average supermarket swelled from an average of 8,948 to almost 47,000, according to the trade group, Food Marketing Institute. The business point of view, most new items are generated because manufacturers are under pressure to increase growth, even if those items are an extension of an existing product as opposed to something innovative. Yet, in spite of this point of view companies usually see just 20 percent of products accounting for 80 percent of total sales.
Tesco chief executive Dave Lewis, in 2015, decided to scrap 30,000 of the 90,000 products from Tesco’s shelves. This was, in part, a response to the growing market shares of Aldi and Lidl, which only offer between 2,000 and 3,000 lines. This has enabled Aldi and Lidl to be more competitive on price which has in turn helped them to gain market share.
Although we have highlighted supermarkets, choice overload is apparent across many industries and if more companies don’t take the same actions as Tesco then the onus is ultimately upon the consumer to deal with the myriad of choices before them. But how?
There is an overwhelming amount of studies on what makes consumers decide, how to force consumers into decisions, how to manipulate a consumers buying process and on and on. What is less available is information related to helping consumers fend off this barrage of marketing and choice overload, which would make sense since companies are making money from consumers and not vice versa, but there are solutions.
In a 2003 JPSP paper (Vol. 85, No. 1), it was reported that the bigger the assortment, the harder it is for people to choose, “except” under one condition: when they enter with an articulated preference. Nobel Laureate Herb Simon, PhD, first referred to this as a “satisficing” option: the first decent choice that fits their preference as opposed to exhaustively scanning all options until finding the perfect, or “maximising” one.
Essentially, the best thing that a consumer can do is to know as close as possible what he wants to purchase before he goes searching for it, no matter what the product is. Simplify it as much as you can. In addition, it may be wise to lower one’s standards when making a buying decision.
The next time you purchase coffee, define as close as possible what you want before you even think about choices or enter a store. Next, lower your standards and accept the fact that it may not rank as the best coffee in the world, then you reduce the chance of regretting your choice.
Do this and you will feel better about your decision and at which time you will have made the ultimate choice you can make!