Human Logic

Cupid and Psyche: Marketers must “delve deep” to know their clients

Isaac Mostovicz writes that regardless of what marketing discipline they advocate, marketers must try to understand their customers' inner motivations ...

People sometimes ask me what is so special about Janus Thinking. In my previous blog, I positioned myself as operating within the qualitative research field. We cannot expect people to be fully aware of their deepest, most hidden motivations. Even when they are, not many would be able to express themselves in a coherent way. That’s why people use metaphors when discussing these motivations. For example, a customer called us and asked us to visit him. When we agreed upon a date he asked us whether we were going to offer his staff some training. However, when we asked him what issues he wanted us to address he said: “With me, it’s different”.  Well, the customer did not invite us to check what his problems were but asked for ”one size fits all” training while telling us that whatever we were going to provide would be rejected because with him “it’s different”. Some psychologists would use this as an example of how irrational human beings are, and criticize such behavior. But we think differently. There was a hidden message within that customer’s request, disguised within an oxymoron, which we needed to discover. Our client simply expressed his concerns in a very precise, yet illogical way. I do not know of any quantitative method which would be able to shows what exactly was on this person’s mind. Only systematic exploration could have revealed what those concerns were.


Well, Dichter emulated this approach too and we at Janus Thinking operate in the same manner, with a slight difference. To expand on this, I will explain a little about psychology. It all started with Sigmund Freud, the champion of behavioural psychology, who theorized that we have our preconscious and subconscious which guide us. Our motives are deeply hidden in our psyche and influence our behavior. Freud went on to develop psychotherapy, a dialogue between the therapist and his client to treat diverse psychological distortions. Over the years, different theories emerged and different techniques were introduced. However, all these techniques and theories had one thing in common – you need to delve deep into your client’s psyche if you want to really understand him.

Cupid and Psyche

Dichter was the first to adapt this approach to marketing. The popular maxim in marketing is that people   buy with their heart and attempt to justify their behavior, post-sale, with logical arguments. Dichter explored the first part of the maxim and gave it a scientific basis. However, he did not have the tools to address the second part of the maxim and did not understand the psychology of this logical justification. To understand what lies behind the logical justification we need to explore another branch of psychology, the cognitive one introduced by George Kelly in the 1950’s. Kelly’s theory, the Personal Construct Theory, postulated that “a person’s processes are psychologically channeled by the ways in which he anticipates events.” In other words, we constantly build theories that will arrange the world around us according to our own brand of logic. We see a series of dots and immediately we look for a pattern whether it exists or not. Using Kelly’s work, I was able to find out the way people try to explain their behavior. These justifications have nothing to do with our perceptions but with the format they use. However, understanding the language allows us to read between the lines. Again, one of the most important tools for discovering what lies behind these claims of logic is developing a dialogue with the client.


Each approach, whether Dichter or Kelly’s, has its own merit. When dealing in mass marketing, for example, then we actually try to go over the head of the salesperson to have a dialogue with the customer. We may find that in that situation, there is nobody there who is qualified enough to build such a dialogue at all. Things are different in luxury, for example because we mainly deal with our clients face to face. I haven’t met every diamond salesperson on the planet, but after thirty years I can recommend only three who are able to do a good job.


Dichter, following the tradition of behavioural psychology, faced an ethical challenge. Behavioural psychologists deal with our ugly hidden secrets that we try to repress. Taking these theories into marketing, there was always a sense of trying to manipulate the customer using sophisticated methods. Since Dichter was aware of this possible negative manipulation he tried in his books to persuade readers that this was not the case.


However, are our motives based on these ugly hidden, archaic and primitive motives? I don’t think so. The role of these unchanged, hidden values is to help us find our ultimate goals that are worth pursuing. Such a noble task cannot be based on ugliness and cruelty but on something very pure and beautiful. One man to address this in a professional way was Victor Frankl, the father of Logotherapy whose approach was to search for real meaning in life. Yes, this search puts the responsibility of searching squarely on us. We, as consultants, cannot advise because this takes away the responsibility from our client. Our job is to guide them to face reality, to discover their beauty within and to use it for self-development.


The marketing of luxury is a challenge. It is very easy to manipulate people to spend more and more; neuroscientists show that by acting this way we manipulate the region in the brain called Nucleus Accumbens which is responsible for our pleasure and laughter but also for addiction, fear and aggression. However, other areas in the brain can be influenced which are responsible for altruism, for example. As a marketer, understanding this and choosing the right way to use this is key to sales. And it needn’t all be about fear – when we manipulate the positive values of man then we can create through marketing someone whose self-esteem is enhanced, who is more refined, and who cares for the world around him.

Luxury Condos says of this article...

This is an interesting article. With competition so tough these days, marketing of luxury goods, services, and properties is difficult. Understanding the market is tricky but it will definitely help to reach your goals. It can be time consuming but yes, there are great rewards for those who patiently do their homework. Cheers!

Isaac Mostovicz says of this article...

All what counts is whether customers exist. If they do exist a good research will find them, tell you how to communicate with them, what media to use, etc. If you feel that the time is tough maybe it worth changing your strategy a bit?

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Doing or Being?

Isaac Mostovicz writes that marketers must focus on understanding what motivates their customers above all else ...

I recently gave a keynote speech at an international conference in Lisbon, Portugal. The topic of the conference was “Marketing & Consumption: What future?”  I offered a variation on this topic which discussed the way marketing heads are discussing, “Marketing: quo vadis?”


Reflecting on luxury, I think that we sometimes err in our thinking. We believe that if we could only define what marketing or luxury or brand are, we’d have found a Holy Grail. Thus, with the mysterious exception of luxury, many articles and textbooks try to create as accurate as possible definitions of what marketing or brand are. The question is, of course, once we have a definition what can we do with it? The answer is very obvious – nothing.

Isaac Mostovicz presents at the “Marketing & Consumption: What future?” conference

Well, some of us enjoy knowledge for the sake of it and there are experts in brands and marketing just as there are experts in medieval Mongolian poetry, pre-historic music or other esoteric topics. However, when we want to put this marketing knowledge to use, we fail. One of the leading journals in marketing checked how many practicing marketers research their field or read the findings that appeared in that journal, which claims that its audience consists of both academia and marketing practitioners. The answer was, as you might expect, that nobody cares to read or learn what those findings are.


In my opinion, we make the cardinal mistake of asking the wrong question. The question is not what marketing is but what marketing /brand/ luxury does. How does it affect us, what benefits do we draw from it and how can we properly use this knowledge? This question is not simply a different question but indicates a mindset that is opposite to the one prevailing in academic and practitioners’ circles. While trying to understand what a term like marketing is reflects on us and on our egoistic satisfaction, asking what something like marketing does recognises that there is a world around us that we need to satisfy, that we want to affect and influence and that we need to consider first.


Others agree with my approach, e.g. Ernest Dichter, the father of motivational research that changed the landscape of US marketing . Additionally, in 1960, Theodore Levitt published “What is Marketing?”, arguably the most popular article to appear in Harvard Business review of all time and said, “when a customer asks you for a ¼” drill he actually asking for a ¼” hole”. Both of them told us that marketing starts with knowing who your customer is and what they want. However, despite the sound nature of this simple idea and vast empirical proof, marketers are not as focused as intensely as they should be on what emotions are driving their customers. When checking who the customer is, marketers must look at the deeper psychological layers that motivate the customer to choose one product or option over the other.


This lack of customer insight is widely apparent, and to cite the recent Goldman Sachs example, it’s clear that treatment of customers can range from extremely bad to extremely good.  To take myself as an example, I would not choose Goldman Sachs as a financial provider because they are apparently untrustworthy, but it’s possible that they employ managers that are genuinely nice people who have merely acted in an untrustworthy fashion. In this way, my motivation for choosing a product has been selecting what I perceive to be a “good” brand (if such a one exists) over a “bad” one.


To use a different example – Blackberry, iPhone and Android phones are all excellent products but customers will choose one option over the other equally good option. In this instance, as marketers we should understand what the parameters are that have made each customer identify with the different product. The assumption is that the customer who wants a BlackBerry doesn’t want an iPhone – I know that some people prefer the Android operating systems over those of the iPhone, for example. Nevertheless, they might advise me to buy an iPhone since my psychological needs are totally different to theirs.


When dealing with my own customers I always ask, “Who is your customer?” and gradually, people start to realize that they cannot describe him or her to me. What I am actually looking for is a description that allows me to identify the typical customer according to defined parameters, but it seems that nobody can describe what those parameters are. For example, one client told me that he has 10,000 customers. But he was actually referring to 10,000 people he has served in his shop at one moment or another. Yes, they were his customers in the past but can he consider them future customers? Will they visit him the next time they shop? Past performance is not a guarantee for future success.


Another question I ask them is what the needs of their customers are. Of course, every jeweler will tell you that their customer is looking for jewelry and every owner of a shoe shop knows that people come to their shop to buy shoes. But does the shopkeeper know what motivates the customer? Can he recognize their deeper reasons for wanting a particular product? When dealing with my customers, most cannot answer this simple question or, in Theodore Levitt’s words, my clients know that the customer wants a ¼” drill but they do not know what the ¼” hole looks like.


Brand consulting suffers from a similar problem.  A typical request that one of my clients made was that “we need to be differentiated and we need branding”. I told him that the cheapest and quickest way would be for his entire company to paint their faces green – that would differentiate them and even attract a lot of media attention. Actually, my client realized what his company’s problem wa – all the companies in his industry (hi-tech) look the same. He failed, though by spelling out only half of the problem. While he wanted to be differentiated, he did not consider the situation through the eyes of his clients or consider how this differentiation would address his client’s needs. Well, this is the just the beginning.


Brand takes us one step further. When I asked this client to describe his customer of choice and to use a real-life example, his face lit up and he told me about two of his preferred customers. He quickly told me that it was not the money his company earned on the deals that was important to him, but the bond he created with these customers. Not all our customers are those we would like to work with and not everyone is our customer of choice. It is not enough to know who our customer is or what his needs are. We need also to know who we are and what our needs are. If we manage to match our needs with those of our customers, then we have a strong brand. Do we need to differentiate? Not exactly. What we need to understand is that if we really want to interact with only those who share the same worldview and deep needs with us, our market is limited. A brand’s profit does not come from sheer volume of sales but from our ability to address the needs of our customer of choice in a way nobody else can – because we truly and intuitively understand their needs.


Luxury marketing is the ultimate test. Luxury is the behavior of needlessly overspending. We cannot begin marketing if we do not intimately know who our customer is and what their needs really are. Describing luxury behavior as needless tells us that those needs are much deeper and cannot be logically explained. Do we know what they are and do we know who our customer is? Can we describe the parameters that will allow us to find our customers? In terms of our brand, are we proud about what we offer? Will we be able to look back when time arrives and say that we believed in what we were doing? Luxury strips away all superficial logical arguments and asks us to delve deep and to face the real questions. Do we know how to do this?


Apple is the rare example of a brand that does know how to do this. It really understands its customers and that is why its fans are so loyal. The brand also develops its products according to the needs of its customers. The fact that their systems are a “walled garden” to other technology companies and that each application for the iPhone requires Apple’s approval is not mere greed, but based on a deep understanding of their customers’ needs.

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The classic rules of “exclusivity, rarity and scarcity” must be adaptable

Isaac Mostovicz writes that one size may not fit all when it comes to luxury marketing ...

A recent article in Marketing Week describes how the luxury goods sector, as one of the few within general retail that has endured the muted financial environment, is marketing itself to its customers. Brands such as LVMH continue to post excellent profits and consider their outlook for 2012 as “excellent” whilst ordinary high street retailers struggle.

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As a result, more and more brands are reaching upwards to try and appeal to these high net worth consumers. But some marketers claim that there’s no secret formula to attracting the attention of luxury purchasers – and that tried and tested is the best way forward.


Peter Cross, business partner of Mary Portas at the retail branding agency Yellow Door comments that while luxury purchasers are now more open to value purchases and more discerning of what they actually buy, traditional luxury marketing is still very much at the fore.


True luxury is still based on exclusivity, rarity and scarcity,” he says.


By making their most valuable customers feel special and singled out – for example, through special “gifts” that may not be available to other consumers – marketers are able to generate emotions of goodwill, rarity and exclusivity – as well as word of mouth from their customers.


Looking at this from the point of view of Janusian thinking, it could be argued that this classic “exclusivity, rarity and scarcity” tactic will affect one type of Janusian personality differently to another.


Lambdas, who seek achievement and uniqueness as an ultimate end goal, are likely to be very influenced by an individual, personalised gift or product as this will help them to stand out against the crowd – a key goal for Lambdas. Thetas, on the other hand, who generally seek acceptance into their social crowd, may find this technique attractive as it will help to establish themselves within their specific social class.


Within luxury marketing, one size does not fit all and marketers must remember that overarching “rules” may not suit every brand when considering a tailored strategy.

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Retailers keen to bond with affluent Chinese consumers

Isaac Mostovicz writes that the Chinese high net worth seek a different kind of relationship with luxury retailers ...

A recent article in the Financial Times discusses how Western retailers are attempting to capitalise on the Chinese love affair with luxury and woo high net worth consumers from that region.


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To coincide with the Chinese New Year, Affinity China, a luxury club for the wealthy Chinese organised a tour of New York where several brands “hosted” their high net worth visitors – among them Mont Blanc, the pen maker, which treated the shoppers instore to a recital by Lang Lang, the Chinese pianist.


These kinds of tailored experiences are just one of the ways that upscale Western brands are trying create and nurture relationships with affluent Chinese shoppers – and are discovering where the differences in these consumers’ attitudes lie.


Even when luxury stores accommodate Chinese shoppers by hiring Mandarin speaking staff and accepting the China UnionPay credit card, there are still contrasts. China engenders a “natural distrust” of overeager sales associates and many of the rich guard their privacy carefully – meaning that the cosy relationship Western luxury brands try to initiate with their most affluent customers is not a viable route.


Furthermore, as the desire for more flashy means of demonstrating their wealth recedes, there are many Chinese millionaires who are now interested in the provenance of their goods – or rather, what justifies the high price tag attached to them.


As per previous posts on this blog around the Lambda / Theta distinction of luxury shoppers, these kinds of Chinese consumers could be classed as Lambda – who see the item’s value not in terms of price, but rather, in terms of craftsmanship.


Victor Luis, president of Coach’s international business comments of these shoppers: “They are interested in understanding the history of the product, how it’s made, the quality, how to take care of the leather. ”



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What Wealthy Consumers Look for in Luxury Brands

Isaac Mostovicz writes that affluent consumers look for different attributes in their luxury goods ...

What do high net worth individuals look for in their goods? A recent study from the Luxury Institute has identified what attributes of luxury products affluent consumers value the most. Analysing wealthy consumers from across the globe with a minimum annual income of $150,000, the study found that the top attributes that they value are superior quality (73%), followed by craftsmanship (65%) and design (54%.)

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Customer service is a key brand attribute that was cited by 47% of correspondents – and interestingly, one of the most important to Chinese consumers who cite it as a one of the main considerations. However, it’s also one that US consumers feel has deteriorated in recent years (34%,) alongside craftsmanship (17%.)


In China, however, satisfaction levels remain high. In the world’s most rapidly growing luxury market, 63% of affluent consumers say that customer service has improved and the vast majority applaud higher quality, craftsmanship and design.


Previously on this blog, entries have explored the success of those brands that tap into their customers’ emotions, providing a positive experience and remaining relevant to their contemporary customer through multichannel platforms such as social media.


At Janus Thinking, consumers are characterized into two different groups – or world views – Lambda and Theta, which explain how our different personality types influence our choice and perception of luxury.


The Lambda personality will see an item’s value not in terms of price, but rather, in terms of craftsmanship. If the item has taken a long time to make, is unique or has a story behind the item’s creation then it is more likely to be valued by a Lambda. On the other hand, if the item is attractive, and something that’s likely to establish them within their preferred social class, it will be valued by a Theta.


While the luxury industry identifies what attributes customers value in their goods, it is a good time for brands and retailers to understand how consumers’ core differences can assign different values to luxury items.

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Made in Britain: flying the flag for UK brands

Isaac Mostovicz writes that luxury names like Burberry are British not only by brand ...

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A recent article in the Sunday Times writes that manufacturing is on the rise in the UK, particularly when it comes to the creation of luxury goods. It reports that a number of high-end fashion houses are using not only British materials to create these goods but are also using UK factories to manufacture them.

British success story Burberry hand-makes its trench coasts in Castleford, Yorkshire. Pringle, the Scottish knitwear retailer, creates its goods in a factory in Hawick, Scotland. And it’s not just UK brands that are sourcing and manufacturing in the British Isles – even the European and American fashion houses such as Chanel, Prada and Ralph Lauren manufacture their own cashmere, tweeds and shoes in the UK.


As provenance becomes less of a marketing term and more of an intrinsic demand for affluent consumers, the appeal of manufacture in the UK becomes obvious. Buying a British-made product is seen as akin to buying a quality investment piece, with lasting appeal.


Says James Eden, managing director of English outerwear brand Cooper & Stollbrand: “People want more understated, credible garments that are steeped in authenticity.”


Sustainability is also a key factor of “buying British.” There are no ethical concerns for either manufacturers or consumers around UK labour laws as with lesser economically developed countries; all goods are created under EU labour directives. And of course, the amount fashion miles within the supply chain are significantly reduced compared to manufacture in the Far East.


There are a number of factors that influence consumers’ buying choices – at Janus Thinking, these consumers are separated into two categories; Lambda and Theta.

For a Lambda, the provenance of British goods would be the key attraction – knowing that they are purchasing a product with an impressive history embedded within it. For a Theta, the appeal would come from the high-end brand and the well-known cachet of “buying British” amongst their social group.


All of this would mean little without significant demand for products that are “Made in Britain;” however – Burberry’s recent financial results indicate that their appeal is not only widespread, but looks likely to continue.

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Richemont Luxury Group Fires up in the Chinese Year of the Dragon

Isaac Mostovicz writes that the Chinese Year of the Dragon may be significant for luxury retailers ...

A recent article in the Wall Street Journal wrote that Richemont, the Swiss luxury goods group, has reported third-quarter sales of €2.6 billion ($3.3 billion) – in no small part down to its Asian, and in particular Chinese customers.


Image courtesy of Luxos

The Asia-Pacific region cemented Richemont’s position as one of Europe’s most important luxury manufacturers, with results of €1.05 billion, 36% up from the previous year. However, it is not only the domestic Chinese market that is prompting such strong profits. Sales in Europe also rose 16% to €914 million as Chinese tourists are purchasing the group’s goods – with items such as Cartier jewellery and Jaeger-Le Coultre watches finding favour – whilst visiting European cities such as Paris, Rome and Geneva.


Bernard Fornas, chief executive of Richemont’s Cartier brand commented: “The number of Chinese tourists is growing… and will help to “cushion the landing” in case things get worse in Europe’s economy.” 


As previously discussed, South-East Asian demand for luxury looks set to continue. Sparkle Roll Trading Development, a distributor of luxury goods in China, has five boutiques in Beijing and Shanghai selling Richard Mille and Parmigiani watches – with the average Parmigiani watch costing around 68,000 Swiss francs ($71,882).


“Sales are really good at the moment. At one of our boutiques we sold 60 watches in one month,” commented Mr. Firth, Sparkle Roll’s Chinese Marketing Director. By comparison, their stores in Europe sell on average five or six watches a month.


The year 2012 – which in Chinese horoscopes is the Year of the Dragon – is also affecting luxury sales. Chinese New Year is on January 23, with the emblem of the dragon being symptomatic of wealth, royalty and nobility. To celebrate this, independent watchmaker Parmigiani has created a dragon clockwork automaton crafted of white gold, imperial green jade, rubies, sapphires and a diamond.


At Janus Thinking consumers are characterized into two different groups – or world views – of Lambda and Theta, which explain how different personality types influence our choice of luxury.


The Parmigiani automaton might appeal to Lambda consumers due to the level of its craftsmanship, its uniqueness, and the fact that it there is a meaningful story behind its creation – rather than because of its price.


Theta consumers, however, will be attracted to such an item as it is a one of a kind, high-end design, and its high price helps to establish them within their preferred social class. Thetas seek acceptance, and their purchases reflect that.


Priced at 3.5 million Swiss francs ($3.7 million,) regardless of whether Theta or Lambda, its purchaser will no doubt have a strong affinity with the symbolic dragon.

[…] giant the Richemont Group is approaching the Year of the Dragon in his post for Janus Thinking: READ POST HERE […]

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The Psychology of Consumption and the Birth of Modern Marketing

Isaac Mostovicz writes that that our subconscious psychological impulses may affect our buying habits more than we believe, according to Ernest Dichter...

A recent article in the Economist describes how Ernest Dichter, “the Freud of the supermarket age,” transformed marketing in the USA through his behavioural research and ground-breaking ideas around the role of the unconscious in sales.


Dichter was convinced that traditional analysis of consumers (at the time carried out through speculative and somewhat slapdash polling techniques) offered very little insight into buying psychology and presented a limited view of what makes consumers opt for one product over another.


Rather, by advocating in-depth psychoanalytical research in lengthy interviews, Dichter gathered that subconscious urges and socialized inhibitions are what affects consumers’ buying habits. Furthermore, Dichter understood that possessions are extensions of our own personalities, serving as “a kind of mirror, which reflects our own image.”


I have argued previously that luxury marketers must focus on the human characteristics that drive consumers. By a simple characterization of consumers into two personality types – Theta and Lambda, I created a dichotomy that allows marketers to better understand how consumers behave according to their values, unconscious motives, and desires.


The Theta personality seeks affiliation and control as an ultimate life purpose, so they seek acceptance to fit in within a desired group and use socially-derived understandings of product characteristics as a basis for their consumption.


Lambdas, on the other hand, seek achievement and uniqueness as an ultimate end goal, and so are more likely to interpret products based on their individual responses to the product, how it helps or prevents them to stand out, and how the product benchmarks against their regular consumptive patterns.


Today, in addition to the empirical analysis marketers carry out through geographic location, gender and income, new research and developments based on neuroscience show that Dichter’s insights are coming back into fashion.


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Between organisational behaviour and luxury

Isaac Mostovicz writes that luxury is remedy to help us understand our behavioural psychology....

I am often asked about the connection between my two areas of interest, namely organisational behaviour and luxury marketing, since they seem not to have any connection at all. My response typically points to the gap between two schools of psychology, one of which is called behavioural psychology and the other cognitive psychology.

The behavioural school is closely linked to people’s physiology and reflexes. It gained wider fame from the experiments of Ivan Pavlov who caused his dogs to salivate whenever they heard the ring of a bell because of its association with feeding time, despite some having had their throat slit and being unable to eat. Pavlov influenced two well-known American psychologists, J.B. Skinner and J.B. Watson, who followed his experiments and further showed that it is possible to influence behaviour.

Most of us are now familiar with the result of this school of behaviourism. Marketing campaigns are mainly based on the findings of this school, and we are constantly influenced to purchase one product or another. The fashion industry uses this knowledge as well by telling us how to dress, and celebrities are used as role models to put social pressure on us to copy their behaviour.

However, under the surface runs a different current. Many of us were brought up on the idea that “money talks”. After all, were we not incited by sales and discounts of all kinds, the industry would have abandoned this practice long ago. However, many studies show that monetary incentives do not play an important role in people’s decision-making. When asked, people place cost and other similar money matters at the bottom of the list even when choosing a bank. So who is right in this debate? Is it the researchers looking at cognitive views or the marketers who influence behaviour by offering us sales and discounts?

The answer is that both researchers and marketers are correct. There is a gap between what we say and how we act. While we say that money does not matter, we behave differently and we are enticed by monetary offers. I recently met an executive who explained this phenomenon succinctly. When commenting on the huge bonuses that executives receive, sometimes even when their company fails, he told me that even when people receive these fat bonuses their heart tells them a different story. By referring to people’s hearts, this gentleman actually talked about our values and worldviews which are not in sync with our behaviour.

So, how does out heart function? Back in 1955, George Kelly published his seminal work, The Psychology of Personal Constructs, based on his 25 years of clinical experience. This work describes how people interpret and anticipate their personal experience. Kelly was able to describe the rules upon which people interpret and the meaning they attribute to the events in their lives. Explaining the meaning and interpreting events is a verbal exercise and as Kelly noted: “If you do not know what is wrong with a person, ask him, he may tell you.”

However, the language we use to describe our experience is metaphorical. That means that we do not express the meaning we give to an event in a mere poetic way and even our conceptual system that is guided by our values is metaphorical, emphasising certain aspects and hiding others. In other words, different people will explain their worldview in a different language that reflects their values or conceptual system.

Our conceptual system is not something of which we are usually aware. One of Kelly’s last students, Dennis Hinkle devised a system to record this conceptual system. In my research, I provided the structure of this system and showed that two systems identical in structure, yet opposing in meaning, exist. I named one conceptual system Theta and the other one Lambda.

Looking at the behaviour manifested we now have two types of worldview to explore. The first one is the actual one which is influenced by all kinds of bias. Part of it is social and part of it results from a lack of awareness of our conceptual system and an unwillingness to follow it for various reasons. My research into organisational behaviour reveals the magnitude of that bias, which comes at a dear price. Not only does it cause personal damage leading to many phenomena of physical and psychological disorders such as addiction, neuroses of various kinds and more.  Acting not according to our values and worldviews damages the very fabric upon which our society is based and leads to social destruction and to corporate disintegration.

On the other hand, luxury enhances our awareness of our value and conceptual systems. When we use luxury, we pit our actual behaviour against our belief system and worldview; we become more aware of our worldview and act accordingly.

Hence,  I believe that whilst research into organisational behaviour highlights the tension between the two behavioural systems, luxury offers us the needed remedy.

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The dark side of rationality

Isaac Mostovicz writes that rationality and logic only offer one aspect of a solution; human values also need to be understood....

Last month I attended the 10th European Corporate Governance Conference that focused on making corporate governance more effective. In addressing the many burning problems that the corporate world suffers from, many speakers offered a utopian, logical and rational solution. Unfortunately, nobody from the world outside the few people who attended the conference will ever pay attention to this. This happens again and again. Scholars point to flaws and have a wishful thinking that if we were to learn the lessons they teach and impose the rules they advocate, the world would be a better place.

Well, people won’t change and even when they listen they will not internalize the lesson and consequently, the world won’t change. For 2500 years we have been told that if we act rationally and logically we will understand the world. Yet even after Freud told us that we have to deal with our sub-consciousness and that nobody is immune from social bias, scholars still believe that it is possible to change this world if only we were acting rationally and logically.

At that conference, and on other occasions, I argued that my colleagues fail to recognize that we do not deal with computers or psychopaths or some economists and lawyers who seem not to have emotions and values. We all love and hate, motivated by our hidden agendas that sometimes we are not even consciously aware of. That is the essence of human material and if somebody doesn’t feel comfortable with everything he only has to look for some extra-terrestrial creatures to do the job.

On the other hand, I also claimed that we need to understand humans. If they are motivated by their deeply held values then our role should be helping people act upon those values and according to their worldviews. We do not follow our inner voice and when we listen to it we bias its recommendation. In fact, our ability to argue logically and rationally allows us sometimes even to act in ways that oppose our values and our worldviews while justifying our actions as being in line those values.

Rationality and logic are helpful when solving a problem that has only one correct answer; when we have to distinguish between good and evil. However, most of the issues we face are a matter of choice which can be as simple as choosing a dish from a menu to choosing a spouse. Choosing between two good options is what makes us human and the mechanism of it is totally different from that of logic and rationalism. It is underdeveloped and obscure and causes us to make wrong choices. Adding logic to it just turns our wrong decision into an unsolvable mess. It is time for change, not in the world but in ourselves. Let’s start to listen to our inner voice, act according to our deeply held values and behave in line with our worldviews. If we start moving in this direction we will not suffer from so many problems in corporations, politics or elsewhere.

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