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Who says you can't judge a book by its cover?  Writing in the Minneapolis Post, Susan Perry reports that people can tell whether another person is a Republican or a Democrat by simply looking at that person’s headshot.  She says a recent study found they can do it with remarkable accuracy (more than by chance guessing) by relying on stereotypes. Republicans, apparently, look “powerful” in our minds, and Democrats appear “warm.”  The story is here and the full study is here.

Roger Martin (no relation) over at the Harvard Business Review thinks President Obama has "an integrative brain," which he believe is the hallmark of successful executives and not so common.  The full positing is here.  Personally, I'm happy to have a president with any kind of brain.

It seems that mating affects people's decisions about spending and giving. A recent study says that mating increases men's conspicuous consumption and women's conspicuous charity.  Both sets of behaviors seem to be signaling behavior designed to attract the most suitable mates. Now I know why I broke my budget during my dating years.  Of course, it also helps explain why my wife agreed to marry me -- it was an act of charity.  A report on the study is here.

Add this to the pharmaceutical industry's woes -- placebos (sugar pills) seem to be getting more effective.  Or at least they're beating the industry's newest drugs in late-stage trials at an increasingly alarming rate.  Wired has the story here.  In response, the industry has launched a massive effort to better understand how placebos unleash the brain's healing mechanisms.

Obama's Golden Ear

Obama ear President Obama's State of the Union speech demonstrated once again that a great orator doesn't need a silver tongue, but a golden ear.  

He struck just the right tone because he is in perfect sync with the country's mood (some would say belatedly). 

Obviously, he understands that people are worried about jobs. In one hour, he said the word about every two minutes.  

But his pledge to change the way Washington works reflected a deeper understanding of what is bothering people.  Yes, they're worried about the economy, but more worrisome, they have also lost faith in the system that is supposed to deal with it. 

93 percent of American voters told a recent NBC/Wall Street Journal poll  that politics has become "too partisan." 

That's as close to unanimity on a political issue as I expect to see in my lifetime.  And it's troubling because political partisanship is not only a formula for gridlock, it sucks trust out of the system.

What accounts for such partisanship?  Recent research shows that our natural inclination to associate with those who agree with us has been magnified by the fragmentation of media channels.

For example, research by the Pew organization indicates that Fox News' audience Is 16 points more Republican and 11 points less Democratic than the public at large, while MSNBC's is 10 points more Democratic and 12 points less Republican than the public.

Furthermore,  in a separate Pew
study, 63% of those who cited Fox News as their main source of news either identified as Republican or leaned to the GOP, which was 27 points more than in the general public.

Finally, a
poll by Public Policy Polling shows that Fox News is the only news network "that more people say they trust than distrust. 49% say they trust it to 37% who do not."   Look for Fox to challenge CNN on its tag as "the most trusted name in news."

Sadly, this phenomenon is not limited to the electronic media.  A study in the June 2009 issue of the journal Communication Research found that people spend 36 percent more time reading articles that agree with their point of view than those that challenge their opinions. Even when people read articles that counter their views, they almost always balance that by reading others that confirm their opinions.

If you only pay attention to messages you agree with, you are likely to become more extreme in your viewpoints, because you never consider the other side. Furthermore, you are less likely to keep your opinion to yourself.  Recent research at Ohio State University shows that people with relatively extreme opinions are more willing to publicly share their views if they have a sense that they are in the majority even if they aren't.

For example, if a group leans moderately in one direction on an issue, those who take an extreme version of their group's viewpoint may believe that they actually represent the true views of their group. That gives them all the encouragement they need to express themselves, kicking off a cycle that feeds on itself.

The more people hear extremists expressing their opinions, the more they believe that those extreme beliefs are "the norm" and the less likely they are to seek political compromise.

Since political activity is a choice and inactivity is the norm, all of these phenomena show up most dramatically in our electoral system. A Harvard University analysis of Congressional elections from 1993 through 2000 shows that our system of primary elections tends to produce candidates with extreme views for the simple reason that voters in primary elections tend to be more ideologically extreme than those in general elections.

According to the analysis, "The more extreme the primary voters are in a district, the more extreme (or off- median) the candidates in the general election will be. Yet when an electoral district is closely contested, the probability of a change in party control is greatest, which creates a strong incentive for previously non-mobilized potential activists have to become involved in primary elections.

"Competitive two-party districts, when subjected to two-tiered elections and the selective participation of political extremists, tend to bring about extremist candidates. The irony is … that political extremists in Congress are more likely to arise out of centrist and two-party competitive districts, rather than out of districts dominated by one party or the other."

Obama's State of the Union speech asked partisans in Congress from both sides of the aisle to free themselves from this trap.  We'll see if they tuned in. 

Quick Links

Links Justin Fox channels Milton Friedman on the recent Supreme Court decision opening corporate coffers to political campaigning. If companies are allowed to play a decisive role in setting "the rules of the game," Fox argues, "the inmates are in charge of the asylum."

PR firn, Edelman, issues its annual "Trust Barometer" in time for the Davos Economic Conference. This year's edition shows that trust in business and government is rising slightly, at least among the "informed publics" interviewed. Not surprisingly, banks ranked towards the bottom of the list of trusted institutions, falling from 71 to 33 percent over the last two years. 

"At what distance from misery can you see yourself having a good time? Is it 100 miles? Or 250, or 1,000?"  David Berreby explores what a luxury cruise line's decision to dock at a beach in Haiti reveals about the human mind.  Empathy appears to be a function of distance.

Change the channel on Uncle Miltie

Uncle Miltie.033 The Uncle Miltie in question is Milton Friedman, the late Nobel Laureate in economics who defined a corporation's purpose rather narrowly as making money for its share owners, all within "the rules of the game," of course. 

Unfortunately, recent economic events have proved that referees are not always vigilant, players sometimes use company money for their personal pleasure, and the game itself is sometimes rigged. 

My own view is that Friedman had the purpose right, but he defined the beneficiaries too narrowly. Companies exist to create wealth, but not just for its so-called "owners."

Friedman focused on a company's owners because they provided the capital to set the company up in the first place. So far so good, but many other people contribute resources to a company's success and assume the risks of its failure.  In addition to its investors, I would count its employees, customers, suppliers, and the communities in which it operates. It is not speaking metaphorically to say that the company exists to create wealth for them too. 

On a practical level, it is increasingly difficult to even find a company's owners. When Friedman began his illustrious career, stock ownership was relatively concentrated.  Today, it is widely dispersed and volatile. The average mutual fund turns over nearly its entire portfolio every 12 months. 

Furthermore, thinking more broadly about a company's purpose can actually benefit its performance. That's the point Rosabeth Moss Kanter made in her book  Supercorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good. For a quick summary, see an interview she recently gave Wall Street Journal.

Scott Brown's truck

Scott Brown Jonah Lehrer may have figured out why so many powerful people seem to act so hypocritically. 

In his excellent blog, "The Frontal Cortex," he suggests it may be because "power makes us less sensitive to the needs and feelings of others - it silences our empathy - and so we only think about our own motivations and needs." 

Social scientists have long suspected that our  our sense of fairness is rooted in feelings of empathy. (I personally think it's the other way around, but in any case, it seems logical that people who are isolated from others because of their "special status" would be less able to put themselves in their place.)  

Seen that way, Scott Brown's pickup is a graphic way to signal that he has the same tastes and interests as his constituents. And it may also explain why President Obama tends to drop his "g's" when speaking at large rallies, even if they're on his teleprompter. 

First Anniversary

First anniversary

This week's New Yorker celebrates President Obama's first anniversary in office with a Barry Britt cover that captures the situation nicely. 

Whether measured by the recent senate election or by the president's declining favorability ratings, it seems clear that Obama can no longer walk on water.

But "favorability" ratings can be dangerous when read in isolation, like the "net promoter" score that so many marketers use.

What really matters are the reasons behind the score.  For example, I tracked employee attitudes toward AT&T during the tumultuous period of 1995 to 2000. You may recall that this period included the three-way breakup of the company, reports of massive layoffs, resignation of a CEO-apparent, hiring and firing of a CEO unapparent, $100 billion acquisitions,and ultimate breakup of the company.  

AT&T Going In Right Direction AT&T Going In Right Direction  But through it all, when we asked employees whether or not they thought the company was going in the right direction (yellow line), the strongest correlation we could find was with the company's stock price (red line), as portrayed in the chart to the right. 

When we dug deeper, we discovered that was due to two things: 1. the actual stock price; we had given employees stock options and many had substantial shareholdings, and 2. what the media was saying about the company's stock; as its price went down, the media grew increasingly negative, putting additional pressure on the stock and raising even more questions in employees' minds.  What we should have done, of course, was to define progress on our strategy in terms other than the stock price from the very beginning.  

If we had started by acknowledging the scale of the transformation necessary for the company to succeed, made clear that it would take at least five years and billions in investment, and cut the dividend immediately rather than four years down the road, the stock price would have taken a hit.  But it probably wouldn't have gone down as much as it ultimately did.  And we could have given employees and share owners a set of realistic milestones to follow.

Obama's first year I was reminded of all this when I read John Judis in the New Republic.  He prepared the chart to the left that shows how closely the decline in Obama's approval rating (red line) tracks with the national unemployment rate (blue line).  

But he also notes that, "when Washington began debating the health care plan in earnest last fall, the president's level of disapproval began to exceed the rise in the unemployment rate."

Judis doesn't think that was a coincidence. "Obama invited a voter backlash," he writes, "by letting the burden of reducing health care costs appear to fall on senior citizens and middle class workers." I think he's right.

By setting broad policy goals but leaving the drafting of legislation to Congress, Obama allowed others to frame the argument for healthcare reform.  As a result, it became a debate over "death panels," "abortion rights," "Cadillac health insurance plans," and "a government takeover of healthcare."  All while the middle class was worrying about something else entirely -- jobs.

Obama needs to regain control of the discussion, focus it on the economy in a way that resonates with the middle class, and reflects real bipartisanship.

It's the process, stupid!

Poxonhouse My Republican friends (I think I still have a few) shouldn't take too much comfort from my previous post.  The Washington Post released a poll over the weekend confirming the anger behind Scott Brown's victory in the Bay State senate election. But it also made this point:  

"Among Brown's supporters who say the health-care reform effort in Washington played an important role in their vote, the most frequently cited reasons were concerns about the process, including closed-door dealing and a lack of bipartisanship. Three in 10 highlighted these political maneuverings as the motivating factor; 22 percent expressed general opposition to reform or the current bill." 

The GOP Congressional leadership made a calculated decision to play rope-a-dope with the president to block his agenda and ultimately win seats back in the mid-term elections. Some have misread Brown's election as vindication of that strategy. In fact, the election of a relative outsider may be the Bay State's way of saying "a pox on both your houses."  Kind of what they did in 2008.

Finger on (and from) Massachusetts voters


The cartoon to the right, by Ted McCagg, is the best summary I've seen so far of the recent senatorial election in Massachusetts, my home state.

It helps explain what Scott Brown's victory really means and, by implication, why it happened. 

Brown didn't win because voters are suddenly abandoning the Democratic party to become Republicans.  While "Democratic leaning" voters have a 30-point advantage over those leaning Republican, the majority are in fact registered as Independents or in the state's parlance "unenrolled."  Indeed, Brown did not run as a Republican.  The closest he came to referencing his party affiliation was to point out that he would be the "41st vote" in the Senate against a Democratic steamroller.

Brown didn't win because his opponent ran a bad campaign, because Bay State voters oppose universal healthcare, or because they are souring on Obama.  There are elements of truth to all those assertions, but what put Brown in the Senate runs deeper and has more of an emotional cast, than rational.  He won because voters want to send a message to Washington

Their message is one of deep dissatisfaction, bordering on cynicism, with Washington's partisan ways.  An NBC/Wall Street Journal poll uncovered this change in public attitude last November.The poll asked people how much of the time they trust the government in Washington to do the right thing; 65% said "only some of the time" and a stunning 11% said "never."  

The Journal points out that pollsters have been asking that question for decades, but "the last time the numbers were even comparable was in the midst of the last great recession, in 1982."

The Journal's Gerry Seib has a theory about all this.  "Americans certainly want their politicians to debate strenuously about important issues," he writes, "but they also want them, at the end of the day, to figure out a way to compromise, come together and solve problems. That's particularly so in times of crisis." 

I think Seib is right. That's where politicians have let us all down. And Bay State voters understandably -- and appropriately -- have given Washington the finger for it.

Burger King Brew

Burger king beer Burger King has started serving beer at a new restaurant in Miami's South Beach.

Customers can get a brew, Whopper and fries for $7.99. But I don't think the main idea is to offer higher-priced beverages.  While McDonald's built its franchise on appealing to children and Arby's, on serving adults, Burger King has tried to appeal to the out-sized appetites of male adolescents.  

Of course, the King doesn't define "adolescence" in chronological terms. It's more of an attitude and a set of behaviors, typical of males from 18 to 24 years old.  And Burger King does not want to repeat the missteps of The Gap by failing to grow with its core audience.  Enter the beer taps.

Into Dangerous Territory

Supreme-court  Last week's Supreme Court decision allowing companies to spend freely on political advertising could be one of the most significant reversals since Brown v. Board of Education

The 1954 Brown decision, of course, paved the way for racial integration and the Civil Rights movement by over-turning prior decisions sanctioning segregation in "separate but equal" school systems.  This latest decision reverses a century of court precedents that severely limited direct corporate funding of political campaigns, and it can only lead us into dangerous territory.  

I say this not as a constitutional lawyer, but as someone who once served the interests of a company that was already spending upwards of $60 million a year to influence legislation and regulation when I retired.  I've seen how corporate influence is accumulated and used in Washington, and it ain't pretty. 

Thanks to this new decision, corporate spending will clearly influence future elections, but the even more perverse effect will be on company behavior. As usual, David Brooks, put his finger on the real problem on the PBS Newshour yesterday. "What do corporations want (from Washington)?" he asked. "One, they want subsidies. Two, they want to crush small businesses who are hoping to compete with them by erecting regulatory hurdles."  

I can attest from personal experience that he's dead right.  Companies have always been able to get around the relatively low hurdles Congress set up.  They've funded political action committees, trade groups, and phony consumer groups to influence legislation.  Now, they will be even more brazen in using corporate money to stifle competition and the threat of increased regulation.  

What to do?  A law professor at Santa Clara University offers some context in the San Francisco Chronicle: "If we cannot restrain corporations from influencing our democracy," he writes, "then we must have more democracy in the management of our corporations." That's a good place to start.

Corporations exist to create wealth, not only for their "owners," but also for all who contribute to their success and bear the cost of their failure.  That includes their employees, their customers, their suppliers, and the communities in which they operate. Directors of publicly traded corporations should be required to become informed about and to deliberate on the interests of all these stakeholders.

Americans on Muslims

Warning-muslims-nearby Warning-muslims-nearbyThe Gallup World Religion Survey, just out, shows some disturbing attitudes towards Muslims amongst Americans.

  • Americans express more prejudice toward Muslims than any other faith group. Almost a third say they harbor "some" or "a great deal" of prejudice against Muslims.
  • Ironically, those who say they are prejudiced against Jews are the most likely to be prejudiced against Muslims.
  • Only about a third of Americans claim to have at least "some" knowledge about Islam, but more than half (53%) say they are at least "somewhat" unfavorable to it.
  • Fewer than half of Americans (47%) say they know even one Muslim, but it doesn't seem to make any difference on their attitudes toward "Muslims" in general.

The one thing that seems to affect people's attitudes toward Muslims the most is whether or not they themselves attend religious services frequently.  Those who attend more than once a week are less likely to be prejudiced against Muslims. 

All of this matters to anyone who believes in the power of person-to-person diplomacy. Prejudice against Muslims risks alienating the five to eight million Muslims in the U.S. who are potential partners in the fight against Islamic extremists. It also feeds the victim narrative that extremists use so effectively against us.

Priced to sell

Priceless Priceless: The Myth Of Fair Value (And How To Take Advantage Of It) is William Poundstone's eleventh nonfiction book and a prime example of two trends we will hear and read a lot more about in business circles -- evolutionary psychology and neurobiology. 

We may all think that we're rational beings, but the truth is that we are the products of evolutionary forces that prepared us for a very different environment.  In fact, many of our daily decisions are made at levels below our conscious awareness but in full view of a functional magnetic resonance machine.  

I've been gathering material for a new book on these subjects and will report examples in this space over the coming months. Many of the latest findings have significant implications for (and applications in) marketing, finance, human resources and every other business function.  Not to mention day-to-day life, as Poundstone demonstrates even on his book jacket, which is cleverly designed to incorporate a price tag.  The book's original price is listed there as $599.99.  In fact, it really sells for about $27, which seems like a steal thanks to the "anchoring effect" Poundstone describes so effectively in the book itself.

Domino's Mea Culpa

I've often pointed out that perception is not reality, even though it sometimes feels as if it is.  Perceptions can't be changed solely with the tools of persuasion. Advertising and PR campaigns seldom cure perception problems. The only way to fix perception problems is to fix the underlying reality.  

Case in point: Domino Pizza.  Rather than commissioning better TV commercials to change perceptions that its pizza tastes like ketchup spread on cardboard, the company decided to change its pizza. (They also changed the CEO, but that's another story.)

The company's new ad campaign is built around TV spots designed to attract viewers to a web site -- -- where they can view a four-minute documentary that shows customers trashing the old recipe and staffers reacting. Talk about transparency.  The strategy attracted attention from the likes of The Colbert Report and CBS's The Early Show.  

Domino's new CEO isn't worried about repeating the New Coke fiasco.  The big difference here, he points out, is that when Coca-Cola introduced New Coke, it was the number one soft drink.  In the world of pizza, alas, Domino's, ranks first in delivery but dead last in taste.