Book review: Alchemy, by Rory Sutherland

Rory Sutherland's new book Alchemy: The Surprising Power of Ideas that Don't Make Sense continues his 10-year campaign against the traditional, logical pursuit of business advantage, through a scientific lens that includes several cognitive economics themes. As ever, a curated series of amusing anecdotes about people or companies who took an unusual angle on marketing or product invention, fuel a philosophical wander.

That philosophy could be summarised as: if it makes sense, someone's already tried it. So try something that doesn't.

The ideas that underpin the book are broadly based on behavioural economics and cognitive science, with bits of evolutionary theory, statistics and old-fashioned advertising intuition thrown in. At first it doesn't look like a behavioural science book as such: the theoretical backbone takes a while to show. Rory's style is discursive: an after-dinner-talk of anecdotes, dismantling of conventional wisdom, ever-so-slightly outrageous assertions, and the periodic emergence of abstract wisdom in the third paragraph of a mid-chapter page.

Some of those smart insights include:
  • logical "engineering" solutions often do work, but given that nearly every problem in the world has had someone try to solve it with logic, the remaining unsolved ones are those where logic failed. So if you are working on a problem that still exists, try something illogical. (This is, perhaps, the generalised version of "look for where there are no bullet holes".)
  • people tend to focus on optimising the obvious features of a product: you can often find smart new solutions by shifting to a less obvious dimension. For instance, make a vacuum cleaner look like a cool piece of tech instead of just cheaper or stronger. If you can't make your plane take off on time, it may be almost as good to give reliable information about how late it will be.
  • it's useful to have a space, such as your advertising agency, where it's OK to ask silly questions and challenge long-established premises.
  • what people do with their money is often a better guide to their desires than what they say.
Many of the examples will be familiar to readers of Rory's earlier books, articles, talks or tweets - I'm sure I've heard twenty times about the value of making train journeys twenty percent more fun. But no harm in this - there are only so many good anecdotes out there, and why not squeeze maximum efficiency out of them. The CFO of Rory's brain would no doubt approve.

After an introductory section, the deeper scientific ideas behind the book start to emerge. Five concepts inspire a new set of marketing approaches: insights from statistical mathematics (ergodicity), cognitive economics (changing the value of things by changing the mental state through which they are interpreted), evolutionary theory (signalling and self-signalling), cognitive science (satisficing), and perceptual psychology (psychophysics).

This is where Rory's approach diverges from the typical ad guru. It's a complex-systems philosophy: the idea that systems of different kinds often exhibit similar structural elements or dynamic phenomena. Thus, a strategy that works for flowers might also work for brands. A statistical insight from the criminal justice system may also have value in planning public transport investments, or the pricing of airline tickets.

There is a strand of politics running through the book that emerges from Rory's iconoclastic style but will grate with some readers. While Rory is in many ways a liberal thinker, he sees liberal-centrist politics as too conventional and technocratic, and enjoys puncturing mainstream assumptions. Yet when he points out the failures of Hillary Clinton's logical, data-driven campaign, he ascribes too much likelihood to the success of Donald Trump's alternative approach. Yes, Trump is unpredictable, and this could in principle be a useful tactic in trade negotiations, but so far it hasn't achieved much.

I still think Trump won the election mainly due to a factor that's acknowledged, but not emphasised, in this book: luck (though he did happen on a messaging and emotional strategy that at least gave him a chance of competing). Most theories, and most books like this, are an attempt to explain the real reasons behind things, to provide meaning and salve the anxiety of not-knowing. Only a few (such as the early books of Nassim Taleb, whom Rory acknowledges here) admit that a lot of the world just can't fully be predicted or controlled.

I didn't agree with a couple of details in the book. The first chart in the book categorises a set of ideas that "work" and "fail". "identity politics" appears on the "fail" side. I'm not sure why this is supposed to have failed, especially as a few pages later, he relates two examples of identity politics that succeeded wildly: the election of Trump and the Brexit referendum. Perhaps it only counts as "identity politics" when it talks about racial justice, pronouns and gender, not when it makes salient an identity dimension of working-class, anti-elitist "real Americans", or faux-Churchillian anti-Europeanism? In any case, this kind of detail may put off a readership segment who don't feel their identities fit the mould of the (still mostly white, male) ad guru.

Second quibble: it's an oversimplification to say that universal scientific theories pay no attention to context. Physicists would dispute this: the laws of motion take an abstract form that is very well structured to allow for the context of friction, varying gravitational forces or other environmental factors. The real argument is not against the application of science but its misapplication. Science misses the mark not when it goes too far, but when it doesn't go far enough. It's true that economists and psychologists haven't spent enough attention on modelling context and how it can be described - this is an important topic that cognitive economics could help explore. This does leave an opportunity for those who think about it from a creative point of view instead.

A good scientist, or even a good accountant, does not claim that their models explain everything or are perfectly right. They acknowledge the uncertainty and noise of the real world. A high-quality social science theory might explain 60% of the variance in observed outcomes, and that 60% gives us some powerful conventional tools to make an impact in business or policy. The remaining 40% leaves plenty of space to try something outside of the model, and this is where Rory suggests we apply alchemy.

This book will both entertain you and give you some inspiration to find new alchemic ideas in that 40% space. Most likely, two-thirds of those ideas still won't work - that's certainly what I've found in my own research practice - but if you keep thinking, imagining and testing, that last third will help you find some breakthroughs.

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