Robert LoCascio, founder and CEO of LivePerson, a company that provides online customer assistance and other services to businesses, recently described in an interview with The New York Times a moment when he felt his company was falling into a pattern that didn’t make sense.
The company offices were arranged with cubicles in the middle and offices on the outside. Walking through, he noticed two guys jammed into one tiny office, despite many open cubicles. When he asked why, he was told that the guys had been promoted to directors and the habit was for directors to get offices — so there they were.
Businesses, just like individuals, are creatures of habit. Building and using positive habits can strengthen a business. That’s among the ideas presented by author Charles Duhigg in his book The Power of Habit: Why We Do What We Do in Life and Business.
The book comes highly recommended: The Wall Street Journal and The Financial Times both named it one of the best books of 2012. Duhigg, however, is not a business theorist or sociology expert. He became interested in the science of habits eight years ago while in Baghdad as a newspaper reporter.
Duhigg encountered a major who had analyzed videotape of riots. The major noticed that if food vendors came into a plaza where a potential outbreak might happen, a full riot was likely to ensue. By keeping the vendors out of the plaza, the crowd would usually break up on its own. Removing the food vendors changed the crowd’s behavior.
The major confided to Duhigg that the U.S. military is one of the best examples of habit formation in history. Understanding habits, according to the major, was one of the most important things he had learned.
Duhigg was hooked on the idea and began to investigate the power of habits. The result is an intriguing look at the impact of habits and how we can use them to greater effect in a variety of ways.
The book is a combination of research and stories that makes for a fascinating read.
The author reviews a broad range of ideas and topics, including how habits are made and can be remade.
In the opening chapter of the book’s first section, “The Habit Loop,” the author explains what a habit is. By some estimates, habits make up 40 percent or more of our daily routine. To form a habit, first there is a cue, then a routine, followed by a reward.
Companies use this process to sell products and services. The second chapter, “The Craving Brain,” gives the example of Pepsodent. At a time when few Americans brushed their teeth, then famous marketer Claude Hopkins applied rules for creating habits to toothpaste and soon made Pepsodent one of the best-known products in the world. Hopkins found a particular cue and reward that created a habit — and his ideas have been used by marketers ever since.
More recently, the author notes, Febreze went from near bust to revenues of more than a billion dollars a year. By positioning the product as a fun habit to be done after every housecleaning, sales turned around and soared.
In “The Golden Rule of Habit Change,” the topic of habits takes a slightly darker turn. Habits are not as simple as they appear, the author states, citing examples of the habits of alcoholism and compulsive gambling. Habits, he insists, are not destiny. If we understand how habits function, we can change any habit.
“Hundreds of habits influence our days; they guide how we get dressed in the morning, talk to our kids, and fall asleep at night,” Duhigg says. “Each of them has a different cue and offers a unique reward.”
“But every habit, no matter its complexity, is malleable. To modify a habit, you must decide to change it. You must consciously accept the hard work of identifying the cues and rewards that drive the habit’s routine, and find alternatives.”
With the development of positive habits, the least skilled manager can become a successful one. The most dysfunctional company can transform itself.
The second and third sections of the book provide a cross section of examples and stories of how companies, groups and even a church, changed habits successfully.
Starbucks provides an interesting business case study for success, but the chapter on “How Target knows what you want before you do” was an eye-opening look at how companies manipulate habits.
Duhigg insightfully applies his ideas on habits to a broad range of topics, ensuring that we understand the impact habits have on so many aspects of our lives and work. He also underscores that we have the freedom and responsibility to remake our habits. This book provides an intriguing and entertaining look at the power of habits.