Rory Sutherland is a British advertising executive, author, and marketing visionary. He’s the UK Vice Chairman of Ogilvy & Mather, one of the world's largest and most renowned ad firms. Mad Men is largely inspired by the company and one of the firm’s founders, David Ogilvy.

Rory started Ogilvy’s behavioral science practice, pioneering the application of behavioral economics and evolutionary psychology to marketing and advertising.

Some of his counterintuitive theories on marketing and human behavior are compiled in his book Alchemy: The Power of Ideas That Don't Make Sense, where, primarily, he argues that great marketing ideas are often built around a core that is profoundly irrational.

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I think we're in danger of becoming trapped in a kind of communications and media ghetto.

I think there's a desperate problem, not only in business actually, but in institutional decision-making, where it's woefully in need of creativity.

And this is why I loved your book so much, because actually of course your book explains something very interesting, which is good advice in order to be creative, okay?

When you think about it, it's not necessarily good career advice because the very things and the very behaviors that make people reliably creative often are not rewarded, indeed, maybe punished.

I mean, do you know why I went into creative advertising?

It's because when I was applying for various jobs, a creative director came in and said, I've got a very unusual job, because when I look down my department, If I see everybody staring out of the window, I'm basically happy because that's what they're supposed to be doing I thought okay.

That was the that was the decisive moment, but 1 of the things I noticed about Modern behavior this this is what I was mentioning about my second my next book It's basically all around do you want to win arguments?

Because we've made the mistake of thinking they're the same thing that the person with the best arguments has the best solutions and my vastly inferior experience to yours, I would absolutely defer to you in this, but both of us I think have come to the same conclusion, that in fact what you might call sequential logic, simply the use of kind of sequential logic in problem solving doesn't really get you to the best place.

It's fundamentally suboptimal in problem solving and that problem solving is much, much more Darwinian, much more iterative.

It also, I think, relies on the subconscious mental processes that we can't, and actually tacit skills, that we can't really put down on paper or completely codify.

To a point where, it's an interesting question whether the creative process is in fact a process.

And the fact that you subtitled your book effectively a way of being.

In other words, you actually have to be this thing.

It's not something you actually do that can be easily replicated.

You have to acquire that kind of third eye before you can do it.

I thought your book was fantastic in that.

I mean, wonderful lessons like beginner's mind, for example, that quite often the person who comes to something completely fresh will have, in fact, the benefit of ignorance, in a way.

Yes, they don't have the baggage of thinking they know the right way to do it

There's a wonderful little story about this about the loss of assumptions So there's a very successful and it's oh, it's 1 of those things that's only really been admired in Retrospect Very successful British train called the Intercity 125 which was introduced in the mid 70s and only left service about 4 years ago and the reason it had such a long period of use was that it was just very very good.

But what made it remarkable is that the person who designed it was told in the specification that obviously trains had to have buffers between the compartments.

And no 1 in the rail industry has asked this question at all, until he said, why do we need the buffers?

And it's incredibly easy for people who are deeply versed in something to bring all the baggage and assumptions with them.

And that business, and 1 of the things I think doesn't happen enough is areas of scientific expertise or what you might consider engineering expertise would actually benefit enormously and this is the thing that really worries me.

This is what I spend my time fighting which is very very simple asymmetry, okay?

All creative people have to kind of present their ideas to rational people for approval.

There's someone in finance, someone in law, legal, someone in compliance.

Now, you know, I'll accept that, but it never happens the other way around.

You never get finance people with a spreadsheet going, well I've arrived at this figure and my recommendation is 3.7, but before I actually share that with the board, I'm going to present it to some slightly wacky people to see if they've got an alternative idea, or to see if they can redefine the question.

And that's the real problem, that you've probably read a book by Ian McGilchrist called The Master and His Emissary.

Oh it's about the divided brain and it's a very interesting theory that he effectively believes that we've created societies where the left brain has an unhealthy dominance over the right hemisphere.

But I think we've also done that organizationally.

We've created this world where left-brain people are free to act on their fairly narrow rational behaviors without being policed.

Whereas the burden of proof demanded of a creative act is literally 20 times greater.

And I blame things like economics for this, you know, that makes people think that a totally crude mathematical model can somehow have predictive value over human behavior.

Because what they're trying to do is recreate physics, the certainties of physics in human form.

But as your book points out, we can't rewrite the rules of physics.

But actually in most creative problems, you actually can rewrite the rules of the game every time you start work

and I think that actually disquiets people.

I think creative people find the opportunity exciting But so often I think in life what we're actually unconsciously doing to make a decision is we're trying to narrow the solution space At the beginning to make the decision manageable So we do something like let's just treat this as a trade-off Between a and B and we'll find the optimal point between a and B and that will declare that the the optimum

now a creative person will say Actually, if you look at a and B from a different mental frame, they're not actually an opposition It isn't a trade-off.

We can actually resolve the contradiction creatively.

Which is my point about making trains fun rather than fast.

Actually, once you admit psychology into the mix, you know, High-speed trains are to some extent up against 2 things.

1, just the laws of physics, that it's very difficult to double the speed of a train that's already going 150 miles an hour.

And also safety, by the way, which is if a train that's going 150 miles an hour crashes, kind of everybody dies.

A high-speed train has never crashed at maximum speed, but it's a problem.

And the argument is, well, if you make the time spent on board pleasant, actually the train doesn't have to be that fast to attract passengers.

So you're actually optimizing for the wrong thing.

You're optimizing for a physical metric, not an emotional metric.

It's 1 of the things about your book that I find so fascinating.

Your book seems to be about solving big problems when your job description is getting people to buy things.

I mean, 1 of the opportunity stroke problems with advertising is that what something is worth is entirely dependent on how people perceive it.

And so animadverterating comes from to direct attention towards, and it is very simple, a very, very simple level by the way, nobody can buy something if they don't know of its existence.

So, you know, there's a very, you know, no insect can visit a flower if it doesn't know it's there.

So at, you know, a very simple level there's a kind of educational awareness function and then you can take that further to add further value by, for example, framing the price of something in a way that makes it attractive I'll tell you a lovely little story about I occasionally practice.

I couldn't get my father who's now 93 I couldn't get him to get multi-channel television.

And I said, look, you know, and actually his fourth channel was in Welsh because he lives in Wales.

So I said, look, dad, you really need this.

And he said, yeah, but it's sort of 18 pounds a month, which it was at the time then on top of the license fee And I offered to pay for it.

I said well, I'll pay for it for you No, no, it's too expensive.

And then I said very simply I said it's not 18 pounds a month It's 60 pence a day What's that make any difference?

I said you spend 2 pounds down newspapers If you spend 2 pounds down newspapers spending 60 pence a day on 7 news channels, you'll get 96 History, Smithsonian, channels like that.

And it's probably contributed over the last 15 years to his happiness pretty significantly.

And so sometimes it's simply a question of we will naturally attach a value to something based on a fairly split-second knee-jerk heuristic.

You know, 17 pounds a month is a lot, OK, compared to the license fee, If you simply change the frame of reference And so in that sense, it's actually in a funny kind of way helping other people be creative in that It's actually encouraging other people to look at things in more than 1 way And so, you know, I also make the point that this goes much deeper because I think an innovation is only any good if you can actually persuade people to buy it at some level.

And if you look at Steve Jobs, if you look at Edison, if you look at whether you like him or not, Elon Musk, okay?

They're actually kind of hucksters as well as their technologists actually.

Edison to an extraordinary, Henry Ford to an astonishing degree.

You know, they're marketers in a sense as much as they are inventors, But

otherwise we might not have ever heard of them.

My wife's a vicar in the Church of England and if she ever gives me a hard time about working in marketing I would say no 1 would have heard of Jesus if it wasn't for St.

You know, actually there is a fundamental role in terms of simply, you know garnering attention and Quite often I think I mean the thing that annoys me at the moment is solar panels are very very good and far cleverer people Than me have worked out how to make them to a high degree of efficiency, but no one's worked out how to sell them.

Now, most people don't like writing a check for $40,000 for a one-off installation on a home they may be planning to sell which has a 2% chance of going really badly wrong, Either structurally or your local electricity provider won't pay you for the surplus for example Now the way to sell something like that is modular Okay, try to smoke solar panels and you know, it will contribute towards charging your car Then if you like that buy 2 more Now I can see people doing that much, much more readily than making a massive kind of one-off commitment.

Also, just by the law of numbers, people have a spare $2,000 Much more frequently than they have a spare $30,000.

Okay, the first is comparatively much more common than the second So if you don't there's a wonderful quote Kumal gal hotra who's the head of Ford North America who says car making is a hundred thousand rational decisions in search of 1 emotional decision and ultimately The most inefficient thing in an economy is to produce something utterly brilliant and then fail to sell it That's about you know, that's the greatest tragedy.

Are you ever in a situation where you can have impact on the product being better?

Well, marketing properly defined would include R&D, new product development.

And I'll give you a little example of this.

So I think I can tell you something which would otherwise be so very confidential.

There's a wonderful friend of mine who runs a company called Asure.io.

And It's what I jokingly call air B to B and He finds rental homes which you can rent for anything from a night to a fortnight to a month Which optimized for people who want to work while they're staying there rather than people who just want to hang out and watch television and that's why I call it air B to B and I said look, I don't know how to solve your problem.

But if I come up with an idea, I'll let you know Okay, and there are some problems.

I've been exposed to where literally inspiration has come years later you know And the inspiration came because in 1 of these homes when you rent 1 you'll get 2 retina displays, you'll get a fantastic desk, you'll get 2 kind of absolutely ergonomic office chairs, I think you might add an espresso machine and electric car charging next.

And I was trying to think of a way to sell it and then my wife solved the problem for me.

We were staying in a hotel room together and she said, why is there this residual sexism in hotel room design where they assume that only 1 partner in a couple is working as if it's 1950 you know, I the chap sit at the desk firing off edicts.

Well, my wife is in the bathroom putting on makeup Okay, she said, you know, this hasn't been the case for 30 years yet hotel rooms haven't clocked the fact that you need more than 1 desk And I said hold on a second.

That's that's the answer So the ashore message ashore.io is message is simply how come your hotel room has 2 wash basins but only 1 desk?

And now you've found an enemy, you've found an absurdity to which your product is the problem.

And in your book what I loved is that the creative act requires you to fall in love with something before it exists in order to bring it into existence.

Okay, so there's, you patently can't do that using sequential logic.

So there's a sort of strange, I think that You phrase it much better than I would by the way, I mean you're the number of potent aphorisms in your book is Absolutely glorious.

I'm saying this to all the listeners But that business of that you fall in love with something in advance of its own existence Because it's by loving it that actually Nietzsche.

I think there's a similar thing somewhere doesn't it?

Yeah, I don't know whether that's good company or bad company But

it But there's this wonderful thing, which is I Won't bore people who listen to me a lot by talking about Japanese toilets, but it's 1 of those cases where once it seems somewhat absurd

the Toto but once you've actually had 1 there's no going back.

dry wiping is just absurd and there's a great book by a guy called Russ Roberts who, he makes the point about the problem of rationality is that there are many decisions, for example having children, okay.

Having children is, from the point of view of someone without children an absurd decision.

Having a large amount of disposable income, staying out late, going on exotic holidays, you know, having complete loads and loads of free time.

Now, against that what you might call utility function, having children is a stupid idea, but once you have children your preferences and your utility function completely change so that picking them up from a party at 01:00 in the morning, I would say it's not really as rewarding as going to Studio 54, but there's a reward to it which you never anticipated.

And so there is that kind of role of advertising, I think, in getting people over the hump as far as you possibly can.

Because everything new that comes into the world, well, you know, that's better than anybody else with of course with the run DMC Okay, it's anything new is met with a large amount of hostility.

I'm most but by most yes Whoever's in power at the time doesn't like when something new and popular comes up that they don't understand.

There's an academic in London called Armand Leroy.

If you've met him, it might be Leroy, I don't know.

He's Dutch actually, although he's got a kind of French name.

And he did a kind of Darwinian analysis of music from the second half of the last century.

And there are effectively everything proceeds through what you might call slow-step evolution, except for 2 periods, 1 of which is the British invasion, which he said was unusual because it was kind of welcome in a way, and then there was Walk This Way, a single song, which was effectively like a Cambrian explosion in musical evolution.

It's a bit like when I think it was possibly animals evolved sight or something, which completely changes the possibility of the number of evolved forms that can suddenly be created once you've cracked a particular thing.

And he said what was interesting about that was it was basically more unwelcome than it was welcome.

And I think that question where there will always be a strong vested interest in the status quo, broadly speaking people post-rationalize what they already have for all kinds of reasons.

And therefore, the business problem, probably, the business equivalent of that is destroying entrenched metrics.

So people become very very comfortable about metrics and in many cases these metrics are further entrenched because people are incentivized on doing these 3 things.

Now what tends to happen in any complex system is that if you over-optimize the parts, you're actually damaging the whole.

And the healthy thing to do with metrics is make some of them subjective and change them every now and then.

But once they take hold, they're very, very persistent and very difficult to dislodge.

We have an interesting thing in Britain with the National Health Service, which is they've become absolutely fixated on waiting times.

Now, don't get me wrong, okay, there are a lot of medical conditions where speed is of the essence.

But there are some other medical conditions, for example, anything orthopedic perhaps, where actually, to be honest, the speed of the American system is probably the eagerness to operate and intervene may actually be a bug, not a feature.

And actually, if you reframe that time as preparing for your operation or seeing if you can avoid an operation, rather than immediately leaping to invasive surgery, a wait is not necessarily a bad thing.

Now of course once you, once people, you know, politicians make promises based on those metrics, it filters all the way down the organization with separate incentive schemes and so on, and then Essentially you get that terrible thing, which is that?

Someone said doing the wrong thing efficiently Is actually worse than doing the right thing badly

And I think that happens was very very often But I'm intrigued by this because I think the other problem we have is that, I mean, you patently, people who are independent music producers, Brian Eno I've met a few times being another case, you know, patently it's 1 of those areas where the process helps you derive insights into how to be more creative and the advertising industry is a pocket a small pocket in the business world where similar you can learn similar lessons effectively.

So, I mean, great, you'll like this, you know what I said.

We always add the music last to a commercial.

And it could be really good or really bad and either way you'll advance your position.

Whatever happens, actually, the very act of generating something different actually probably is a contribution in itself, isn't it?

So my colleagues all asked me to ask this question of you, Which is what's the single thing?

By the way, we ought to we ought to all have this caveat here Which is there are lots of cases in the world where you don't want people to be creative Okay, where there is a best practice.

I mean the people who check the wheel nuts on your plane Okay, you don't want them to be wildly experimental people.

There is a kind of explore exploit trade-off which is exploring what we don't yet know or what's changed versus exploiting what we do reliably know.

You probably remember from my book the bees question, some bees don't obey the waggle dance, And that baffled scientists until they realized that you get trapped in a local maximum, over-optimized on the past, and the hive ends up starving to death.

Because when the environment changes, it doesn't know how to adapt.

So you have to allow for this kind of, what you might call creative tax, if you wish to be adaptive and resilient.

And also if you want to get lucky, by the way.

If you simply follow the waggle dance, you're never going to find a new patch of flowers.

So I think there are cases, you know, there are cases where, you know, a large part of the economy, just as a large part of the economy will have to be devoted just to repairing what we already have.

But if you are trying to do something new, what's the...

1 of your suggestions was patience, which I thought was very good.

What's the single thing that's impossible to substitute for?

First thing that comes up is the idea of curiosity, of like, what if it's a different way?

Just that interest in wanting to see something new and not settling for what exists.

So fear of the obvious, yeah, this is really interesting.

Because what Dave Trott, a colleague of mine in advertising says what makes it difficult being an advertising creative is that most people in business rather like the obvious because it's easy to sell the obvious because it comes with its own logic packaged, baked in.

Whereas the non-obvious, the counterintuitive, requires an argument and also exposes you to far worse consequences in the event of failure.

If you do the obvious thing and fail, generally you don't get punished very much.

I think the curiosity thing, because I think there's an analogy here you might find interesting, which I'm really worried by online property websites.

Okay, so I'm really worried by you know, hotline property searches But what it is is first of all, everybody wants to narrow down their search to make it manageable And that means that effectively But the problem with online property websites, they're all doing it in the same order where radius of search Okay, how many bedrooms or in the US probably square feet or whatever?

No, it's how many better more than square feet That's how many bed

square feet is a much better measure in many ways Absolutely if you make number of bedrooms a metric, all the property developers will do, the best thing you can have in a house is 1 really big room.

Because actually, how big your bedroom, I never understand that American thing where the master bedroom is so Big that you practically need to set up a base camp halfway to the lavatory.

I've never understood that thing You know, I mean, it's a bedroom.

I mean Never got that but having 1 really big room is a what you know Wonderfully versatile thing and then the other rooms are slightly secondary and important or really big kitchen might be the thing, okay?

But then number of bedrooms, and then people will put in price, and they'll either search high-low or low-high.

Now, what worries me about that is that when everybody searches in the same way, you start to get massive concentrations of demand in 1 place and massive under demand in another place Now when search is messy, there's a thing which I only discovered last week called Mandeville Ian Intelligence, which is when everybody's stupid in a different way.

The collective effect can be surprisingly intelligent

so if everybody bought cars on formula, which was okay, you know acceleration fuel economy Maximum speed number of seats the US Ts Americans number of cup holders, of course But if everybody had the same mathematical formula for buying cars, cars would actually be terrible.

And the fact that people value aesthetics, people value non-numerical things that you can't put in a search necessarily.

The fact that people value design, they value interiors, all those other things.

When you aggregate all those preferences You actually end up with pretty good cars when you don't aggregate those preferences when everybody follows a formulaic search pattern you lose all the Mandeville an intelligence the collective and so what actually happened out interestingly in the UK There are 2 websites.

I'm not don't have a shit stake in any of these, I'm just...

And the other 1 is called Inigo, after Inigo Jones.

And they are both sites which are kind of optimized around architectural quality.

In the case of the modern house, they tend to be, well, predictably enough, modern.

In the case of Inigo, they tend to be Georgian, Victorian, or older, but they're architecturally distinguished.

Now, anybody who sets off searching to buy a house using 1 of those sites, In other words, what they've done is they've changed the there's a thing in decision science and choice architecture, which is called Elimination by attribute where you take different attributes in order and you eliminate the worst 80% Now, I'm sure there'll be a lot of people who go I want a five-bedroom house and so and so, so and so, but if they see a really attractive Georgian three-bedroom house, okay, they'll go, sod all that, I'm going to revise my preferences in the light of new information, which is a very creative act in a sense.

You set out intending to do 1 thing, and then what you discover through the act of searching is that that's not what you want to do at all.

And it worries me that when you have, that you can have collectively a lot of people all thinking they're being rational and being completely content with their decision.

But what they haven't built into that, which I think creative people would build into a search, is a, I need to look for mechanisms that expand the possible solution set, based on the fact that maybe I don't...

You quote Einstein, don't you, which is, if I had an hour to solve a problem I'd find spend the first 55 minutes defining the question and I don't think people do that.

I think once they think that the internal logic of their decision-making process checks the box, I don't think they stop and think, well, what if we do this backwards?

What if actually, you know, the first thing I searched for was architectural distinction or whatever it might be, you know, or garden size.

But do you think that the people who use the current metrics are happy with what they choose?

You see, I think this is where you get—metrics are great if you want to win an argument, because it has the appearance of rationality, But the consequent effect is not optimal, I think.

For you and I, if we were looking for property, the metrics would not solve our issues.

Well, the reason I investigated this, I'm conscious of the fact that, you know, that worrying about preppity websites seems a bit silly.

Because I've often written in defense of human real estate agents.

And the reason I defend them is that they possibly know what the buyer wants better than the buyer herself or himself wants.

And if you talk to a human real estate agent, they will say everybody comes to them with a set of preset criteria.

They said the majority of people will end up buying a house which misses 1 of those criteria because they just like something else.

In fact, a large minority of people end up buying something which means none of their initial criteria.

So that creative process of just mess with your own assumptions, if you like, I genuinely think that's probably the job of the right, if I'm being McGilchrist about this, Maybe that's the job of the right hemisphere is to go, am I becoming overly fixated on X to the point of absurdity?

And there's some evidence in McGilchrist's book, to be honest, whether he's right or not from the point of view of neuroscience, I don't know, I'm not qualified to judge.

Whether the metaphor that arises from this is useful as a corrective, And his argument would be that effectively, if you look at birds, they seem...

Quite often birds don't really have stereoscopic sight.

Hold on, no, they use the right eye, because it crosses over, for pecking.

That's the specific job of pecking at bits of corn.

The job of the other eye is to look out for predators, it's to look out for unspecified problems, okay?

So the brain is kind of, there's a kind of division of labor into the specific and the speculative, if you like.

I'll never be, you know, I don't have enough life left to actually acquire the neuroscience to solve that problem.

But it does strike me that we've come, we've, in politics in particular, we've come in a world where we've chosen people for their ability and we've educated people and we've selected people at educational establishments for their ability to win arguments.

And actually Winning arguments is kind of bullshit because all you do is you set up a very dubious premise which seems reasonable.

You then kind of Jesuitically kind of extract a logical chain of consequences from that premise, arrive somewhere else with a big QED.

And actually what you've done is actually has the appearance of intelligence.

But it's, I mean, the philosopher guy, the American philosopher guy called, there's a business writer, Roger L.

Martin, who's a big devotee of this American philosopher called Charles Sanders Peirce, who said that effectively creativity is part of intellectual rigor.

That we can have the appearance of intellectual rigor without creatively exploring the solution space first, and it's kind of scientism or false.

It has the appearance of being scientific but actually he says that without abductive inference which is basically a hypothesis, it's what would have to be true if.

It's what Conan Doyle called reasoning backwards.

In other words, not if this happens, what will happen next, but actually, I found a dead body, what must the initial conditions have been to lead to this corpse?

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Rory Sutherland