In August 2008 Marc Hogan was bet £1 that he couldn’t become a stand up comic in less than 12 months and perform a one man comedy show at the Edinburgh Comedy Festival in August 2009 for 21 nights. He won the bet!
Change always represents a challenge. Some of us embrace it but many of us resist it and we might not even know it.
We all have different personalities. Some of us are very rational whilst some of us are more emotional. However, psychologists and neuroscientists have proven that both the rational mind and the emotional mind are vitally important for making decisions and choices.
In fact there was a very famous study by a neurologist by the name of Antonio Damasio. In 1982, Damasio met a patient called Elliot. Damasio didn’t know it but Elliot was set to become one of the most famous case studies in all medical science.
Let me tell you a little more about him. Elliott had been a high achiever for his whole life. He was very intelligent and he had an important executive job in a successful company. Outside of work he was a model husband and father and he was active in the local church and community. But a few months before he met Damasio he had a small tumour removed from the frontal lobe of his brain, and everything changed for Elliot.
Although Elliot’s intelligence had stayed the same – he still tested in the 97th percentile, he now exhibited one major psychological flaw; he was incapable of making a decision…
This made normal life impossible. Routine tasks that should have taken a minute now required several hours. Elliott endlessly deliberated over irrelevant details, like whether to choose a blue or black pen, what radio station to listen to and in which space to park his car. He had to visit and evaluate every restaurant in town to decide where he wanted to have lunch on a daily basis.
His inability to make a decision was like mental paralysis. Before long he was out of work, bankrupt, hungry and his wife had divorced him.
Damasio was curious. Elliot’s life was a mess, but he didn’t seem concerned. On a hunch Damasio conducted experiments to assess Elliot’s reactions to a number of images of things that usually result in a strong emotional reaction such as a severed foot, a naked woman, a house on fire, a handgun (perhaps even a sales target). The results were clear – Elliot felt nothing.
Scientists now understand that to make the right choices and decisions in life you need both the rational and emotional mind to work together. The emotional mind doesn’t only help, it is essential.
However as with everything, it’s not quite as simple as that. No matter whether you’re more logical or emotional, or even somewhere in between, our brains can play tricks on us which causes us to sometimes make strange decisions. Now let’s try put that to the test.
Experiment 1
First, think of your favourite band and imagine they’re playing a one-off gig in your home town. You have a ticket to their sold-out concert which cost you £100.
You’re such a big fan that you would have been willing to pay up to £300. Now you learn that desperate fans on the Internet would be willing to buy your ticket from you for £1000. Would you sell it?
Now clearly the rational thing to do would be to sell your ticket – you’re being offered £700 more than the ticket was worth to you financially. But if you decided to keep your ticket you are being affected by the “endowment effect”: you value things that you currently own more than things that you don’t.
I wonder if this is how we might feel about change? Perhaps you need to look for new customers, or take on new responsibilities or perhaps move to a new area, could any doubts you have be because of the endowment effect?
Let’s try another one.
Experiment 2
Imagine you are a doctor faced with a seriously ill patient. You have 2 choices: (1) you can operate; or (2) you can recommend a course of drug treatment.
You know that in the long term, operating has much better outcomes, but unfortunately there’s a 10% risk of mortality in the first month following the operation.
What would you do?
Now imagine that the question was asked in a slightly different way.
Imagine you’re a doctor faced with a seriously ill patient. You have the same 2 choices: you can operate or recommend a course of drug treatment. This time you are told the operation has a 90% survival rate.
How does that make you feel about your answer? Would you be tempted to change your mind?
Psychologists tested this out with 2 groups of doctors under experimental conditions. The results were strikingly different. 50% of the doctors said they would operate when they were told about a 10% mortality rate.However in the second group when the question was rephrased as a “90% survival rate,” 85% of doctors chose to operate. That’s a dramatic change considering the only difference was the way that the question was worded.
But doctors are intelligent people surely they couldn’t fall for such an obvious ploy? 10% mortality rate and 90% survival rate are exactly the same thing, they are just two sides of the same coin. But when we hear “mortality” our brains think loss, and when we hear “survival” our brain thinks gain. Human beings hate loss, it terrifies us and it changes the way we behave and the decisions we make. Psychologists call this ‘loss aversion’, and we’re all susceptible to it.
Ok. All of this is very interesting. But what does it teach us?
Well, what we’ve learned is that human beings can be disproportionately affected by loss rather than gain. Our natural emotional instinct is to hold onto what we’ve got and to avoid loss, even when the potential gains are much higher. So we humans are naturally risk averse.
The question is now that you understand endowment effect and loss aversion, are you going to make different decisions in 2012, or will you let your emotions get the better of you?
Click here to watch Marc’s showreel. If you would like to find out more about Marc, visit www.marchoganlive.com or to book him for a speaking event please contact your favourite speaker bureau.
