CW 460 – Daniel Pink – Motivation and the Hidden Science of our Lives with Host of National Geographic’s ‘Crowd Control’

In the first Creating Wealth Show of 2015, Jason Hartman details some of the most important things you should consider when forming your new year’s resolutions, including making your assets work for you and using every asset you have available to you.

Today’s guest is author and National Geographic’s Crowd Control presenter, Daniel Pink, who discusses a number of the problems featured in the TV show, as well as some of the research that went into his own books. His expertise in behavior and motivation really comes through and makes for a fascinating show for anyone looking to make a change in their lives.

Key Takeaways

02.24 – Make your new year’s resolutions really count towards improving your personal and professional life.

06.16 – Check your assets. You need to know which ones are working for you and which are not.

10.33 – Everyone underestimates the importance of credit. Don’t make this mistake.

16.19 – It’s remarkable just how many seemingly unnecessary laws are introduced every year.

25.25 – So many day-to-day problems that we face have a simple solution. Daniel Pink finds that solution.

29.59 – Once you know the science behind how people think, you just have to apply it.

33.00 – There are so many psychological and physiological factors that impact on our thoughts and actions.

37.29 – To Sell is Human focuses on the fundamentally human nature of selling.

42.33 – For the first time in human history, we have to think about our future selves and align them with the present.

48.50 – Daniel Pink takes us through some of the ways you can use subtle motivation in the workplace.

52.19 – For more information, head to www.DanPink.com, follow at @DanielPink and watch the show Crowd Control on Mondays on the National Geographic Channel.

Mentioned in this episode

A Whole New Mind by Daniel Pink

Drive by Daniel Pink

To Sell is Human by Daniel Pink

Three Felonies a Day by Harvey Silverglate

Free by Chris Anderson

Crowd Control – TV program, National Geographic Channel

Tweetables

There is no return on equity. There is only return on investment.

Through persuading, cajoling and convincing, we’re constantly selling ourselves without realizing.

Motivation isn’t about forcing someone else; it’s about doing something for you.

People inherently want a sense of purpose. They want it to matter if they don’t show up for something.

Transcript

Introduction:

This show is produced by the Hartman Media Company. For more information and links to all our great podcasts, visit www.HartmanMedia.com

Welcome to Creating Wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven’t thought of before, and a new slant on investing. Fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine self-made multi-millionaire who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years, and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it, and now, here’s your host, Jason Hartman, with the complete solution for real estate investors.

Jason Hartman:
Welcome to the Creating Wealth Show, this is your host, Jason Hartman. This is episode number 460, 460. Happy new year to everybody, all around the world, with our listeners in 164 countries. I guess all around the world – that’s one thing we have pretty much in common: New Year, or at least a new calendar year. Of course, there are different calendars. There’s the Chinese New Year, which I believe takes place in late January. Anyway, to all of you celebrating this new year, happy new year to you.

Our guest today, because this is a 10th show – every show that ends in a 0, we go off-topic and just talk about something of general life interest – so our guest today is awesome. His name is Daniel Pink, Dan Pink, and you’ve maybe heard of him. He’s a pretty well-known guy; he’s author of 5 very provocative books including 3 long-running New York Times bestselling books, A Whole New Mind, Drive and To Sell is Human. Dan’s books have been translated into 34 languages and he’s sold over 2 million copies worldwide. He’s also the host and co-Executive Producer of Crowd Control, a new television series about human behavior on the National Geographic channel. He will be coming to us in a bit here, after I talk to you for a few minutes, from Washington DC, where he lives with his wife and three kids. That’s got to keep him busy!

Okay, so it’s a new year. What are your new year’s resolutions? Well, one that I hope I can convince you is a worthy resolution is to:

1. Really, really, really resolve to move as much of your financial life from the earned income role, which is that good old thing: JOB. A job could be your own business, but either one, that’s active income. Active income, especially when it’s in a JOB – a job has sometimes been called that acronym just over broke. I know that’s not true for most of our listeners because a lot of you guys have pretty high-level jobs and that’s wonderful, but it still is active income. The moment you stop working, your income stops. We’re here to help you move into that non-earned income category, that investment income category and that category where your investment portfolio is as passive as possible.

You know me, I don’t believe there’s any such thing as a truly passive investment. Even money in the bank is not truly passive, so every investment requires attention. On our side of it, there aren’t very many moving parts so it doesn’t require that much attention. I know occasionally when you have a difficult time with a property or something, maybe you think it requires a lot of attention, but overall when you really add up the amount of time, it’s not very much. That’s why I wanted to bring to you the last couple of case studies as we are moving into the new year here, into 2015. I thought hearing from David Porter and his story, investing in those Indianapolis properties and in Phoenix, he really did a great job and bought at the right time and is up over $700,000 on his portfolio. Of course, that’s two episodes ago, you can listen to that one.

And then Fernando, well he’s a big fish for sure – I mean, 70 units, 50 properties! Some of those are duplexes and fourplexes and things like that so we’ll just call them plexes; 70 units total. He’s done a fantastic job with his portfolio as well, so we’ve got many, many other clients who have done great things as well, and we’ve profiled them on prior episodes over the last 460 episodes. Go back and check those out. The key terms would be if you go to www.JasonHartman.com and you want to search for those interviews, if you just type the word ‘client’, you’ll find them, or if you type ‘case study’ you’ll find them – words like that. I know with so much content out there in all these episodes, it’s not like I can direct you to a specific episode exactly. With the search feature on the www.JasonHartman.com website, you can find things pretty darn easily.

So, new year’s resolutions. One of them I want you to think of, of course, is the one I just mentioned to you. Drilling down on that a little bit, I want you to think of a balance sheet. Everybody has seen a balance sheet at one time or another in their life – maybe a lot of you listening are accountants, you’re CPAs, financial people – you’ve probably created many balance sheets! What is on that balance sheet? Well, in one column, we have assets, and in another column, we have liabilities. When you subtract the liabilities from the assets, you get the net worth of the person or the company. If you have a million dollars in assets and you have $500,000 in liabilities, then that means your balance sheet shows a net worth of $500,000. Similarly, if you have $10 million in assets and $5 million in liabilities, well then your net worth is $5 million.

Here’s the thing though. One of the first duties that you must do in this new year is you must make sure you are putting all of your assets to work, and I know from talking to you and hearing your situations and your stories that many of you listening have a lot of assets that are sitting on the sidelines. Think about it. If you owned a business and you had a bunch of employees, you wouldn’t allow those employees (hopefully!) to be lazy and not work or not produce very much work, right? If you had a farm and you had a crop and your crop wasn’t producing enough, you would hopefully manage it and optimize it so that it would produce as much as possible. The same is true with our assets.

We have assets and many of us have assets we’re not using. We have money sitting in the bank, earning 0.5% interest. That’s absurd when we can pretty darn easily earn 12% or 14% or 25% or 35%, or even 45% on that money in a low-inflation, low-yield environment. Really, the environment we’ve been in for about the past year. Before that, we had some fairly significant inflation in the years prior, but it does seem to have tamed a bit. In this environment – the low-yield, low-inflation environment – it is incumbent upon us to win the race by simply getting yield. In getting that yield, think about it. If everyone else is making 0.5% on their money, which believe me, you look at the deposit numbers in banks – that’s what a lot of people are making, just half a percent. It’s unbelievable how disgusting that is, right?

If you make 10%, well then you’re outdoing those people by a multiple of 20. You are creating wealth 20 times faster than they are. If you can just look at this as a competition with yourself and you’ve got these unused assets, what are they? Well, they’re equity sitting in any property, but usually the biggest culprit is one’s home, the home in which they live. They’ve got a bunch of untapped equity sitting there. When you’ve got a 1099 on all of your different accounts, they give you a tax statement that says you earned x return on this bank account, on this stock account, on whatever, in this mutual fund. You’ll get reported to the IRS for that return that you earned. Well how many of you got a return on equity? Yeah, I thought so.

See, there’s a metric called ‘return on equity’ that real estate investors use, or just financial people in general – it could be equity in anything. I submit to you that that is a bogus metric. It’s not legitimate. There is really no return on equity. There is only return on investment. ROE, Return on Equity, is really a bit of a misnomer. It’s return on investment. If you have half a million dollars of equity sitting in your home and you’re not using it, that money has gone to sleep, it is a lazy employee, it is a dead-beat and it should be fired in the new year. You should put that equity to work where it will get a higher return. Same goes with the bank account and the same may well go with stocks, bonds and mutual funds. You know how I feel about those things, although stock investors have been riding a bit of a wave, lately.

You know, that will have an accounting, or as they say, an adjustment or correction, soon. Other people call it a crash, but Wall Street calls it a correction. What sounds better to you? A correction or a crash? I think I’d rather have a correction; it sounds a little more mild, right?

But here’s one of the big assets on the balance sheet. Well, it’s really never on the balance sheet because most people don’t even view it as an asset, but it is a very, very powerful asset. I want you to make sure you use this asset. The asset is – can you guess it? Let me see if you can guess. The asset starts with a C. ABC. The third letter in the alphabet. This is a very important asset, and I will bet that probably everybody listening is not exploiting this asset to its fullest potential. They’re not using it as much as it can possibly be used. What is that asset that starts with a C? Credit. It is credit. Credit is an asset. Your ability to borrow is an asset because that can help you control more income property. As long as you’re using credit in a conservative, prudent, logical fashion, it is a huge asset. Use your ability to borrow. Use your credit.

That’s one of the greatest things about income property; it is not only the most historically-proven asset class in America, if not the entire world. It is not only the most tax-favored asset in America. But it is also the most debt-friendly asset. When I say debt-friendly, it means that lenders feel very secure about loaning on real estate, compared to any other asset. Look, try and get a loan on your business. Try and get a loan on anything else. It’s never as favorable as the real estate loan because real estate, and I’d say especially income property  because you don’t pay your own debts with income property, you outsource them to other people, is the most debt-friendly asset.

Debt, when it comes to income property, is my favorite four-letter word. It is a really, really powerful thing. As long as you use it correctly, it’s a very powerful tool. Credit is a huge asset on the asset column of that balance sheet, so make sure you use it in the new year.

Now, I bet another, probably a much more obvious asset that a lot of you aren’t using is money in a retirement account, in an IRA. Are you self-directing your IRA? I sure hope you are, and maybe a 401(k) too. There are some nuances there too. We’re going to be talking about this at our upcoming Meet the Masters event quite extensively, but a lot of those unused assets are in there too. You can’t borrow as well inside of retirement accounts. You can do borrowing, but it’s not as debt-friendly as outside of the account. What I would say is that that money inside the account, you want to use that for cash purposes of income property if you’ve tapped out your number of loans and you’re a cash buyer, basically. That’s an option, but I think what might even be a better, more attractive option, is investing in the discounted land contracts.

We will be presenting that. Of course, we had it a few episodes ago and we talked about that and we will be presenting it at the upcoming Meet the Masters event and I think that’s going to be a very exciting thing for things like retirement plan money. It just lends itself, pardon the pun!, perfectly to that type of account and investment.

New year’s resolutions – put things to work, get all your assets to work, get your money deployed, get it into prudent, historically-proven income properties; not the speculative junk where you’re planning on appreciation. That’s not an investment, that’s a gamble, that’s a speculation. It’s funny, I was talking to someone yesterday and she was saying ‘You know, the next time you go to Las Vegas, you’ve got to go to this place, it’s a really fun place to gamble’. She launches into this whole conversation about why it’s so great, and I said ‘I don’t gamble’. Don’t gamble with your investments, either. You can have some riskier types of investments that might pay off bigger returns if they work, but really, when you’re looking at appreciation and thinking you’re an investor, you’re not an investor. You’re a gambler. You’re not an investor if you’re investing for appreciation. Don’t do that. Invest for cash-flow in really prudent, simple properties that make sense the day you buy them, following my Ten Commandments of Successful Investing.

Another thing I want to mention, since it is a new year – every new year, there are all these new laws. You know how I feel about laws; I’m not a huge fan of them and the reason is because these laws sometimes are so nonsensical and it gives the government the opportunity to make all of us criminals. When I was brought up, my Mom used to say to me “Jason, ignorance of the law is no excuse.” And I thought ‘Okay, well that means as a citizen, I have the responsibility of knowing the laws.’ We all have that responsibility, but guess what? This year, in the new year, and most of them went into effect today, the Socialist Republic of California has 930 new laws that go into effect.

Every year it seems like more. I remember a few years ago it was like 600-and something, and one year it was like 700-and something new laws, and then it was 800-and something new laws, and now it’s 930 new laws. Do you know them all? No, I bet you don’t, and that’s just one state. It’s probably one of the worst states. Many other states, probably every other state has a whole bunch of new laws too. I’m sure Arizona does as well, and then there are new Federal laws.

Now, how many times do you hear about laws being repealed?

[Sound of crickets]

Hmm.. crickets. How many laws do you hear about being repealed? Yeah, I thought so. I never seem to hear about a law being repealed; I only hear about new laws. 2,000 years ago, a Roman gave this quote, and I think you pronounce the name Tacitus, who said “The more corrupt the state, the more numerous the laws”. I don’t think I ran this episode yet for you, but I recorded the author (who’s a lawyer, by the way) of a good book called “Three Felonies a Day”. He basically showed how we’re all committing three felonies a day and we don’t even know it. Good, well-intentioned citizens are breaking laws constantly. Anyway, I think that has aired already on my Holistic Survival Show, maybe my American Monetary Association Show, and I don’t think we ran that one on the Creating Wealth Show yet but we might in the future as a 10th episode. It’s pretty amazing.

Let me just go over really quickly a couple of these funny, odd laws that were called out in an article by Newser – some of the most interesting new laws that take effect today.

Wine lovers in Massachusetts can finally have out of state wineries ship them bottles of wine – big deal, can you believe there was a law against that? Kind of amazing.

In California, of course they have the animal laws going into effect. By the way, I don’t mind this if it wasn’t a law. I think what it should be is a consumer choice where the consumers will hopefully choose the right thing. Listen, I’m an animal lover. I was a vegetarian for several years, but I gave that up. I don’t think that’s a good idea, just so you know, but I did try it. This is a 2008 ballot initiative aimed at making life better for animals and it takes effect today, giving more space to egg-laying hens, breeding sows and veal calves. I would never eat veal because I think that is cruel and unusual punishment.

Of course, this will make prices sky-rocket, and who will it affect most? The poor, of course. Every law affects them the most and in the most negative ways. This should just be a disclosure thing and consumers should make a choice on this stuff.

Let’s see what else here. Oh boy, this one is going to be just a nightmare. Yes, officially means yes in California, where a new law regarding College students is now in place. An affirmative, conscious and voluntary agreement to engage in sexual activity is now required, and silence or lack of resistance does not mean consent. Oh my God. That one is just a Pandora’s Box. Listen, there have been a ton of stories lately of date-rape and things like this going on in College campuses, and having lived near ASU for two years – I don’t live there anymore, but when I first moved to Arizona I lived close to Arizona State University for a couple of years – I kind of saw what goes on. It’s not good. Gosh! This is quite literally a he-said, she-said thing. The lawyer’s got to love a law like that. I don’t know how to solve the problem; probably a lot of it stems from the alcohol problem, which is a whole other issue. That’s just a Pandora’s Box, I can imagine.

You can’t throw away your old computer, TV or video game console in New York because it’s now legally required that you recycle these items instead.

Undocumented immigrants – now that’s a slightly more politically correct term; maybe ‘illegal immigrants’ is actually the proper word, I don’t know – they can now get driver’s licenses in California, and of course they get a whole bunch of other benefits too. It’s amazing that if you’re legal, in many cases, you don’t get as many benefits as the illegal people do, but I digress.

In Indiana, you’ve got to have a license plate to drive a motor scooter now because a lot of people who lost their licenses for drunk-driving were driving unsafely on their scooters and they’ve got to report them.

Oh, Massachusetts now finally has hold-open clips on self-service gasoline pumps, so that’ll make a lot of people happier in winter because they don’t have to stand there filling up the tank. I don’t know why they never had those before. I guess Massachusetts thought that was a problem.

Now, this is the funniest one of all, and I know this is in New York, according to the article, but I think this also went into effect as a similar law in California. Get this one, folks, and then we’ll get to Daniel Pink. This is the last of my editorializing here. A bonus law starting next month in New York, and I believe this is California, too – it will now be illegal to take a selfie with a lion, tiger or other big cat. The law passed after such photos started gaining popularity online, particularly with some young men on dating sites, the associated press notes. Oh my gosh. You have to make a law against that, you can’t just have the Darwin awards for idiots that take selfies with tigers and get eaten by them? What are we doing in this world? It’s just crazy.

Okay, anyway, let’s get to our guest, Dan Pink. He’s got some great TED Talks out there, by the way – you might want to look those up – and he’s got some great stuff to say in the interview here too. As we do on all 10th shows, we’re not on the topic of real estate strictly, or personal finance today, we’re talking about stuff of general interest. Here is our guest, Daniel Pink.

It’s my pleasure to welcome a name you certainly know, and that is Daniel Pink. He has done many things and authored many books. He’s host of a new series on National Geographic, entitled Crowd Control, he’s a Contributing Editor for Wired, former Chief Speech Writer for Al Gore and aide to Secretary of State, Robert Reich, he’s a bestselling author of To Sell is Human: The Surprising Truth About Moving Others, also A Whole New Mind: Why Right-Brainers Will Rule The FutureDrive: The Surprising Truth About What Motivates Us and many, many others. I’ll leave it at that and let him talk about the rest. Dan, welcome, how are you?

Daniel Pink:
I’m good, Jason, thanks for having me on the show.

Jason:
Well, it’s great to have you. Give our listeners a sense of geography; where are you located?

Daniel:
Geography? I am in Washington DC.

Jason:
OKay, good, the belly of the Government beast.

Daniel:
Indeed, yup. I don’t live in the Maryland or Virginia suburbs, I live right here in the District of Columbia, so I have plenty of taxation and no representation.

Jason:
[Laughs]. I love it. Well, considering that’s coming from an Al Gore, Robert Reich guy, I’m kind of surprised you say that, but okay!

Daniel:
It’s like that old line that a Conservative is a Liberal who’s been mugged, and a Liberal is a Conservative who’s been arrested. I would say that a Social Liberal Fiscal Conservative is a Democrat who’s become self-employed.

Jason:
I love it! And at least you’re candid about it too, that’s awesome. Well hey, your new show is fascinating! Tell us what you’re doing on Nat Geo’s Crowd Control show.

Daniel:
Yeah, this is a really great show. I’m biased, obviously, but it’s a really great show and what we do is this: we go out and look for problems. We look for big problems; things like people speeding which results in a lot of deaths, things like airline safety. There are also some small problems: things like people who don’t pick up their dog poop or people who double-dip guacamole. Then we look to the behavioral science. We look to this whole body of research and psychology and economics and to some extent, sociology. We say ‘Okay, what does the research tell us?’ and then we have this fabulous team of designers and technologists and we go out there and come up with a solution. We put it in place out there in the real world and see what happens. Sometimes we do a great job of solving these problems – well, a lot of the time we do. Sometimes we don’t do so well.

Jason:
How did you approach solving? Pick a problem you like. You do some stuff on sales and persuasion too.

Daniel:
Yeah.

Jason:
You took a beef jerky seller and doubled his sales. Pick whatever you want, there’s so many.

Daniel:
There’s so many things, I’ll tell you about that in a second. One of the ones that we did which was just really, really fun was the problem that people don’t exercise enough. Yet when we’re given moments to exercise in our day-to-day lives, we often ignore them. A classic example of that is when we’re faced with a choice of taking the escalator or taking the stairs, and we take the escalator. How do you get more people to take the stairs?

What we did, building on an idea that was done in Sweden, is we went to lower Manhattan, very close to Wall Street, and there was this escalator and a set of stairs, and we transformed the stairs into beat-box stairs. Every time someone stepped on a step, it made a beat-box sound like ‘boom, wicky, chicky’, and suddenly we had everybody taking the stairs. It’s an interesting strategy. Instead of saying ‘You have to exercise, shame on you for not exercising’ or wagging your finger at people to exercise, all we did was make the choice of climbing the stairs a little bit more fun and it had a dramatic effect on how people behaved.

Jason:
So what you did is you gamified stairs, and not only gamified it, but made it an opportunity for self-expression.

Daniel:
I think there’s something to that, no joke. It wasn’t pure gamification in the sense that there weren’t points or anything like that. It really was partly about self-expression, but it was also as much about social things. We had people going up and down the stairs together, we had people trying to make music together.

Jason:
Pardon the pun ‘make music together’, that’s a good one.

Daniel:
Yeah, and so what we ended up doing was changing people’s behavior in a subtle, non-coercive way and then you’ve got more people exercising. On the sales one too, we spent a lot of time thinking about money. We decided to think ‘Can we use some of the science of persuasion and selling to help this guy named Brian?’ He’s a small entrepreneur, he basically makes artisanal, home-made beef jerky and he sells it at farmer’s markets. We went with him to a farmer’s market in New York State. I was in his booth and saw how he was doing things, and then we said ‘You know what, let’s try some different strategies based on what the research tells us’. He was offering up a little plate behind his counter in the farmer’s market and he’d say ‘Would you like a taste?’

We encouraged him to come out from behind the booth and actually use the word ‘free’ all the time. Everybody loved free stuff. ‘Free’ triggers a kind of psychosis in our head, and so instead of saying ‘Would you like a taste?’, it was ‘Would you like some free beef jerky?’, ‘Would you like a free sample?’ He suddenly got a lot more people that way.

We also triggered the principle of reciprocity in that one reason that companies and stores use free samples is that human beings are natively reciprocal. If you do something for me, I’m inclined to do something for you and so by giving somebody something for free, they might say ‘Oh, well you did me a solid, I’ll do you a solid by buying some of your jerky’.

The third thing that we did which was really interesting – there’s some very interesting research that shows the power of rhymes, that rhymes increase what cognitive scientists call ‘processing fluency’. They go down easier and actually are believed more deeply. We had him out there using rhymes, saying “Don’t be a turkey, try some free jerky”.

Jason:
How did that work?

Daniel:
It worked great! It was amazing!

Jason:
Because it was entertaining.

Daniel:
It was entertaining, but it was more than entertaining. It stuck. It was like ‘Oh yeah, I’d be a fool not to have some free beef jerky’. We also did one a little bit more explicitly on his branding because a lot of the beef jerky that’s sold in stores is very, very heavily processed, not particularly good ingredients or anything like that. We had him out there saying “My jerky’s no mystery, I know its history” because it was home-made and artisanal and all that. This combination of things ended up doubling this guy’s sales and he’s still using them!

What we’re trying to do is show that if you pay attention to a little bit of the science, if you think a little bit differently, you can do a little bit better out there.

Jason:
Fantastic. You used Chris Anderson’s Free concept, and I love that book, by the way.

Daniel:
Yup.

Jason:
And then you got Robert Cialdini’s reciprocity law, so you’ve blended all of this great stuff. His sales, what, they doubled?

Daniel:
They doubled on that afternoon and they’ve continued to do very, very well. He changed the way that he did things, and you’re exactly right. I’m glad that you hat-tipped Chris Anderson and Robert Cialdini because Anderson’s book really showed some of the psychosis that takes over when people hear ‘free’, and Robert Cialdini’s book Influence is, to me, one of the very best non-fiction books anybody in business could read. It’s a classic, incredible book, and his principle of reciprocity is so powerful.

This is exactly what we’re trying to do. Cialdini is an academic, Anderson is not, but we’re trying to take these things that seem a little academic and this research that is a little bit varied, and we’re trying to bring it to the surface and say ‘Hey, you can use this to make your community better. You can use this to get a little bit more exercise. You can use this to sell some more beef jerky.’

Jason:
Fantastic. Do you have one of those that worked the best? Did you keep stats on all of the different approaches or did you sort of blend them all together?

Daniel:
We kept stats on everything, that was a very important part of the show. We would always establish what the base-line metric was for something and then we would see whether our intervention improved it. Some of the stuff is apples and oranges, so it’s hard to compare which one worked better than the other. If we’re trying to get people to use a revolving door rather than a side door, versus how do you get people to apply sunscreen on the beach, it’s hard to compare those two things.

A lot of the stuff we did worked. Occasionally, we did stuff that actually made the problem worse, but we showed that on air too. This is not one of those confected, very artificial reality shows. A classic example of this is we took on the problem of bike theft in New Orleans and I had what I still think is a brilliant idea.

Jason:
We’ll be the judge of that!

Daniel:
People were the judge of that, as you’ll see in a moment. You can be the judge, they were really the jury. They issued their verdict pretty swiftly on this one. Bike theft in New Orleans is a big problem just because of the way it’s configured; certain neighborhoods are easier to get into with a bike rather than a car, but New Orleans has a lot of challenges. The police can’t be everywhere. We heard about this thing that they did in one city in India where they also had insufficient police presence. There they created these life-size cardboard cut-out police officers. If you think about like a scarecrow, that’s basically what it was. The idea is that if someone sees it from afar, you really can’t tell whether it’s a real police officer or not, you really can’t.

Also, there’s this kind of a secondary theory that simply the image of authority can affect people’s behavior. We used that and we even doubled down and used some very interesting research on how men with especially wide faces – if the ratio of the width of their face to a certain aspect of the height of their face is very large – that’s a marker for aggression. There’s some very interesting research on that.

Jason:
That’s interesting because I’ve heard that prisons are full of men with really short thumbs. Have you heard that one?

Daniel:
I’m not sure about that one, but they’re full of men with really short faces. It’s really quite remarkable. If you measure the ratio of the width of your face at its widest point to essentially the height from your eyebrows to the top of your lip, men with a very high ratio correlate with aggression. It’s freaky.

Jason:
That is freaky. So Dan, that’s really quite interesting, and then it begs the question of: Maybe if that facial characteristic is considered, for example, and I don’t know if it is or not, less attractive, are they more aggressive because life didn’t open doors for them, or are those genetics causing that face to be that way, and that’s a trait of a more aggressive person? What do you make of that?

Daniel:
That’s a great question. I don’t know.

Jason:
Chicken or egg?

Daniel:
I think the answer to chicken or egg in that case is yes. It’s both. In that case, the facial width to height ratio is physiological. It has to do with the presence of testosterone, so it’s a physiological characteristic. It’s not necessarily the case that it’s not considered attractive, but what it might do is that if it is a marker for aggression, or that it correlates for aggression (it doesn’t mean that every man with a high facial width-height ratio is going to be a murderer)..

Jason:
Yeah, of course not, but it might suggest a predilection.

Daniel:
Right, of course, and so if I’m a little bit more aggressive than another person, then maybe I’m not going to flourish as well at school, say, which could make me more aggressive.

Jason:
But it could make you a great athlete, for example.

Daniel:
Well, I’ll give you a great example of this, you’re spot on. Some researchers went out and they took the NHL, the National Hockey League, the yearbooks for each team, and they measured the facial width-height ratio of each player and that correlated almost perfectly with penalty limits.

Jason:
Wow.

Daniel:
I think it’s a really, really cool topic. I didn’t get a lot of it on the air, but what we had was we had people in our crew and everybody wanted me to measure their face.

Jason:
Right, I’m busy measuring my face right now!

Daniel:
Yeah, I measured mine. I’m slightly above the median in my ratio, nothing super aggressive.

Jason:
That was obviously a survival mechanism in the more barbaric era from times gone past, or maybe present times in some places!

Daniel:
Oh, sure. Certainly, evolution probably selected for some amount of aggressiveness. Not probably wild amounts, but some amounts because you’re more likely to survive.

Anyway, taking us all the way back to bike theft in New Orleans, we found an actor with an especially wide face and had him pose for these cardboard cut-outs. He really looked menacing, he looked like he was going to kick your butt. We put him in a police uniform and we put these life-size cardboard cut-outs of a cop in bike theft hotspots all over New Orleans to try to deter bike theft. We measured the bike theft before, we measured the bike theft after, and here’s what happened.

The number of bike thefts went down, but the bad news is that the reason was that people stole all the cut-outs!

Jason:
[Laughs].

Daniel:
After a day, all the cut-outs had been stolen. That was one that didn’t work so well. That’s why I’m saying it; I thought this was such an awesome idea, I thought ‘We’re going to nail this thing, it’s going to be such a cost-effective solution for police forces’ and it totally back-fired.

Jason:
The title of one of your books – To Sell is Human. Why did you pick that title? Why is selling human?

Daniel:
First of all, it’s something that all of us do all the time, whether we like it or not. If you look at how, just think about on the job, let alone all the other aspects of our lives – look at how people actually spend their time on the job. They’re spending an enormous portion of it persuading, influencing, convincing, cajoling. You’re an employee and you’re trying to get your boss to free up some resources, or you go to a meeting and you’re pitching an idea, or you’re a boss and you’re trying to get your employees to do something different or do something in a different way. We’re selling all the time. That’s one reason that it’s human.

The second reason that it’s human, and probably a deeper reason is that today especially, in a world where no-one has a monopoly on information, where there isn’t as much asymmetric information as before is that the way to do it well, the way to be effective as a persuader, a convincer, a seller is to actually be a little bit more human. It’s drawing on some fundamentally human characteristics like the ability to take someone else’s perspective, the ability to listen, the ability to – as I said before – to see things from someone else’s point of view, the ability to put the other person first. Those kinds of fundamentally human qualities actually make us more successful today.

Jason:
Very interesting. Now, in the Nat Geo show, you discovered something interesting that there’s a connection between saving for retirement and using sunscreen?

Daniel:
[Laughs]. Yeah, believe it or not, there is. This is interesting. There’s some great research out of NYU, a guy named Hal Hershfield who was wondering why people don’t save for retirement. It’s crazy, right? It’s totally against your interests to save for retirement.

Jason:
You mean it’s with your interest, right?

Daniel:
Sorry, sorry, it’s totally against your interest NOT to save for retirement. You’re crazy not to. It’s a foolish move. The reason is what economists call hyperbolic discounting, which is what you and I and other human beings think is planning for the future. We’re much more likely to take small pay-offs now to larger pay-offs in the future. Hershfield was trying to save this problem of why don’t people save for retirement.

What he discovered was something really really intriguing – we think of ourselves today and ourselves; let’s take someone who’s in their forties. She thinks about herself in her seventies as a different person. I like you Jason, but I’m not going to save money for your retirement.

Jason:
Darn!

Daniel:
And so they think of them as a different person. What Hershfield decided to do was this – let’s say we have a 45-year old, we’ll call her Maria. We want 45-year old Maria to save for retirement; he did his experiment where if people saw an age-advanced photograph of themselves with the software that allows you to see what you might look like at age 70 or 75. If they saw themselves at age 75, that closed the gap between their view of themselves today and their view of themselves tomorrow. They realize ‘Oh wait, that is me’, and it made them more likely to save for retirement. Fascinating research.

Jason:
So what happened with the sunscreen?

Daniel:
We did the same thing. We said ‘Let’s use that for sunscreen’. People don’t use sunscreen, they get skin cancer and the incidence of applying sunscreen is much lower than you might think. We went to the Jersey Shore and we set up a photo booth. The photo booth said ‘Come in and see a vision of your future’. We had people come in and they pressed a few buttons, it took their photograph and using software, we showed them what their skin would look like with 20 or 25 years of sun exposure.

Jason:
[Laughs]

Daniel:
You got it! That’s exactly it. That’s what people said – ‘Oh boy’. They were yelping, and as a consequence of that, people started applying sunscreen. They would come out of our photobooth and start applying sunscreen because they were basically choosing the short-term pay-off of ‘Ooh, the sun feels really nice’ to the longer term reward, which is not dying.

They had a hard time thinking of themselves in the future and themselves today as the same person and this photobooth that we devised and built on this research of retirement savings ended up really increasing the use of sunscreen on people. It was really amazing. We had people leaving the photobooth and immediately asked for sunscreen and started applying it because they were so horrified about what they looked like.

Jason:
In economics, we all know about the concept of net-present value, or at least a lot of us do. When I talk about inflation in my various seminars, I always quote one of my childhood teachers about inflation, and it was Wimpy from Popeye. He always said “I’ll gladly pay you Tuesday for a hamburger today”. He understood the future value of money, which would be lower than it was today, right?

It sounds like we discount out future self, and that’s just a human tendency, isn’t it? Maybe it comes from back in evolutionary days when we didn’t know if we would live that long. We still don’t, but it’s much more certain than maybe it ever has been in human history, right?

Daniel:
I think that’s actually a really good point. That explanation makes a ton of sense to me. Let’s take something where you’re talking about net present value or your time value of money. That was not a concept when we were evolving because first of all, we didn’t have money, and second of all, we didn’t have a lot of time.

Jason:
We didn’t have much of a future.

Daniel:
Basically, you’re just trying to get through the day. You’re just trying to make sure that the saber-toothed tiger doesn’t eat you today so you can wake up on Thursday. I think that’s probably part of why we have that cognitive bias toward the short-term pay-off versus the long-term pay-off, which is why a lot of us go awry and why we need certain kinds of interventions to help us behave a little bit better. It’s not because we’re bad people, it’s just because maybe as you’re implying or suggesting, that our brains are not perfectly equipped for the modern world.

This is what’s effective about things like retirement savings. People that work in a company have a chance to contribute to their 401(k) and get it matched, and they don’t do it. One of the most effective things to stall that problem was automatic enrollment and basically changing the default. People are automatically enrolled in their 401(k) program at the company. They can opt out, but no-one does because we just go through these default behaviors.

As we were talking about at the top of the program, there are these subtle, non-coercive ways to help change people’s behaviors, change our own behavior for the better.

Jason:
What motivates us? You talk a lot about motivation. What motivates us and how can we motivate others? The age-old question. I guess the first person we’ve got to motivate is ourselves, right? How can we be better at motivation?

Daniel:
We’re motivated by a lot of things. Let’s go back to what you were talking about before. We’re motivated by biological things – we eat when we’re hungry, we drink when we’re thirsty. That’s a form of motivation. We are motivated by rewards and punishments, there’s no question about that. In certain circumstances, if you reward behavior you’ll get more of it, if you punish behavior you’ll get less of it.

I think what we’ve missed out on is that human beings have another set of motivators that in some level economists and even biologists have a harder time explaining. We do things because we like them. We do things because we get better at them. We do things because it’s the right thing to do. We do things because we like having control over our own lives. That third set of motivators is a more kind of intrinsic motivator, but they’re also really, really important. I think the problem we have at organizations is that we only rely on those first two sets as biological motivators and the reward and punishment behaviors, and we don’t take a three-dimensional view of people. I think that’s at the heart of the problem.

One of the great scholars in motivation, a guy named Edward Deci, who’s at the University of Rochester and is really one of the legendary figures in the scientific study of motivation, said something really, really important. He said we’ve got to get past this idea that motivation is something that one person does to another, and understand that it’s something that we do for ourselves. Instead of trying to motivate other people in a controlling way, you’re much better off trying to change the context, change the environment so that they can motivate themselves.

Jason:
How do we change that context and environment and how do they motivate themselves? We need to leave it to them?

Daniel:
Yes and no. All kinds of things. It really depends on what people are doing, but there’s a lot of evidence. I’ll give you a great study that explains this – it’s a study of fundraisers at the University of Michigan. These are work-study students who are making phone calls to University of Michigan alumni to raise money for the school. The researchers divided the student callers into three groups, and everybody is treated the same way. They have the same kind of call list, the same script, etc etc. The only thing different is what they do for the 5 minutes before they get on the phone.

The first group is the control group so they read 5 minutes of something neutral, ants and bees or something like that. The second group for the 5 minutes before they get on the phone reads letters from people who used to work at the call center, testifying to the personal benefit of having worked there. “My name is Jason, I worked at this call center for a year and a half as an undergraduate, I learned communication skills and sales skills and I’m now a banker in New York and it’s been very useful to me”. The third group also read letters, but they read letters from people that were on the receiving end of the money that was raised. They’d get a letter saying “My name is Jane Smith, my parents couldn’t afford to send me to College but I got a scholarship to the University of Michigan, funded by some of the money raised here and I’m now a pediatrician.”

Three groups. One group is our control group, the second group had 5 minutes of reading about the personal benefit, the third group had 5 minutes of reading about the purpose. It turned out that the third group performed twice as well, earned twice the amount of weekly pledges, twice the amount of donation money as the other groups and it was simply that 5 minute intervention of essentially explaining to people why you’re doing this in the first place, why you’re raising the money, what the point is.

Jason:
I’ve heard about the studies where someone will want to cut in line in front of someone and literally by using the word ‘because’ it makes it completely different – even if the reason is totally stupid. Like, “Can I cut in front of you because I’m in a hurry?” Obviously you’re in a hurry, duh!

Daniel:
That’s a really interesting one, too. I think that that’s going to work in the short-term. Cialdini, who we mentioned before, has written about that particular study and it’s a fascinating study. If you go into the workplace and you want people to perform well, if people know why they’re doing what they’re doing, they’re going to perform a little bit better. There’s a lot of research out there showing, for instance – there’s another piece of research on lifeguards. If you have lifeguards towards the end of the summer read an article about lifeguards who save people’s lives and the other lifeguards don’t read that article and they read about ants and bees, or something like that, the guards who were reminded of what lifeguards do and why they do it were much more likely to re-apply for the next summer.

Again, you’re not saying ‘You can do it, you’ve got this’ and you’re not threatening people saying ‘If you don’t do this right, I’m going to blah blah blah’. You’re doing something a little bit more subtle and in the workplace, the key is basically to hire great people. That’s hugely important. Hire great people, pay them well and fairly and then give them some autonomy over their work, help them get better at something that matters and help them understand not only how to do what they’re doing, but why they’re doing it in the first place. Show them the contribution that they’re making, and that ends up being a very effective recipe for enduring motivation.

Jason:
There’s really just no question, is there, Daniel, that the human being wants to have a purpose and a mission and a reason. It’s not just about, for example in the workplace, making a living or making money – it’s much deeper than that, isn’t it?

Daniel:
It is. Human beings in general want to have a sense of meaning and it’s part of who we are and people seek that understanding of meaning in different ways. Some are through religion, some through science, some through the workplace, some through volunteer activities. It’s how we are, it’s what makes our species different from other species. I’m not sure that even higher level cognitive species like apes or dolphins or pigs are sitting around wherever dolphins and pigs and chimpanzees sit – probably not at a bar!

Jason:
That would be a good joke, though!

Daniel:
Yeah, a dolphin, a pig and a monkey walked into a bar. I don’t think a dolphin is saying ‘Why am I here?’ I don’t think that a pig is saying ‘What’s the point of all this?’

Jason:
Well, we don’t know. That’s yet to be discovered, but I agree, it doesn’t seem like it.

Daniel:
If there were a way to know and we were taking bets, I would bet that they’re not thinking about that, but you’re absolutely right, we don’t know. We certainly know that from a very early age, that’s what human beings do. They want a sense of meaning, they want a sense of purpose, they want to get up in the morning and do something where it matters, where it makes a contribution and where if they didn’t show up, somebody would care.

Jason:
Absolutely. That’s a very, very good point. For everybody listening, you need to try and institute that in your workplace and in your personal life and it’ll just make you a lot more effective. That’s a very good message. Daniel, tell people where they can best find you. You’re all over the place, but is it www.DanPink.com, is that the best website?

Daniel:
Yeah, you can find me at www.DanPink.com, on Twitter at @DanielPink and also on the National Geographic Channel. The show is called Crowd Control, it’s on Monday nights on the National Geographic Channel at 9pm Eastern Central and then also again on at 9pm Pacific time as well.

Jason:
Good stuff. Well, a closing thought on any part of your work, Dan, whether it be motivation or whatever. I’ll just give you the last word.

Daniel:
I’m not that different from anybody else. I’m just like everybody else; I want to do something that matters and have a purpose. I want to feed my family, obviously, but once I feed my family and once the kids have winter coats, you think about why you do what you do. To me, both this television show and the books that I’m writing – if someone out there does something a little differently to make their own lives a little bit better, I feel pretty good about that.

Jason:
Daniel Pink, thank you for joining us.

Daniel:
Jason, thanks for having me.

Outro A:
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