Ogilvy – prominent advertising agency with network across the globe – UK Vice-chairman Mr. Roy Sutherland has been a proponent of behavioural solutions to complex real world problems and suggests avoiding materialistic interventions as far as possible. He explains this by giving example of the undersea train link between UK and France called ‘Channel Tunnel’. He says currently the time taken by a train to cover this distance is around 2 hours, and if we include the time taken to commute to the station, the total time spent by passenger to commute increases.
As it a human and business pursuit to seek innovation and drive efficiencies, engineers and urban planners have been considering a high-speed railway network to bring down the commute time by few percentages. Sutherland questions that if this marginal decrease in time taken to travel by pursuing efficiencies (few minutes) will in reality improve lives of the passengers. He suggests rather than a material intervention of this kind, urban-planners should look at improving the experience of the commuter by possibly providing free wifi facility on the train, gourmet food etc, and deliver a quality experience to the passengers that would make them enjoy the journey and influence them to choose this mode of travel more often.
This is just an example. What he is proposing is a change of mindset – that wishes to conquer the nature and drive towards never ending pursuit of impossible efficiency goals. His submission though very simple is effective, but controversial as any business would vouch for cost efficiencies. However, Sutherland’s line of thought is not a new one, and has percolated and has been accepted in various disciplines like in business and finance; urban planning; manufacturing; services etc.
Behavioural Finance professional in a retail investor’s case would study his life-expectations; priorities; value-system; duties and responsibilities; risk profile and then suggest an asset class/classes suited to his unique needs. Any decent financial planner would curb a retail investor’s motives that are driven by ignorance or greed. In marketing parlance similar approach would demand a behavioural shift in an organization to give utmost priority to its core business and seek diversification not out of greed but to create synergies among the related diversified businesses, with an objective to streamline the company expansion goals.
Pratik Pillai, Assistant Professor, Unitedworld School of Liberal Arts and Mass Communication (USLM)
Disclaimer: The opinions / views expressed in this article are solely of the author in his / her individual capacity. They do not purport to reflect the opinions and/or views of the College and/or University or its members.