The Bathtub Test

During a visit to the mental asylum, a visitor asked the Director how do you determine whether or not a patient should be institutionalized.

“Well,” said the Director, “we fill up a bathtub, then we offer a teaspoon, a teacup and a bucket to the patient and ask him or her to empty the bathtub.”

“Oh, I understand,” said the visitor. “A normal person would use the bucket because it’s bigger than the spoon or the teacup.”

“No.” said the Director, “A normal person would pull the plug. Do you want a bed near the window?”

price-is-right

Case Studies – Pricing Model

The below case studies is about the change in consumers thought process when alternatives are given which make them think irrationally

Case study 1 – Economist Subscription

An ad for an Economist subscription gave 3 options

1.      Print only for $59
2.      Web subscription only access for $125
3.      Print and web access for $125

Obviously third option looks like the best deal. In an experiment with the above setup 16 subjects chose first option, zero subjects chose second option and 84 subjects chose third option. What if we remove second option and let subjects choose options first and third? The results should be the same right, after all the deal is the same, but only 32 chose the third option and 68 chose the first option.  It was only by the third options (Print and web access) relation to the option 2 (Web subscription only) makes the third option look so good.

The subscription makers for Economist knew this and used it to boost the sales.

Case study 2 – Cost of a wine bottle

A wine bottle was shown to few students. They were asked to write the last two numbers of their social security number (SSN) as the price of the wine bottle, on a separate sheet of paper given to them. Subsequently, they were also asked to write “Yes” if they would wish to buy the wine bottle for that price. And also quote what would be the maximum price they would pay to own that wine bottle. The experiment revealed, that the people having the highest number as their last two digit of SSN (ex: 99) bid the highest and those having the lowest number as their last two digit of SSN (ex: 11) bid the lowest. Now why would the students having the highest two digit SSN bid the highest for the wine bottle?

Because they have bid the price of the wine bottle in relation to their social security number.

hare_tortoise - management lesson

Management Lesson – Compete against the situation not the rival

Once upon a time a tortoise and a hare had an argument about who was faster.

They decided to settle the argument with a race. They agreed on a route and started off the race. The hare shot ahead and ran briskly for some time. Then seeing that he was far ahead of the tortoise, he thought he’d sit under a tree for some time and relax before continuing the race. He sat under the tree and soon fell asleep. The tortoise plodding on overtook him and soon finished the race, emerging as the undisputed champ. The hare woke up and realized that he’d lost the race.tortoise-hare-management-lesson

The moral- “Slow and steady wins the race. This is the version of the story that we’ve all grown up with.”

But the story doesn’t end here …

The hare was disappointed at losing the race and he did some soul-searching. He realized that he’d lost the race only because he had been overconfident, careless and lax. If he had not taken things for granted, there’s no way the tortoise could have beaten him. So he challenged the tortoise to another race.

The tortoise agreed. This time, the hare went all out and ran without stopping from start to finish. He won by several miles.

The moral – ” Fast and consistent will always beat the slow and steady. It’s good to be slow and steady; but it’s better to be fast and reliable.”

But the story doesn’t end here …

The tortoise did some thinking this time, and realized that there’s no way it can beat the hare in a race the way it was currently formatted. It thought for a while, and then challenged the hare to another race, but on a slightly different route. The hare agreed. They started off. In keeping with his self-made commitment to be consistently fast, the hare took off and ran at top speed until he came to a broad river. The finishing line was a couple of kilometers on the other side of the river.

The hare sat there wondering what to do.

In the meantime the tortoise trundled along, got into the river, swam to the opposite bank, continued walking and finished the race.

The moral – “First identify your core competency and then change the playing field to suit your core competency.”

But the story doesn’t end here …

The hare and the tortoise, by this time, had become pretty good friends and they did some thinking together. Both realized that the last race could have been run much better. So they decided to do the last race again, but to run as a team this time. They started off, and this time the hare carried the tortoise till the riverbank. There, the tortoise took over and swam across with the hare on his back. On the opposite bank, the hare again carried the tortoise and they reached the finishing line together. They both felt a greater sense of satisfaction than they’d felt earlier.

The moral – “It’s good to be individually brilliant and to have strong core competencies; but unless you’re able to work in a team and harness each other’s core competencies, you’ll always perform below par because there will always be situations at which you’ll do poorly and someone else does well.

Teamwork is mainly about situational leadership, letting the person with the relevant core competency for a situation take leadership.

Note that neither the hare nor the tortoise gave up after failures. The hare decided to work harder and put in more effort after his failure. The tortoise changed his strategy because he was already working as hard as he could.”

In life, when faced with failure, sometimes it is appropriate to work harder and put in more effort. Sometimes it is appropriate to change strategy and try something different. And sometimes it is appropriate to do both. The hare and the tortoise also learnt another vital lesson. When we stop competing against a rival and instead start competing against the situation, we perform far better.

To sum up- the story of the hare and tortoise has much to say:  Chief among them are that fast and consistent will always beat slow and steady;work to your competencies; pooling resources and working as a team will always beat individual performers; never give up when faced with failure; & finally, compete against the situation – not against a rival.

Mind your language - management lesson

Management lesson – Mind Your Language

There were these 4 guys, a Russian, a German, an American and a French, who found this small genie bottle. When they rubbed the bottle, a genie appears.

Thankful that the 4 guys had released him out of the bottle, he said, “Next to you all are 4 swimming pools, I will give each of you a wish. When you run towards the pool and jump, you shout what you want the pool of water to become, and then your wish will come true.”

The French wanted to start. He ran towards the pool, jumped and shouted “WINE”. The pool immediately changed into a pool of wine.  The Frenchman was so happy swimming and drinking from the pool.

Next is the Russian’s turn, he did the same and shouted, “VODKA” and immersed himself into a pool of vodka. The German was next and he jumped and shouted, “BEER”.  He was so contented with his beer pool.

The last is the American. He was running towards the pool when suddenly he steps on a banana peel. He slipped towards the pool and shouted, “SH**!!!!!!!………IT”

MORAL OF THE STORY:
Mind your language; you never know what it will land you in