Following Instincts

Monday, February 6, 2017

The obvious strategy for a clothing retailer is to have as much product on the sales floor as possible to yield high sales. For women, however, that turns out to be a counterproductive strategy, says Krannert’s Karthik Kannan, whose research on "design for instincts" studies how different aspects of human instincts and biases can be exploited to nudge and manipulate behavior.

“Women want to feel a sense of individuality when buying clothes,” says Kannan, a professor of management information systems in the Krannert School of Management. “They don’t want to know that hundreds of other women in town also bought that dress.”

The clothing retailed Zara, for example, capitalized on this instinctual behavior by limiting the quantity of items and regularly moving those items around the store, so each time a woman shops at Zara, she’s not sure whether those pants she loved last time will be there or if they’ll ever go on sale. This tactic makes her think that she should buy them as soon as possible or they might be gone.

Kannan says design for instincts is a simple yet profound concept that has effects far beyond retailing, from creating products to developing processes for multinational corporations.

“As businesses grow in this age of rapid technology changes, they have to pivot more quickly as technological innovation happens,” he says. “Design for instincts essentially tells businesses they need to stop and consider the consumer — and human nature — to be successful.”

Kannan explored how the concept may play into the future economy and how to best prepare the next generation for it during his presentation at “Dawn or Doom,” an October 2016 conference on the risks and rewards of new technology at Purdue.

A focus on human instincts also is important to major companies like General Electric, he says, both from the perspective of its customers and its employees. To keep up with rapid change and attract top talent, GE developed intentional and dynamic processes and policies. This led to the technique called “FastWorks,” which incorporates a cross-section of departments to form teams that are in constant communication with the consumer to stay on top of what works and what doesn’t, regardless of trends.

“It’s thinking about what the consumer need is and designing systems with their input,” Kannan says. “It’s about understanding the end user.”

GE also is trying something less common in companies of its size and maturity, but in place routinely at many tech startups: unlimited vacation days. The idea is that managers and executives are responsible for seeing that the required works is completed, and as long as it is, work schedules are fluid.

Kannan thinks we’ll soon see many traditional positions become more like jobs at GE and startups, where employees need to be constantly innovating and finding new ways of reaching consumers, are adept at teamwork and have a level of freedom in their work. “It appeals to employees’ instinctual desire to be independent in their jobs,” he says.

A video of Karthik Kannan’s complete “Dawn or Doom” presentation is available on YouTube at https://youtu.be/OyPKmgvDKi0. To learn more about his research, visit www.designforinstincts.com.