More than 40 percent of the actions people perform every day - that you perform every day - are not actually decisions you make, but they are the product of habits. We like to think of habits as traits that can't be changed, but it turns out that habits are malleable and knowing how to change them has profound implications, not just at the personal level, but also for companies and governments.
I spoke with Charles Duhigg, author of The Power of Habit, a few days back. He is a reporter for the New York Times. Here's a transcript of our conversation:
Fareed Zakaria: Tell the story of Alcoa. Paul O'Neill, who later becomes Secretary of the Treasury, is CEO of Alcoa. When he first comes in, Alcoa is not doing well at all, but he focuses on worker safety. Why?
Charles Duhigg: Everybody expected him to focus on productivity and efficiency, but what he said was worker safety is his number one goal, and it's because he recognized that there are these things that are called "keystone habits" within organizations.
And if you can change this one habit, you set off a chain reaction. And that's exactly what happened within Alcoa. By focusing on worker safety, he actually transformed the entire organization, and within two years they were at the top performer in the Dow Jones Industrial Average.
Fareed Zakaria: Oone of the things that goes on here is that people have more ability to change. They have more willpower than even than they think they have.
Charles Duhigg: In the last decade, our understanding of the science of habits has been completely transformed by neurological studies, and what we understand now is that every habit has these three components: a cue, a routine and a reward.
And if you diagnose these cues and these rewards, you can begin changing automatic behaviors in ways that we never really thought were possible previously.
Fareed Zakaria: So give me an example of what one would think of as a bad habit that you can change.
Charles Duhigg: Smoking is a great example. In the last decade, smoking rates have just plummeted in the United States. And part of the reason why is because we now understand why people smoke, that there's these cues, such as the time of day that triggers the behavior. But more importantly, it's delivering a reward that nicotine actually gives you this energy.
And so now interventions go in and what they say is, "Don't just try and quit smoking. Replace it with coffee, with exercise, with something that gives you that same reward," and we've seen an incredible decrease in the number of people smoking and their ability to quit.
Fareed Zakaria: And when you look at a company like Starbucks, it also tries to produce certain kinds of habits when dealing with, for example, disgruntled customers.
Charles Duhigg: That's exactly right.
One of the interesting things about Starbucks is that they have to sell customer service alongside that $4 latte. But they're dealing with a work force that's often 17-year-old high school graduates. So they have to teach them these life skills. And what they do is they design specific habits to use in corporate settings.
When an angry customer comes up, that's a cue for what they call a 'latte method," which is you listen and you thank them and give them a free cup of coffee, and then the reward is that basically you solve this problem. They take decision making out of the equation. They make the response automatic, and customer service productivity go up enormously.
Fareed Zakaria: Target tried to measure some of these issues. How did it do it?
Charles Duhigg: Well, Target has this really interesting project, as does most of corporate America, of intensely studying shoppers' habits. And Target actually used this to try to predict which women were pregnant by studying how their shopping habits changed. They got so good that they can essentially assign every woman who comes regularly through their doors a pregnancy prediction score and even estimate their due date within two weeks.
Fareed Zakaria: Why is that important to shopping?
Charles Duhigg: Well, what Target knows is that when you go through a major life event, your habits change, even if you're not aware of it. If you get married, the type of coffee you buy changes. If you got a divorce, the type of beer you buy changes. When you have a child, all of your shopping habits are up for grabs even if you're not completely aware of it.
Target knows that if they can get the right coupon in your hand at the right time, you'll start buying from them.
Fareed Zakaria: I suppose the fundamental question is can you change habits?
Charles Duhigg: Absolutely. Absolutely. And that's the biggest insight that we have. And it's not just personal habits, it's habits within companies, organizational habits, habits across societies. What we've learned in the last decade - particularly from neurological studies - is any habit can be changed. It doesn't matter how ingrained the behavior is; it doesn't matter how old the person is; if you can identify the cue and the reward and understand what's driving the behavior from a neurological perspective, the craving, then you can change that behavior. But you have to be deliberate about it.
CEOs have to actually think about their organizational habits. They can't just kind of try and do it on the fly. And good CEOs - Jack Welch, Louis Gertsner - when you talk to them, they talk about organizational habits and how important it is to get them right.
Fareed Zakaria: What habit have you changed?
Charles Duhigg: Well, I have actually lost 30 pounds since I started writing this book. And I'm training for the New York City marathon now.
Fareed Zakaria: So attribute it to this?
Charles Duhigg: I do. I got to say, I mean, it sounds like I'm selling snake oil, but it's actually true. I'm an investigative reporter for the Times. I'm not given to fashion trends, but if you understand the sense and figure out how to take apart these habits, you can actually change your life in these really important ways.