Isegoria

Charles Duhigg explains the concept of keystone habits (in The Power of Habit) through the example of Paul O’Neill, who took over as CEO of Alcoa with a promise to make Alcoa the safest company in America:

The audience was confused. These meetings usually followed a predictable script: A new CEO would start with an introduction, make a faux self-deprecating joke — something about how he slept his way through Harvard Business School — then promise to boost profits and lower costs. Next would come an excoriation of taxes, business regulations, and sometimes, with a fervor that suggested firsthand experience in divorce court, lawyers. Finally, the speech would end with a blizzard of buzzwords — “synergy,” “rightsizing,” and “co-opetition” — at which point everyone could return to their offices, reassured that capitalism was safe for another day.

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“Now, before I go any further,” O’Neill said, “I want to point out the safety exits in this room.” He gestured to the rear of the ballroom. “There’s a couple of doors in the back, and in the unlikely event of a fire or other emergency, you should calmly walk out, go down the stairs to the lobby, and leave the building.”

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“I’m not certain you heard me,” O’Neill said. “If you want to understand how Alcoa is doing, you need to look at our workplace safety figures. If we bring our injury rates down, it won’t be because of cheerleading or the nonsense you sometimes hear from other CEOs. It will be because the individuals at this company have agreed to become part of something important: They’ve devoted themselves to creating a habit of excellence. Safety will be an indicator that we’re making progress in changing our habits across the entire institution. That’s how we should be judged.”

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Within a year of O’Neill’s speech, Alcoa’s profits would hit a record high. By the time O’Neill retired in 2000, the company’s annual net income was five times larger than before he arrived, and its market capitalization had risen by $27 billion.

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O’Neill believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization.

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These are “keystone habits,” and they can influence how people work, eat, play, live, spend, and communicate.

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At the time, Alcoa was struggling. Critics said the company’s workers weren’t nimble enough and the quality of its products was poor. But at the top of O’Neill’s list he didn’t write “quality” or “efficiency” as his biggest priorities.

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O’Neill figured his top priority, if he took the job, would have to be something that everybody — unions and executives — could agree was important.

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The key to protecting Alcoa employees, O’Neill believed, was understanding why injuries happened in the first place. And to understand why injuries happened, you had to study how the manufacturing process was going wrong. To understand how things were going wrong, you had to bring in people who could educate workers about quality control and the most efficient work processes, so that it would be easier to do everything right, since correct work is also safer work. In other words, to protect workers, Alcoa needed to become the best, most streamlined aluminum company on earth.

He identified a simple cue: an employee injury. He instituted an automatic routine: Any time someone was injured, the unit president had to report it to O’Neill within twenty-four hours and present a plan for making sure the injury never happened again. And there was a reward: The only people who got promoted were those who embraced the system.

Unit presidents were busy people. To contact O’Neill within twenty-four hours of an injury, they needed to hear about an accident from their vice presidents as soon as it happened. So vice presidents needed to be in constant communication with floor managers. And floor managers needed to get workers to raise warnings as soon as they saw a problem and keep a list of suggestions nearby, so that when the vice president asked for a plan, there was an idea box already full of possibilities.

To make all of that happen, each unit had to build new communication systems that made it easier for the lowliest worker to get an idea to the loftiest executive, as fast as possible. Almost everything about the company’s rigid hierarchy had to change to accommodate O’Neill’s safety program. He was building new corporate habits.

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Then, as email habits became more ingrained and comfortable, they started posting information on all kinds of other topics, such as local market conditions, sales quotas, and business problems.

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This is the final way that keystone habits encourage widespread change: by creating cultures where new values become ingrained. Keystone habits make tough choices—such as firing a top executive— easier, because when that person violates the culture, it’s clear they have to go.

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He got fired because he didn’t report the incident, and so no one else had the opportunity to learn from it. Not sharing an opportunity to learn is a cardinal sin.”

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On average, workers are more likely to get injured at a software company, animating cartoons for movie studios, or doing taxes as an accountant than handling molten aluminum at Alcoa.

“When I was made a plant manager,” said Jeff Shockey, the Alcoa executive, “the first day I pulled into the parking lot I saw all these parking spaces near the front doors with people’s titles on them. The head guy for this or that. People who were important got the best parking spots. The first thing I did was tell a maintenance manager to paint over all the titles. I wanted whoever got to work earliest to get the best spot. Everyone understood the message: Every person matters. It was an extension of what Paul was doing around worker safety. It electrified the plant. Pretty soon, everyone was getting to work earlier each day.”

As Charles Duhigg explains in The Power of Habit, the tingling sensation from Pepsodent helped turn toothbrushing into a habit:

Yet, while everyone brushes their teeth, fewer than 10 percent of Americans apply sunscreen each day. Why?

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Because there’s no craving that has made sunscreen into a daily habit. Some companies are trying to fix that by giving sunscreens a tingling sensation or something that lets people know they’ve applied it to their skin.

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“Foaming is a huge reward,” said Sinclair, the brand manager. “Shampoo doesn’t have to foam, but we add foaming chemicals because people expect it each time they wash their hair. Same thing with laundry detergent. And toothpaste — now every company adds sodium laureth sulfate to make toothpaste foam more. There’s no cleaning benefit, but people feel better when there’s a bunch of suds around their mouth. Once the customer starts expecting that foam, the habit starts growing.”

In The Power of Habit Charles Duhigg shares some advertising history:

Hopkins was the man who had convinced Americans to buy Schlitz beer by boasting that the company cleaned their bottles “with live steam,” while neglecting to mention that every other company used the exact same method.

He had seduced millions of women into purchasing Palmolive soap by proclaiming that Cleopatra had washed with it, despite the sputtering protests of outraged historians.

He had made Puffed Wheat famous by saying that it was “shot from guns” until the grains puffed “to eight times normal size.”

He had turned dozens of previously unknown products — Quaker Oats, Goodyear tires, the Bissell carpet sweeper, Van Camp’s pork and beans — into household names.

And in the process, he had made himself so rich that his best-selling autobiography, My Life in Advertising, devoted long passages to the difficulties of spending so much money.

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Throughout his career, one of Claude Hopkins’s signature tactics was to find simple triggers to convince consumers to use his products every day. He sold Quaker Oats, for instance, as a breakfast cereal that could provide energy for twenty-four hours — but only if you ate a bowl every morning. He hawked tonics that cured stomachaches, joint pain, bad skin, and “womanly problems” — but only if you drank the medicine at symptoms’ first appearance. Soon, people were devouring oatmeal at daybreak and chugging from little brown bottles whenever they felt a hint of fatigue, which, as luck would have it, often happened at least once a day.

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“Just run your tongue across your teeth,” read one. “You’ll feel a film — that’s what makes your teeth look ‘off color’ and invites decay.”

“Note how many pretty teeth are seen everywhere,” read another ad, featuring smiling beauties. “Millions are using a new method of teeth cleansing. Why would any woman have dingy film on her teeth? Pepsodent removes the film!”

The brilliance of these appeals was that they relied upon a cue — tooth film — that was universal and impossible to ignore. Telling someone to run their tongue across their teeth, it turned out, was likely to cause them to run their tongue across their teeth. And when they did, they were likely to feel a film. Hopkins had found a cue that was simple, had existed for ages, and was so easy to trigger that an advertisement could cause people to comply automatically.

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Before Pepsodent appeared, only 7 percent of Americans had a tube of toothpaste in their medicine chests. A decade after Hopkins’s ad campaign went nationwide, that number had jumped to 65 percent.

There’s a bit more to the story:

Unlike other pastes of the period, Pepsodent contained citric acid, as well as doses of mint oil and other chemicals. Pepsodent’s inventor used those ingredients to make the toothpaste taste fresh, but they had another, unanticipated effect as well. They’re irritants that create a cool, tingling sensation on the tongue and gums.

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What they found was that customers said that if they forgot to use Pepsodent, they realized their mistake because they missed that cool, tingling sensation in their mouths. They expected — they craved — that slight irritation.