Rory Sutherland's '11 Rules of Alchemy'
“Not everything that makes sense works, and not everything that works makes sense.”
You can never get enough of Rory Sutherland.
He’s like crack cocaine for those interested in marketing and human behaviour; once you’ve heard him on one podcast, you want to listen to them all.
We’re massive fans and have collaborated with him on our bestselling Behavioural Economics course. He has a fantastic mind, is an exceptional storyteller and is a fountain of counterintuitive wisdom.
It’s no surprise that his book Alchemy: The Surprising Power Of Ideas That Don’t Make Sense is one of our favourites, and you can read our review of this brilliant book here.
If you’re short of time, below are Rory’s ‘11 Rules of Alchemy’:
1. The Opposite of a Good Idea Can Also Be a Good Idea
Some of the best solutions come from flipping conventional wisdom on its head.
E.g. If someone had said they were going to create a rival for Coca-Cola that tasted awful and came in a smaller can but was twice the price, you would have laughed at them. But someone did. It’s called Red Bull, and it made its founder a multi-billionaire.
2. Don’t Design For Average
Many companies try to solve problems by creating a solution for the average person.
Instead, a better approach is to explore extreme ideas that unconventional people might adopt. Once these initial users have embraced them, they can enter the mainstream.
E.g. The sandwich was invented by someone with an extreme use case. The Earl of Sandwich was a hardcore gambler and needed food in a form that allowed him to stay at the card table while he ate. This demand led to the wacky idea of adding a filling between two slices of bread. As a bonus, no cutlery or plates were required.
3. It Doesn’t Pay to be Logical if Everyone Else is Being Logical
The market often rewards unconventional thinking. If you zig when everyone else zags, you might stumble onto something great.
E.g. When Virgin Atlantic Airlines launched in 1984, they had to compete with well-established rivals. To succeed, they had to think and behave differently, such as providing complimentary ice cream, seat-back video screens, and in-flight massages.
4. The Nature of Our Attention Affects the Nature of Our Experience
How we perceive things affects our experience of them. A meal enjoyed with friends tastes better than the same dish eaten alone. In other words, perception is reality.
E.g. The type of music played in a shop can influence what you buy. One UK experiment tested playing music from different countries in a wine shop. The experiment found that French wine easily outsold German wine when French music was playing and vice-versa.
5. A Flower Is Simply a Weed with an Advertising Budget
Nature employs costly signals, which seems at first a waste of resources. However, they serve as a reliable way to demonstrate an individual's quality or fitness. It’s a similar approach in advertising.
E.g. Luxury brands signal their products are worth it by spending vast amounts on using attractive celebrities in advertising. This costly behaviour allows companies like Chanel to charge exorbitant amounts for scented water. A 100ml bottle of Chanel No.5 is approximately £100, making it £1000 per litre or 645 times as expensive as the petrol you put in your car!
6. The Problem with Logic Is That It Kills Off Magic
Logic and reason are great, but there are other options. What’s more, they lead to incremental improvements instead of breakthrough innovation.
E.g. Most companies fail because they double down on what’s worked in the past instead of trying to make risky bets on the future. Examples include Blockbuster, Kodak, Polaroid, Blackberry, Nokia, etc.
7. A Good Guess Which Stands Up To Observation Is Still Science. So Is A Lucky Accident
Many of the greatest innovations were discovered by accident. Unfortunately, most corporate environments don’t allow this type of ‘ happy accident’ to occur, but they should if they want to make progress.
E.g. Penicillin, the microwave, safety glass, dynamite, Velcro, the Post-It note, Vulcanised rubber, etc., were all created unintentionally.
8. Test Counterintuitive Things Only Because No One Else Will
Everyone tests the obvious stuff. Dare to explore what others dismiss, and you might discover untapped opportunities.
E.g. The counterintuitive appeal of the “no frills” business model. While many think people always prefer luxury, the success of budget airlines like EasyJet and Ryan Air suggests that people also value simplicity and low cost when you frame it the right way. Another example is subscription meal kits. Paying extra for ingredients you could buy in the supermarket and recipes you could find online. And then you still have to cook it yourself!
9. Solving Problems Using Rationality Is Like Playing Golf with Only One Club
Sometimes, the logical path isn't the only game in town.
E.g. Rory suggests that instead of spending billions to make the Eurostar train between London and Paris slightly faster, making the ride more enjoyable (for example, by having attractive people pour champagne for guests) could have the same, if not better, impact on passengers satisfaction—for far less money.
10. Dare to Be Trivial
Small details often hold the keys to big changes. What seems minor can be mighty.
E.g. The Five Guys burger chain gives away free peanuts while customers wait for their meals. On the surface, it might seem like they’re just being generous or offering a snack to keep customers busy. However, shelling and eating peanuts is a bit laborious and time-consuming. While you’re engaging in this activity, your perception of how long your burger is taking to prepare is skewed. You’re less likely to notice or mind a slightly longer wait.
11. If There Were a Logical Answer, We Would Have Found It Already
Complex problems don’t have straightforward solutions. That’s why they’re complex! You have to attack the challenge from an oblique angle. The problem is most company executives are afraid of making mistakes, so they would rather fail by trying a conventional approach.
E.g. When most airlines focused on fuel efficiency or cramming more seats to cut costs, Southwest Airlines focused on minimising the time planes spent on the ground. By doing so, they made their entire operation more efficient and saved money.
So there you have it, Rory Sutherland's 11 Rules of Alchemy - a quirky guide to thinking differently, embracing the illogical, and finding magic in the mundane.
If you want more of Rory’s wisdom and wit, why not read The Best of Rory Sutherland and 42 of Rory Sutherland’s Best Quotes?
