Research by Krannert prof Karthik Kannan shows companies use instincts to elicit behavior from consumers, employees
Tuesday, September 20, 2016
The obvious strategy for a clothing retailer is to have as much product on the sales floor as possible to yield high sales. The clothing needs to be available to be bought, right?
For women, it turns out, that’s a counterproductive strategy. Research shows that women want to feel a sense of individuality when buying clothes. They don’t want to know that hundreds of other women in town also bought that dress.
The clothing store, Zara, 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.
Purdue University Professor Karthik Kannan calls the concept employed by Zara “design for instincts,” and it has far-reaching effects, from creating products to developing processes for multinational corporations.
As businesses grow in this age of rapid technology changes, they’re having to pivot more quickly as technological innovation happens. Design for instincts essentially tells businesses they need to stop and consider the consumer — and human nature — to be successful. This seems obvious, but it can get lost on our “next big thing” technology landscape.
“It’s a very simple, but yet profound, concept,” says Kannan, a professor in Purdue’s Krannert School of Management.
He will explore 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 ’16, a conference on the risks and rewards of new technology at Purdue University. Dawn or Doom will be held Monday and Tuesday, Oct. 3 and 4, on the Purdue West Lafayette campus and is free and open to the public.
A focus on human instincts also is important to major companies like General Electric, a big employer of Purdue graduates, both from the perspective of its customers and its employees. To keep up with rapid change, and to attract top talent, GE decided it would have to develop intentional and dynamic processes and policies. This led to the technique called “FastWorks.”
FastWorks incorporates a cross-section of departments to form teams that are then in constant communication with the consumer. This way, they’re better able 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. “Before they would do all the deep data dives and then figure out what best to do. They’re now saying, ‘Let me go ask the consumer;’ it’s about understanding the end user.”
Employee policy-wise, GE is trying something less common in companies of its size and maturity, but in place routinely at some startups in Silicon Valley: unlimited vacation days. The idea is that managers and executives are responsible for seeing that what needs to get done gets done, and as long as it does work schedules are fluid. Kannan says this appeals to an employee’s instinctual desire to be independent in their job.
He thinks that soon we’ll see many traditional jobs become much like jobs at GE and at tech startups. They’ll require a “value-add” component, 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 that would have seemed odd in the past.
: Professor Karthik Kannan will be speaking at Dawn or Doom’16 at 9 a.m. Tuesday, Oct. 4 in Purdue’s Stewart Center. Press registration is available at http://www.purdue.edu/dawnordoom/Press. An animated .gif is available at https://news.uns.purdue.edu/images/2016/dawn-logo.gif