How Human Behaviour Shapes Successful Business Strategies

How Human Behaviour Shapes Successful Business Strategies

People are fundamentally sheep – isn’t that what we’re always told? Sure, everyone likes to think that they are an individual and that they make individual decisions about what they do and how they select to act, but the reality is that most of what we do is heavily influenced by the activity of others.

This is human behaviour, which is herd-like. As social creatures, what we do or don’t do is often based on what others are doing or not doing. People don’t really think about their actions. In fact, Mark Earls, a leading human activity and strategy expert, would argue that very often thinking comes after the fact – people act and process it later. He would also state that there’s not much point in asking people why they do what they do, because they don’t actually know.

Now, the trick is to harness the power of human activity to create successful business strategies and to build powerful brands. If you think about the power of crowd mentality in your strategies (which perhaps goes a tiny against conventional wisdom about how people make choices) you are virtually guaranteed to have a strategy that will succeed. Why? Simply because you will be healthy to develop strategies that work by understanding peoples’ behaviour.  You will comprehend how new ideas really catch on and are disseminated, and how to create momentum and longevity behind your strategic objectives – whatever these might be.

Considering people are the number one resource in business today, it’s surprising how tiny we think about the true nature of human beings within the scope of business strategy. A century ago, the main resource of a business was capital which purchased the things a business needed to thrive such as land, materials, transport and so forth. This day though, up to 85% of the economy in developed countries is based on human interaction at a variety of levels.

This is why it’s important to comprehend human activity and to shape strategy around it – because people (staff, customers, suppliers and distributers etc) are an essential resource in today’s business world.

Mark Earls challenges strategists to really think about things. In an eBook entitled Understanding How Behaviour Shapes Strategy, he discusses his thinking on the subject of people and strategy. Thing is, our misconceptions about human activity and why people do things is what fundamentally undermines most strategies. A different view of people might just change the rules for forward-thinking businesses.

Earls contends that while Marketing attempts to shape mass behaviour, its attempts are poor. This is shown by the fact that most new products change within the first year, and the ones that survive struggle to make any long-lasting or substantial impact on the consumers’ behaviour.  He goes on to state that the reason for this is perhaps that our interpretation of what causes human activity and how to shape it is wrong.

Earls states there are two views that are fundamentally flawed in our understanding of what shapes behaviour.  Firstly, we think that to change activity we need to change minds when in fact the opposite is true. The second mistake we make is thinking that ideas and activity spread through “the corridors of influence”, through ‘The Few’ when in fact it is ‘The Many’ that really make the difference.

When you think about the relationship between attitudes and behaviour, how new ideas and habits get formed and how to create the momentum that creates real and lasting change you will find that the ideal strategies take human activity into account. Strategies in fact only work if they change human behaviour.  Whether you are dealing with staff, customers, investors or others, you first have to comprehend how people work and how new ideas catch on to appreciate what makes for successful business strategies.

Professor Richard Rumelt states its simply the focus of resources on business objectives. Visit UCLA Anderson School of Management www.anderson.ucla.edu Click here for more power videos from UCLA Anderson School of Management www.anderson.ucla.edu
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