5

What Do Magicians, Thieves, Advertisers, Politicians, and Negotiators Have in Common?

It is time to return to the basketball video that I described in the preface to this book. (I admit I am obsessed with this video.) As I mentioned, my friend Mahzarin Banaji tricked me and others in the room by directing us to count the number of players’ passes on the screen. If we hadn’t been busy counting passes, we would have clearly seen a woman carrying an umbrella walking among the players.

Banaji’s “trick” got me thinking about magic. How are so many magicians able to fool us into thinking their amazing feats violate the basic laws of physics? Most often it is because they rely on the same tool that Banaji used: misdirection. Magicians are masters at keeping entire groups of people from noticing what should be clearly visible to them. How do they do it? Just as Banaji’s task of counting basketballs misdirected me from noticing the woman with the umbrella, magicians are skilled at focusing our attention away from the key element of the trick and on some other sensory experience.

Banaji used her trick to educate. Magicians use their tricks to entertain. But many others use misdirection to benefit at your expense. In this chapter I hope to arm you with the tools you need to protect yourself against misdirection.

Taking advantage of our limited cognitive capacities, magicians divert our attention and cause us to overlook the obvious. One extreme example is David Copperfield’s Statue of Liberty trick. He appeared to make the statue disappear before the eyes of a live audience and millions of television viewers. Obviously the Statue of Liberty did not actually disappear. So how did Copperfield make it seem as if it had? Not by moving the statue but by moving the audience.

As a quick search of the Internet will tell you, unbeknownst to them or to anyone watching at home, the live audience stood on a rotating platform. The statue was visible through a pair of pillars that also stood on the platform. A large curtain was dropped between the pillars, hiding the Statue of Liberty from view. As the suspense mounted, the entire platform—including the live audience, the draped pillars, and the television cameras—rotated, but so slowly that the movement was imperceptible to those on the platform. Moreover the trick was filmed after nightfall in a location without visual landmarks (other than the statue). The platform rotated until the statue was no longer visible between the pillars. The curtain drew back; the audience predictably gasped. Add in lights and showmanship, and the statue had “disappeared.” Then the pillars were redraped, and the platform moved back in place to “restore” the Statue of Liberty.

When a skilled magician seems to make something appear or disappear, she is in fact taking advantage of the short time when our minds are attending to other information. Most card tricks, for example, rely on magicians’ dexterity and use a variety of misdirecting moves to keep you from noticing where the “magic” takes place. Magicians have developed the craft of diverting your attention with their gaze, a hand movement, the actions of an attractive assistant (this is why they are so attractive), a loud sound, or a flash of light. Magicians practice and then they practice some more so that their moves are seamless, and the audience remains focused on whatever task the magician is describing: the diversion.

One common magic trick is to remove someone’s watch without his noticing. The famous magician Jason Randal took former vice president Dan Quayle’s watch from him five times in under fifteen minutes. Randal is a virtuoso in misdirection and consequently an object lesson for any decision maker. Consider how Quayle’s watch was taken. When magicians perform this trick, they typically perform another magic trick simultaneously. Instead of thinking about his watch, the owner is focused on this other trick. Performing the other magic trick, it so happens, requires the magician to hold the wrist of the watch owner, at which time he unclasps the watch. Finally, he squeezes the person’s wrist, so that when he slips off the watch the person feels a sensation in his wrist that keeps him from focusing on the missing watch. The active gripping of the spectator’s wrist and almost violent jerking of the hands up and down is integral to the theatrics of the trick. The spectator never feels the smaller movement of the watch slipping off his wrist.

After speaking with many magicians about their work, I remain amazed by their skill, and all the more so because they all say that the same core elements repeat in each trick. Once you dismiss the notion that something actually mystical is occurring, logic suggests that misdirection can occur in only a fairly small number of ways—and in fact this is the case. As a result, magicians are very good at observing the tricks that lie behind other magicians’ magic, even if they have never seen the tricks before. Not all of us can become gifted magicians, but it is possible for us to learn to spot the misdirections at the heart of magic. This, as we’ll see, has implications for real-world contexts.

Magicians are hardly unique at using misdirection to get you to see what they want you to see (and nothing more); they are just the most entertaining example. They may also be the most skilled people in the world at creating misdirection. To succeed at their craft, magicians need to fool everyone most of the time. But people in many other fields and professions can succeed at their work simply by misdirecting most of the people most of the time.

It is not a coincidence that, historically, many successful magicians have also been skilled card cheats. Magicians and cheats develop amazing manual dexterity and use diversion tactics that keep you from noticing their manipulation of the location of specific cards. They can “shuffle” decks without actually changing the position of cards. They can lift two cards and make it appear as though they are lifting only one. And they mark cards, which can then “magically” be found.

Just as it is a short leap from magician to cheat, so it is from cheat to thief. Thieves use misdirection in ways that parallel the work of magicians and card sharks. Using a variety of different techniques, thieves can lead you to focus your limited attention in one direction while an accomplice steals your wallet, purse, or other valuable. A crook might create a distraction in a crowd while his partner takes advantage of the diversion to steal your goods. Or thieves may set up an engaging street performance to allow their partners to steal from you at the height of the act’s attraction.

Obviously I do not mean to conflate honest magicians with thieves. One entertains; the other breaks the law. And the misdirection that is the source of both their livelihoods is hardly unique to magicians and crooks. In this chapter we look at other groups of people who try to keep you from noticing what is in your best interest to notice. Successful marketers and politicians, for two examples, are often skilled at misdirection. Their jobs can depend on it. An array of common business tasks, including negotiation and working as a team, also incorporate elements of misdirection. It is safe to say that, until a majority of us can spot the misdirection of others, people in these fields will continue to have incentives to misdirect.

PICKING THE RIGHT PRODUCT: MARKETING AND MISDIRECTION

Let’s go shopping. Assume you are looking to make a significant purchase, perhaps a luxury car or a new flat-screen television. Or maybe you just want to make sure you find the right product, such as the best browser for your computer. What do you need to do to be confident you are making an informed, prudent choice? Much has been written about how consumers and other decision makers can make wise choices among different options.1 Various experts have delineated five-, six-, and eight-step models, but all of them have a great deal in common. The essence of these models can be captured in a paragraph.

Start by defining your objectives, which may involve identifying multiple criteria that you are trying to meet. For example, you want a car that is fuel-efficient, can transport a family of four on a touring vacation, and will impress your neighbors. Or perhaps you don’t care about costs, your family’s comfort, or your neighbors. Whatever your preferences, you should weight each criteria accordingly. With your goal well specified, you are ready to look at actual cars and rate each by your criteria. While most of us do not explicitly go through this thorough process for every significant purchase we make, with any luck we implicitly apply this logic whenever making such a decision.

Now let’s change your perspective. Imagine that you want people to buy a product that your company is selling. Additionally, and unfortunately, let us say you know that for most of these potential customers your product is less than optimal. It’s good, but competitors’ products beat yours on several obvious criteria. If shoppers follow a logical decision-making process, they will buy the competition. What can you do? Misdirect!

Observe one advertising trick that has been popular in recent years: a company develops a chart that compares its product to those of its competitors across multiple dimensions. Rather than leave the decision modeling to the consumer, the manufacturer does it for them. Adam Pash, a blogger at www.lifehacker.com, highlights what he argues is Microsoft’s misdirection in a chart that compares Microsoft’s browser Internet Explorer to competitors Firefox and Google Chrome (see page 73).²

As you can see in the chart, Microsoft outperforms the competition, at least on the dimensions chosen by Microsoft. But according to Pash, the company does not use the criteria that are most important to most people who are shopping for browsers. In fact Pash argues that Microsoft’s chart is an “absurd piece of propaganda” designed to win back customers who have strayed from Internet Explorer. Specifically he argues that the six dimensions chosen by Microsoft are of dubious importance, that the comments Microsoft makes on each are self-serving, and that important criteria (like speed) are left off altogether.

Microsoft’s chart resembles many other charts that marketers use to direct our attention to the information that puts their product in the best possible light. The practice is common because it works. These charts are organized and seemingly logical; typically one product (the advertiser’s) is the clear winner in a seeming head-to-head comparison. But to arrive at these conclusions, marketers often have to misdirect you from a logical decision-making process, which would otherwise lead you to their competitor’s product. Like magicians and thieves, they intend to short-circuit that process and consequently control what factors are in your focus. These charts are very effective because few people stop to think, “But these aren’t the factors that I care about.”

				Comments
Security				Internet Explorer 8 takes the cake with better phishing and malware protection, as well as protection from emerging threats.
Privacy				InPrivate Browsing and InPrivate Filtering help Internet Explorer 8 claim privacy victory.
Ease of Use				Features like Accelerators, Web Slices and Visual Search Suggestions make Internet Explorer 8 easier to use.
Web Standards				It’s a tie. Internet Explorer Passes more of the World Wide Web Consortium’s CSS 2.1 test cases than any other browser, but Firefox 3 has more support for some evolving standards.
Developer Tools				Of course Internet Explorer 8 wins this one. There’s no need to install tools separetly, and it offers better features like JavaScript profiling.
Reliability				Only Internet Explorer 8 has both tab isolation and crash recovery features; Firefox and Chrome have one or the other.

Of course, comparison charts are just one of many tools in the toolkit of marketing misdirection. One of the more interesting aspects of the 2008 financial crisis was that Goldman Sachs was selling investors on mortgage-backed securities at the same time that it was investing heavily in the collapse of these same securities; that is, it was “shorting” them. In 2007 Goldman was making enormous bets against the housing market. Of course, there is nothing wrong in betting that an investment is overpriced. But when shorting there is always a temptation to distort the market to increase the value of your bet, which the Senate’s Permanent Subcommittee on Investigations charged Goldman Sachs with doing in its report on the financial collapse.3

How do you find the other side of the bet? Goldman Sachs’s solution was to create new securities, backed with its reputation, and make a series of misleading statements about its views as to the value of these securities to its customers. For example, in 2006 Goldman created the Hudson Mezzanine fund, a $2 billion collateralized debt obligation. The company’s marketing materials noted, “Goldman Sachs has aligned incentives with the Hudson program.” To ensure that this was technically true, Goldman made a small investment in this instrument. But the true purpose of this investment, the committee charged, was misdirection: Goldman Sachs wanted to hide the fact that it had made a far larger bet against the securities in the other direction. In essence Goldman created the other side of the bet that it needed by making a small investment that would misdirect its customers about its true beliefs. Lloyd C. Blankfein, the bank’s CEO, claimed that Goldman was merely creating a market for these securities and derivatives, matching willing and sophisticated buyers and sellers. A Senate subcommittee concluded that Goldman was actively creating the market itself, specifically for the purpose of betting against its customers.⁴

CAREER DIPLOMATS: WHEN POLITICIANS MISDIRECT

On August 25, 2012, Sir Peter Westmacott, the British ambassador to the United States, was the guest on National Public Radio’s show Wait, Wait, Don’t Tell Me. The show’s host, Peter Sagal, presented Westmacott with several sticky questions and asked him to demonstrate how a skilled diplomat would respond:

Sagal: Would you mind reading a draft of my first novel? . . .

Westmacott: I should be absolutely delighted. It’s a real privilege to be asked to look at your first draft of a novel. But you don’t expect me to write any comments on it, do you?

Sagal: Right. But let’s say you’ve read the first draft of the novel.

Westmacott: Yeah.

Sagal: Let’s say it’s awful.

Westmacott: Yeah.

Sagal: And then I say “What did you think? Tell me the truth.”

Westmacott: I particularly liked the chapter where they talked about the fun and games behind the shed on that island in the exotic Caribbean.

Sagal: But what about the part where, like, the guys hold up the gas station and then they all sort of end up there together until the aliens come? Did you like that part?

Westmacott: You know, that chapter appealed to me a little bit less than the one I just mentioned.

As Westmacott demonstrates, politicians can be masters of misdirection. Not only did the ambassador avoid providing offensive answers; he made it seem as if he were actually answering the questions posed.

Westmacott provided the kind of answers that are common in social situations, where the primary goal is to avoid offending the other party. In other cases, politicians have a different goal: to avoid saying something that could harm themselves. Consider this example from one of the 2012 Republican primary debates. CNN reporter John King asked each of the four remaining presidential candidates, “What is the biggest misconception about you in the public debate right now?” This is how Governor Mitt Romney answered, and how King parried:

Romney: We’ve got to restore America’s promise in this country where people know that with hard work and education, that they’re going to be secure and prosperous and that their kids will have a brighter future than they’ve had. For that to happen, we’re going to have to have dramatic fundamental change in Washington, D.C., we’re going to have to create more jobs, have less debt, and shrink the size of the government.

I’m the only person in this race . . .

King: Is there a misconception about you? The question is a misconception.

Romney: You know, you get to ask the questions [you] want, I get to give the answers I want. Fair enough? And I believe that there’s a whole question about, what do we need as the person that should be president.

Romney never came close to answering King’s question. First he tried to dodge it, and then he dodged the fact that he’d been caught dodging. Whether he knew it or not, Romney was following in the tradition of Robert McNamara, secretary of defense to John F. Kennedy and Lyndon B. Johnson, who famously said, “Don’t answer the question you were asked. Answer the question you wish you were asked.”

The inept dodge is, of course, easier to spot. Consider Loyola philosophy professor J. D. Trout’s recounting of Senator Tom Coburn of Oklahoma buying $25,000 in bonds in a genetic-technology company (Affymetrix), while simultaneously acting on federal legislation the firm desired.5 Senator Coburn materially profited from the transaction involving legislation that he could influence. John Hart, Coburn’s communications director, claimed, “There is no evidence Dr. Coburn had even heard of Affymetrix before his broker made a purchase, and there is no evidence his actions affected the value of the company. . . . If there was a connection, you could argue it hurt the company—the stock lost half its value.” Trout notes that this last point makes it appear that Coburn himself lost money. Yet Coburn sold the bonds in a timely manner to obtain a 35 percent profit. Hart’s dodge of the actual issue encouraged people to draw the wrong conclusion and protected Coburn from the actual evidence, all without his having to make an untrue statement.

Lots of people dodge questions, including politicians in debates, CEOs in press conferences, employees faced with tough questions from their bosses, and spouses who are hiding information, such as plans for a surprise birthday party.⁶ My colleagues Todd Rogers and Mike Norton wrote a wonderful article entitled “The Artful Dodger,” named for the Charles Dickens character in Oliver Twist who distracts his victims with friendly conversation while he picks their pockets.⁷ By putting people at ease, the Artful Dodger made them easy targets for theft. Artful dodgers fluently answer the question asked with a near, or proximate, answer; the senator’s actions were ethical because the stock lost value. By contrast, artless dodgers clumsily respond to questions with something glaringly incongruous: a presidential candidate repeatedly speaks about who should win the election rather than addressing the question of misconceptions about his character. When Barry Bonds provided the answer quoted in chapter 3, his dodge was so artless that it led to his conviction on obstruction of justice.

If Norton and Rogers’s research contains tips for the dodger wishing to polish her art, it also contains tips for how to disrupt the schemes of all dodgers. When King redirected the audience to Romney’s dodge, it became all the more glaring. Indeed a simple fix for dodges during political debates is for the broadcaster to leave up on the screen the question that has just been asked. This simple change dramatically increases the likelihood that viewers will notice the misdirection. Based on the work of Rogers and Norton, CNN now keeps the questions on the screen during political debates as standard policy, and other networks are considering this change.

NEGOTIATING THE WRONG DEAL

Let’s leave behind the magicians, thieves, and politicians for the real world. One of my recent corporate clients was involved in an important negotiation to allow another company access to its intellectual property. The CEOs themselves reached an oral understanding about the terms of an agreement. Intellectual property deals are typically complex, and lawyers need to carefully specify the agreed-upon details in the formal contract.

As the contract was being written up, the other side insisted that it needed continued rights to use my client’s intellectual property beyond the scope of the work that was being specified. My client wasn’t at all clear why the other company was insisting on this broader and ambiguous access to its intellectual property. But the customer kept dangling the $100-million-plus contract in front of my client and insisting on the extended access, implying that the company was concerned about future needs that were not yet clear enough to specify. On first glance, it seemed an extraneous demand, superfluous to the central goals of the deal that had been accepted.

As the process unfolded, a negotiator on the other party’s team accidentally copied my client’s CEO on an internal email. The email showed that the other company had already violated my client’s intellectual property rights, and in ways that were criminal. My client now understood the curious additional request for the broader scope of use. It was an effort at misdirection. By negotiating an agreement focused on hard-to-define future use of the intellectual property, the company was trying to cover up its past wrongdoing. It took an errant email to bring the misdirection to light. This should not have been necessary. When the other side in a negotiation makes a demand that doesn’t make sense to you, don’t assume they are acting irrationally. Instead stop and ask yourself what you might not know that could explain their actions—and whether they might be trying to misdirect you.

Consider a negotiation simulation entitled “Hamilton Real Estate” written by Deepak Malhotra, the coauthor of my book Negotiation Genius and my colleague at the Harvard Business School. It involves a seller of a large parcel of land and a prospective buyer. The land is currently zoned for residential development, and the seller generally expects this will be the case in the future. However, the buyer knows that the zoning laws are about to change in a way that makes commercial development possible and increases the value of the property.

My colleagues Todd Rogers and Mike Norton, whose research I described earlier, along with Francesca Gino, Maurice Schweitzer, and Richard Zeckhauser, examined what would happen if the buyer in this simulation was trained to dodge questions.8 All of the sellers were instructed to ask their prospective buyer, “Are you going to use the property for commercial development?” Buyers in the “dodging” condition were specifically instructed on how to dodge the sellers’ questions (for example, by answering, “As you know, we have only ever done residential development”). In contrast, participants in the “straight” condition were coached to “give an accurate answer to this question by answering it directly and without lying.” Buyers trained in dodging were able to buy the land at significantly lower prices than those who were coached to be honest and direct. Dodging buyers made nearly a third more profit. Moreover the dodgers were able to do so without lying outright. You can be the judge of whether they engaged in deception or not.

One of my favorite negotiation teaching simulations involving misdirection concerns a television syndicator that is leasing the rights to a show to a television station. The negotiation instructs the parties to come to agreement on price, financing, and the frequency with which the television show can be shown. Students are given time to prepare for the negotiation, and many do so by creating an agenda, for example, negotiating price first, then payment terms, usage, and implementation issues.

Being organized is a good thing. We’ve all been to meetings where the lack of structure drove us crazy. Yet in negotiation in particular, agendas have the potential to misdirect. Specifically, issue-by-issue agendas can create a barrier to finding wise trades across issues.

In the past thirty years negotiation has been a hot topic, and it is now one of the most popular courses in management schools. One of the many simple and important insights that students learn is that in complex negotiations, the pie isn’t fixed. If they place different values on the different issues at stake, both parties can make gains by “logrolling”—that is, trading one issue for another. Students learn to avoid negotiating one issue at a time, as discussing multiple issues simultaneously allows them to explore who cares more about the many issues under discussion. In business negotiations, these issues might include the following:

• Guarantees of performance

• Time to implementation

• Payment terms

• Quality

• Contract length

• Exclusivity clauses

• Level of service support

• And many, many others

Critically, issue-by-issue agendas can create misdirection for both negotiators by distracting them from a discussion format that would lead to the discovery of such trades. Agendas can also prevent us from discovering additional issues that are not yet on the table. Going back to the television simulation, an agenda that tackles the four issues one by one can cause parties to focus so narrowly on the negotiation at hand that they do not notice that a second TV show is available that is worth more to the buyer than it would cost the seller to provide. The ability to expand the scope of negotiations can create additional value for both parties.

The best advice to avoid misdirection in negotiations is to put yourself in the other person’s shoes. This practice is rarely done, and it’s all the more important when we are interacting with people who may not have our best interests in mind.

There are ways of going beyond the thought exercise of wearing your competitor’s shoes. You can also avoid misdirection through clarity. Have you ever been frustrated when the other side didn’t implement an agreement as you understood it? Negotiators who want to deceive like ambiguity; clarity can be your defense.

To see this, consider my negotiation classroom, where after simulations are completed, participants write their agreement on the blackboard. More often than you might expect, after one party writes up the result, the other party argues that that is not what they agreed to. They reached the agreement just fifteen minutes earlier, so why does this occur, and so often? My experience is that the parties agreed to an oral contract without noting that their agreement was ambiguous. In the real world, negotiators often shake hands to signal that they’ve reached a deal, and they have their lawyers write up the agreement soon afterward. Often, however, the two parties report different agreements to their two attorneys. The remaining barriers to agreement begin to appear as the attorneys try to write up the deal, and the negotiators are surprised that their understanding of the deal wasn’t mutual. The solution is clear; in negotiation, when you think you have a deal, confirm the details rather than making inferences about ambiguously stated terms. Sometimes the ambiguity is intended to deceive.

THE MISDIRECTED TEAM

In chapter 1 I discussed the disastrous group meeting the evening before the launch of the space shuttle Challenger. As you’ll recall, when deciding whether or not to launch the shuttle the next day, even very smart people used only the information that was readily available to them. The focus on analyzing the data in front of them created a misdirection from asking the important question: What information do we actually need to make a wise decision? This type of misdirection is remarkably common in groups, despite being in stark contrast with a primary reason groups are created in the first place.

Organizations often set up cross-functional teams with the goal of representing and capitalizing on different perspectives. These teams often have access to the information they need to make the best decisions possible. Unfortunately team members often fail to share with other members the very data they were brought in to share: the unique information that they alone possess and potentially their most important contribution to the team. Why? Because group members tend to focus more on shared information (information known to all members) than on unique or unshared information (information known by only one member).9 In one early study on this topic, Garold Stasser and William Titus asked college students to choose among three (hypothetical) candidates running for student council president. When decision makers had access to all of the information about all of the candidates, 67 percent of individuals and 83 percent of groups preferred Candidate A over B and C.¹⁰

In a second version of the simulation, some of the information about the candidates was shared by all group members and some of it was unshared; specifically it was known only to one group member. This setup mirrors the nature of information contained within most real-world groups. In this case, only one group member had positive information about Candidate A. Thus before interacting with each other, most group members had little reason to support Candidate A; not surprisingly, only 23 percent of individual group members in the unshared condition chose Candidate A. More interestingly the three group members then met to make a group decision, with the full group having access to the same information as the shared groups, but the information was diffused among various members. This time only 18 percent of the groups with unshared information chose Candidate A. Across numerous studies, Stasser and Titus have shown that groups discuss shared information more often than unshared information. This is quite a paradox, since groups are often brought together for the very purpose of pooling information, yet groups consistently exhibit bounded awareness regarding their unique or unshared information.

In the research that I’ve described on groups and information sharing, all of the group members share the goal of making the best decision possible. By contrast, in many real-world groups, not all group members share the same goal. Sometimes battles erupt among those who have different interests, often for political reasons. Some group members may not want other members to notice certain information. In such cases, watch out for deliberate misdirection. A well-crafted agenda might exclude critical information. A creative PowerPoint presentation might prevent you from asking, “What information does this group need to make the best decision possible?” Yet across both political and apolitical groups, your goal should be to consider exactly this question. And when leading groups, your task is to make sure that the team stays focused on its mission and that members contribute what is actually needed by the group.

SEEING THROUGH MISDIRECTION

As I outlined earlier, we know how to make a logical decision: define your objectives, identify the multiple criteria that you are trying to achieve, weight the criteria, identify options, and analyze the best choice. Of course, there are lots of variations of this kind of logical process. Those who want to misdirect us do not want us to be so logical. They want to hijack our thinking and manipulate us to do what they want. When you start to stray from logic, and another person is involved, whether she is a negotiator, marketer, or politician, it is time to put yourself in the shoes of the other party, understand her motives, and adapt accordingly. Whenever we are interacting with people who we believe do not have our best interests in mind, we need to look beyond the information they put in front of us and think about what they are trying to get us to do and how we can get the information we actually need. When our goal becomes simply to notice, we can avoid the misdirection of magicians and others who borrow from their craft.