(credit: didgeman BY CC)

Signals from the unexpected

The messages that are sent when expectations and reality are at odds can be revealing and powerful

A few weeks ago, three things happened to me on three consecutive days. All three involved choices other people made, and all three made me change my view.

On the first day, I went to the bank for a relatively complicated transaction. It required the intervention of a member of staff but, for reasons that are the bank’s own, it was not possible to make an appointment. I expected, like on previous occasions, a waiting time of 10–15 minutes, but this time it was fully an hour before someone came to collect me. He was quite apologetic (nothing unusual there) and said something like “I will do something for you”. I was expecting I might get a free coffee or maybe a couple of months’ free banking, but when he said “I will transfer £100 into your account”, I was rather dumbstruck.

On the second day, I had travelled some distance and arrived late in the evening at a hotel where I had reserved a room via a booking website. I knew it was full, as a colleague had had to stay elsewhere, but I expected a smooth check-in and looked forward to putting my feet up. So when, well after 9pm, the assistant said she could not find a reservation in my name, my mood began to deteriorate. She kept on tapping away on her keyboard, clearly without much success. I opened the reservation website’s app on my phone to track down my booking number, but even that secret code appeared not to be enough to let me in. Eventually a colleague with the right incantation managed to unlock my reservation. The assistant apologized once again but before she let me go with my plastic smartcard key, she wanted to compensate me for the inconvenience. I’m not sure exactly what I was expecting, but it was definitely not a bottle of mineral water (500ml).

On the third day, we were waiting in the reception area of the company we were visiting. These days most places are equipped with electronic gates that magically open when a badge is waved over a sensor, and it was not different here. I had expected to be given the customary visitor’s badge, but instead our host simply used his own pass and then proceeded to keep the gate open until all four of us had gone through it. Once again, not quite what I had anticipated.

Reality check(ed against expectations)

Had reality, in any of these anecdotes, been close to what I had been expecting, I would have forgotten about them already. I would certainly not have drawn any conclusions about anything, and less still have changed my mind.

But in each of these situations, there was at least one instance of a mismatch between reality and expectations. And that is when perceptions are formed or changed.

We all know that there is a risk of having to wait when you go to the bank, so we anticipate a little delay. But when we are told by the receptionist that “it shouldn’t be long”, and an hour later we’re still sitting on the kind of uncomfortable bench that seems exclusive to reception areas, our perception of the bank inevitably changes for the worse. Eventually it is our turn, and we expect some kind of half-hearted apology. But when Instead we are given a non-trivial amount to indemnify us, we experience cognitive dissonance. Is this an awful bank, or a splendid one? The signal sent by the remarkably generous compensation suggests our pitiful experience is not a common one (the unusualness of the amount evokes the unusualness of the event it is intended to compensate). It also tells us the bank is not pussyfooting when it messes up: no debate, and an amount so high that we can only conclude that they will make sure this does not happen again. The delay may have been the result of bad luck (staff sickness) or of the bank’s own doing (cost cutting, or poor management processes), but the compensation itself was very much a deliberate act. Such acts are the strongest possible indicator of ‘what kind of organization we are’. It makes us forget an hour’s wasted time, and allows the bank to rise in our estimation once again.

The second experience was, in many ways, very similar. A long delay at the reception desk, an apology, and compensation. Only, in comparison with what I got at the bank, half a litre of water was distinctly underwhelming as a token of remorse. For sure, the hotel receptionist could have stopped at saying sorry — she really did seem sincere in doing so — and I would have got to my room with a different perception, even though a fully rational person would of course have been happier with an apology and some water, than with just an apology.

But as numerous experiments with the ultimatum game have shown, that is not how we humans work. In this game, one player (the ‘decider) must divide a sum of money between herself and the other player (the ‘receiver’), deciding as she sees fit how much she keeps and what she gives away. The twist is that the receiver can refuse the gift, in which case nobody gets anything. While a rational person would accept even the smallest amount of money, in practice people find offers that are too low unfair. Studies have found that the majority of receivers reject offers at or below 20% of the original sum — thereby not just punishing the decider, but also themselves.

Giving somebody something good is not an unconditionally positive act. Leaving a tip of just a few pennies, if 10 or 15% is the norm, is a clear signal that the service was below par (unlike leaving nothing, which could just be forgetfulness). Was the bottle of water intended as an affront? Not very likely. But I could not help make the comparison: was this all my inconvenience was worth to the hotel? One interesting observation we can make here is how the sequence of events matters. Had I gone to the bank after my stay in the hotel, even a bottle of water might have been a pleasant surprise. But now the bank had set the norm, and so the hotel’s compensation was decidedly disappointing.

Signs of trust

In both these cases there was another message as well, telling us something about the relationship between the organization and the employee that served me. Both were empowered to offer me something, without going through complex authorization procedures, that would cost the company money. This signifies not only a willingness to solve customer issues smoothly, but also a certain degree of trust in the employee (obviously higher at the bank than at the hotel). Timpson, a large chain of shoe repair and key cutting shops in the UK is a leading light in this respect. They allow employees to spend up to £500 to settle a complaint without requiring permission from higher up.

As I got over my initial surprise at the entrance gates on the third day, it occurred to me that here too I could be seeing a signal of trust. At first I thought I observed an example of sloppy habits and leaky security — not a good sign for the kind of company we were visiting. But perhaps the gates were there just to keep out unannounced and unaccompanied visitors without a badge granting them entry. For visitors that were known to their own staff, the company could indeed just be placing their trust in their people to behave sensibly — and do away with what is, in many cases, a cumbersome procedure that adds little if any additional security. (When was the last time a receptionist or security employee verified your identity?) So even here, the unexpectedly pragmatic process for visitors entering the building changed my mind about the organization in question.

When expectations and reality bump into one another, we pay a great deal of attention to the choices other people make, and to the trade-offs we assume lie behind them. And often, we evaluate what we see on a simple good-bad scale, moving the marker of our esteem up or down accordingly.

That may not always be just or fair, but the more we can see that their actions are deliberate, the more we will see them as a true reflection of a person or organization’s true nature.

Such are the powers of the signals from the unexpected.

Originally published at koenfucius.wordpress.com on May 25, 2018.

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Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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