One October day in 1987, the new CEO of the Aluminum Co. of America (Alcoa) took the stage in a Manhattan hotel ballroom and met the company’s investors for the first time. Over the course of its century-long history, Alcoa had become one of the world’s largest companies, but a series of recent stumbles had led the board to decide a management change was needed. Their choice to lead the company, however, was a 51-year-old unknown former bureaucrat named Paul O’Neill, and the audience he faced that day was curious and more than a bit skeptical.
As O’Neill’s presentation progressed, that skepticism became near panic, as Charles Duhigg recounts in The Power of Habit: Why We Do What We Do in Life and Business (Doubleday Canada). Rather than the usual bromides and chest-beating about profits, O’Neill made clear to investors that his principal focus would be Alcoa’s middling worker safety record, going so far as to pause near the beginning of his speech to point out the ballroom’s fire exits. The crowd was stunned, wondering aloud why the board “had put a crazy hippie in charge.” One investor identified by Duhigg recalls rushing to a pay phone and calling his 20 biggest clients, telling them to sell their Alcoa stock immediately “before everyone else in the room started calling their clients and telling them the same thing.” But O’Neill believed he could change the entire company—making it more streamlined and efficient, readying it for global competition and, yes, ultimately making it more profitable—by focusing on changing the most essential habits of its workers.
Duhigg, an investigative journalist with The New York Times, has been poking into the science of our behavioural routines for eight years now, and The Power of Habit is the very entertaining result of all that research. “In the past decade,” Duhigg writes, “our understanding of the neurology and psychology of habits… has expanded in ways we couldn’t imagine fifty years ago.” That means we’re bet ter equipped to tinker with our own individual habits, good and bad, Outsmart your bad habits You can never truly extinguish a bad habit, but you can learn from it and those of organizations and society.
On an individual level, habits form because our brains look for ways to save effort. “Left to its own devices,” writes Duhigg, “the brain will try to make almost any routine into a habit, because habits allow our minds to ramp down more often.” The process of making automatic in the brain certain sequences of actions is called “chunking,” and it lets us tie our shoes, for example, more or less without actively thinking. There’s a three-step loop that leads our brains to develop habits: they receive cues, flagging the opportunity to go into automatic mode; they then invoke a physical, mental or emotional routine; and finally, they receive a reward. We can take cues from almost anything—a certain colour or smell, a certain combination of people—and the routines our brains develop can be incredibly complex. Rewards can be as tangible as a sugary snack or as abstract as the feeling of pride after a job well done. And once formed, habits are both delicate and incredibly powerful, causing “our brains to cling to them at the exclusion of all else, including common sense.” No matter how pointedly, for example, your doctor tells you that you need to quit smoking, eat better and exercise, your learned habits can overwhelm your best intentions.
At least, they can if approached the wrong way. The growing body of research into habit formation has produced what Duhigg calls a “Golden Rule” for change: “You can never truly extinguish bad habits,” and to change an existing habit, “you must keep the old cue, and deliver the old reward, but insert a new routine.” That’s become common knowledge in a number of individual ways—think of smokers chewing gum to help deal with their cravings—but research has proven it to be a generally applicable template. If you identify the cues and rewards, most of the time you can alter your routines—if, crucially, you believe in the potential for change. That belief may be fuelled by the support of a group like Alcoholics Anonymous, or by a partner in the workplace who will walk to the cafeteria with you to buy an apple instead of a bag of chips, and often it’s the essential missing ingredient in failed attempts at habit change.
Every group has its habits, too, and those habits are at the heart of what is meant by an organization’s “culture.” Duhigg spends a good chunk of his book unpacking the concept of “keystone habits”— those that have the power to start a chain reaction and change other habits over time. In the case of Alcoa’s O’Neill, he chose a subject that both unions and executives agreed was important— worker safety—and used it to kick-start a series of other changes that remade the company. Effectively echoing the three-step habit loop, he let every employee injury in the company serve as a cue: when an injury occurred, the unit president would report it directly to O’Neill within 24 hours, along with a plan to make sure it never happened again; and as reward, O’Neill ensured that only those executives who were reporting and ultimately reducing the incidence of injury would get promoted.
The new routine for workplace safety fundamentally altered Alcoa’s company culture. It meant that factory floor managers had to communicate better with vice-presidents, and vice-presidents with unit presidents. It meant that managers needed their workers to come up with suggestions about how to deal with safety problems, rather than imposing them from above. “Almost everything about the company’s rigid hierarchy had to change to accommodate O’Neill’s safety program,” Duhigg writes. “He was building new corporate habits.”
By the time O’Neill retired in 2000, Alcoa’s market cap had grown by $27 billion and its annual income had quintupled. “You can’t order people to change,” he tells Duhigg. But by identifying cues and rewards, and developing healthy routines, you can instil change—one bad habit at a time.