Craggy Peak Research
Driving empathovation.

The need for empathovation

Todd Haskell | June 12, 2020

Last weekend I attended a Black Lives Matter rally. We only decided to go an hour before it started - I didn't even have time to make a sign. By the time we got there, there was already a big crowd, and we ended up somewhere in the back. I couldn't see the speakers, so I spent a lot of time looking around at the other protesters. My county is 85% white, and the people at the rally were overwhelmingly white as well. It was tempting to think, "My, how enlightened and 'woke' we all are." The speakers must have had the same thought, because several of them thanked all the white people for showing up that day, and then challenged us to think about how we were going to show up tomorrow, and the next day, and the day after that.

As a business owner, the call to patronize Black-owned businesses resonates with me. And on the way home we did get some take-out food from a Black-owned restaurant. However, it didn't feel like a particularly meaningful action. We like Ethiopian food and we had just dicovered that our favorite place was open again. Perhaps the choice to go to that restaurant at that particular moment was influenced by the rally. But it certainly didn't mark a real change in our behavior.

Later that evening I sat in bed reading a book to unwind. What I was reading was Superfreakonomics by Steven Levitt and Stephen Dubner. In the chapter I was reading, Levitt and Dubner were talking about global warming, and observed that it is enormously difficult to get people to change their behavior. They went on to argue that we will probably have more success in tackling the problem if we focus on innovation rather than behavior change. What they meant by that is technological innovation. The idea they discussed most was pumping sulfur dioxide gas into the stratosphere to simulate the effects of a large volcanic eruption. Ironically, they suspected this idea would never fly because it was too politically controversial. So after saying that innovation offered a way to do an end-run around the difficulties of behavior change, Levitt and Dubner were forced to acknowledge that the innovation couldn't be put into practice because that would require behavior change.

As a psychologist by training, I understand that behavior change can indeed be very hard. But it can also be fantastically easy. The first iPhone was introduced in 2007, just 13 years ago. The behavior change driven by that event and everything that followed from it has been enormous, widespread, and extraordinarily rapid. Don't get me wrong, I realize that not all the consequences of smartphones have been good. But what I'm interested in here is what we can learn from that innovation that can help us understand how to promote behavior change in other areas.

So here's the key question: What's different about smartphones compared to machines that counteract global warming? In the case of smartphones, what drove the behavior change was not so much advances in technology as insights into the behavior of people. Coming from the perspective of behavioral economics, Levitt and Dubner note that human behavior is typically shaped by incentives. What the smartphone did was reshape the existing incentive structure, and that led to dramatic changes in behavior.

New is not always good

This got me thinking about how we typically view innovation in the business world. In a marketing context it usually comes up when people talk about competition. There are basically three approaches to winning customers in a crowded marketplace - do things cheaper, better, or differently. Innovation can help with all three. But what kinds of innovation, and what are the consequences beyond increasing profits?

It is definitely true that competition can spur innovations to bring down the cost of providing a product or service. For example, systems like Lean Six Sigma can help you find ways to work more efficiently and increase productivity. Sometimes these steps are a true win-win - not only do they reduce waste, but they can do away with cumbersome bureaucratic processes that frustrate employees, and empower them to do their job better. However, it is important to acknowledge that it is equally common for businesses to take actions that lower their costs but have negative impacts on the communities in which they operate. How many companies have moved some of their operations to countries where labor costs are lower, or environmental regulations are less strict? Or shifted their labor force away from full-time employees to part-timers or contract workers who get fewer benefits and have fewer regulatory protections? These steps seem less like true innovations, and more attempts to externalize costs so that someone other than the business has to pay them.

Technological innovations can also be a double-edged sword. The obvious example here is automation. When I was growing up, all the conversation was about automation in manufacturing. Obviously that kind of automation actually goes back hundreds of years to the industrial revolution - it's hardly something new. And it can certainly be very beneficial to companies, allowing them to produce products of consistently high quality more quickly and at lower cost. It offers many benefits to customers as well, by making quality manufactured goods affordable to large portions of the population. Yet it's undeniable that these business decisions have had significant impacts on society at large, not all of them good.

In recent years, the conversation around automation has shifted to big data and AI. As a self-professed stats nerd and computer geek, I admit I'm one of the people who gets starry-eyed when talking about the potential of these technologies. But for the same reason, I'm keenly aware of their limitations. For example, we're now seeing that AI algorithms can be biased, and end up perpetuating some of the inequalities we struggle with in our society. Of course, it's not the computers themselves that are biased - it's the people who who set up the systems, or the data they are are trained on. That actually makes things much worse. The AI systems are missing the key qualities of humans tha help us recognize flawed systems and motivate us to take action to change them. Computers do not have a moral compass - they do not perceive any difference between taking actions that help save the world and actions that help destroy it. And they don't experience any guilt or remorse over the consequences of their actions.

When a human realizes that they are carrying implicit biases that lead to them treating people very differently based simply on the color of their skin, they are at least capable of recognizing that this is wrong. And although it feels bad to face that reality, that bad feeling serves an important function. For example, it helps motivate white people like me to start showing up at Black Lives Matter rallies, and to really listen to what the people of color living, working, and studying in my community have to say.

Rethinking innovation

To achieve the behavior change that the world so desperately needs, what we need is a new way of thinking about innovation, one that is focused less on fancy gadgets and increasing profits and more on reducing suffering. In my family we love playing around with words, and so as I was thinking about this new kind of innovation, the word "empathovation" popped into my head. I'm not always the most original thinker, so I Googled it to see if someone else was already using the term. I got nothing - which made me feel pretty innovative myself! So what does this funny-looking word mean? Empathovation is the act of figuring out new and creative ways to help all members of our community thrive while also making a profit. And why is this so powerful? Because it shifts the incentive structure for all businesses. Any company that succeeds at empathovation has a competitive advantage, because now more than ever consumers can and do factor corporate social responsibility into their purchase decisions.

So here is my challenge to businesses everywhere. You already know that you need to center your business around the customer. And you know that the customer cares about how what you do impacts the world. So don't just react to what the customer wants - that's not how we ended up with the iPhone. Use empathovation to get out in front - show the customer a way you can do good that they never even thought of.

Lots of businesses are already making big strides in that direction. If you're looking for examples, checking out the B Corporations in your area is a good place to start. One of my local favorites is the Coffee Cherry Company, based out of Bellevue, WA. As businesspeople, we absolutely should make an effort to spend more of our dollars at Black-owned businesses. But we are also in a position to use our ingenuity and work ethic to make more profound changes that can help redefine business success.

My older son graduates from high school this evening. There is much talk of the future plans of all the graduates. I have a dream for what those conversations will look like 5 or 10 years down the road. I imagine I hear, "Sarah is a motivated young woman who is ready to roll up her sleeves and solve problems. She is committed to helping people and making a difference in the world." And I imagine responding, "Sounds like Sarah wants to go into business."