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Transcription of interview with Charles Duhigg on April 15, 2013.
Douglas Goldstein, CFP�, Financial Planner & Investment Advisor
Charles Duhigg is a staff writer at the New York Times and the author of a fabulous and
recently published book called The Power of Habit.
Douglas Goldstein, financial planner & investment advisor, interviewed Duhigg on Arutz Sheva
Radio.
Douglas Goldstein: Why did you write the book?
Charles Duhigg: I became really interested in sort of designs of habit formation about
a decade ago when I was a reporter in Iraq. I met an army major who had stopped riots
from happening in Kufa which is about an hour away from Baghdad by influencing food vendors
for collecting [applauses 00:01:08] because he had found that by removing all the food
vendors, you stop crowds from developing a sufficient size that could lead to riots occurring.
When I asked him about his, he told me that basically that he had learned through the
military that there�s really deep understanding of habits, whether be individual habits or
social habits or habits among crowds. So when I got back to the US, I started researching
it and thought it was just really interesting.
Douglas Goldstein: Can people apply these skills themselves or is it really best done
by your sergeant?
Charles Duhigg: It�s a stuff that is most impactful I think when people are thinking
about their lives. We�re sort of living through this Golden Age of understanding the
neurology of habit formation. At the root of this is the basic insight that has three
components. There is a cue which is like a trigger for the behavior to began, the automatic
behavior itself and then finally a reward and our brains latched on to this cues and
rewards to form automatic behaviors habits, but once you understand how to recognize those
triggers and those rewards and how to play with them, you gained a real tool for changing
your own habits.
Douglas Goldstein: It�s not just what Pavlov discovered with his dogs?
Charles Duhigg: The difference with sort of Pavlov is that the dogs would just kind of
respond automatically. I�ve read his famous experiment that he drained their bowel when
he was feeding them and eventually just ringing the bell would cause them to salivate. In
the dogs� case, they didn�t have any real control over that behavior. It was just a
learned relationship. The interesting thing about humans and about how the human brain
works is that we have the ability to not only take control of these patterns by sort of
understanding the cues and rewards that drive them but even more importantly, simply deciding
that something should be a reward makes it more rewarding to us.
If you think about it the first couple of times, you got good grades in school, it�s
not that as if there�s any inborn instinct to feel good when you get an A and feel bad
when you get a D, but people decided to take pride or define themselves out of how well
they do academically and that has a neurological impact on changing our reaction when we experience
that activity to giving us a reward from it.
Douglas Goldstein: Is it really ultimately about a reward?
Charles Duhigg: The reward is incredibly important because the reward drives how the part of
our brain known as the basal ganglia programs automatic behaviors into our daily routines.
Basically, whenever we got a reward and this is sort of an evolutionary instinct, our brains
says let�s do more of that thing that deliver a reward. If we can pair certain behaviors
with rewards in a consistent way and find cues that help us recognize those then those
behaviors become more and more automatic until they feel somewhat effortless and at that
point, they become habit.
Douglas Goldstein: What about the case where people do things habitually, the opposite,
it�s not a reward but it somehow hurts them?
Charles Duhigg: It�s not a habit them. It�s interesting because even things that we think
of as being hurtful often times contain rewards so take for instance on nail biting which
is one of the most studied habits. The reason why many people bite their nails is because
they are either bored or they feel some sort of anxiety and that�s the cue that triggers
this behavior. When they bite their nails, it causes a small brief burst of pain. When
you�re biting your nail down to the quick, it sort of hurts a little bit. We would think
of that as a punishment not as a reward but actually for people who are nail biters, the
brief burst of pain tends to overwhelm just for a microsecond that sense of boredom or
that sense of anxiety and that�s enough of a relief of tension to be a reward for
your basal ganglia and to make that behavior a habit. That�s why even though it�s kind
of painful to bite your nails, people develop a habit for doing it. It�s because it delivers
some type of reward even if they�re not fully conscious of what it is.
Douglas Goldstein: There are some people that have habits and there are some people that
we would say just maybe strange or they have weird personality traits but a lot of times,
you might think that they developed those traits as some sort of habit. Can you differentiate
between the two?
Charles Duhigg: I think it depends on the person. There�s obviously some people who
have conditions that we know are rooted in biochemistry. Autism and Asperger�s for
instance have biocognitive on causes. In their cases, often times, their brains have trouble
processing rewards in ways that they can allow them to learn as easily as other people. Sometimes
people just have kind of interesting personalities because they are prone to enjoying that certain
type of reward in a certain way and we think that there are biochemical reasons for that.
Douglas Goldstein: A lot of what you�ve written about is about habit forming in the
corporate world so obviously there are real business implications to your research.
Charles Duhigg: Companies want to understand customer habits. In fact, one of the stories
that we tell in the book is about how target analyzes shoppers� habits to try and determine
which customers are pregnant even if they haven�t told the store. The companies also
want to understand their employees� habits. They want to really understand how to help
their employees or make their employees more efficient or more productive and so the studied
the habitual behaviors within the corporate setting. One of the stories in the book is
about Starbucks and Starbucks basically realized that in order to encourage the employees to
be better at customer service, they needed to strengthen their willpower habits so they
were able to make it through an 8-hour shift without kind of melting down. Through varied
sort of regime training systems, you can help employees or your kids or your family members
developed new willpower habits and makes it easier for them to use their willpower.
Douglas Goldstein: Do you have suggestions for people to develop their willpower?
Charles Duhigg: There�s been a lot of really interesting studies looking at saving habits
and what they found is that very often, for a reward to be effective, it has to come very
quickly after the behavior. The hard thing about saving is that sometimes you�ll save
for years or decades and you really won�t have any reward from it. You�re saving up,
your kids were born and you�re saving up for their college fund but that�s 18 years
away. Every week if you take a portion of your paycheck and put it in account, you don�t
get any reward from that.
What experiments have done is they�ve tried to deliver some kind of immediate reward for
people who increased their savings. There�s one very famous experiment that was done in
Peru and what they found is that even something as small as just having someone tell them
�Congratulations on saving so much cash this week. Your account went up by $15 and
you should feel really good about that� just that is enough to help people develop
saving habits. If someone is trying to increase their financial literacy or their financial
willpower, what they should do is that when they actually do this good behavior, they
need to give themselves some type of reward, maybe that means you keep track of it on a
chart and you pat yourself on the back every Friday when the account goes up a little bit,
maybe you allow yourself to have a nice relaxing dinner with your spouse after you�ve deposited
$250 into your account for the kids� college plan, but what really matters is that you
deliver some kind of reward because otherwise, it�s very hard for your brain to turn that
behavior into an automatic pattern.
Douglas Goldstein: Is it okay to reward yourself or is it better to try and work with a buddy?
Charles Duhigg: Either one. The nice thing about a buddy is that very often, it has the
social reinforcement value. If you�re saving with someone else and you save that week,
they tell you �Good job. I noticed the account went up� if you�re doing it with your
spouse, but it doesn�t really matter as much as long as there is some kind of reward
there although we do know that social reinforcement is a very powerful type of reward.
Douglas Goldstein: What about the habit of being able to deal with the volatility in
the market? Some of my clients are very cool when the market goes down and they hold on
and some of them, it�s a real big panic for them. Is that something as a habit or
it�s that just each person�s individual tolerance for risk?
Charles Duhigg: Mental habits and emotional habits are some of the most powerful and common
ones out there. That being said, there�s probably some kind of reward that�s being
provided by that panic. Either they feel a sudden sense of control or responsibility
because they�re paying attention to it and they�re panicking over it and that means
that they must like be on top of it. I think the key is you just have to choose deliberately
what kind of your own behaviors are you assigning a reward value to. Once someone explains to
them if you get panicked every time the market goes up and down, that�s going to be correlated
with negative returns which we know that it is that people who are sort of slow and steady
do better and help them learn to reward themselves for feeling good for not paying attention
to the market every single day. Eventually and this is according to studies, that begin
filtering into how they assign rewards to their own behaviors and influences how they
behave.
Douglas Goldstein: Are some people more prone to being able to create good habits or follow
them than others?
Charles Duhigg: What we do know is that there seems to be some either genetic or neurological
chemical reasons why some people are more adept initially at developing new habits but
what all the research shows is that the more that people practice it, the better they get
regardless of where they are in the spectrum. I mean there�s this huge impact to being
able to tell people this is how you influence a habit and this what the book does, this
is how you identify cues, this is how you identify rewards. We know from all the studies
that simply giving people that tool set increases their ability to influence their own habits
and more importantly, once you start doing this and once it becomes a learned behavior,
it tends to cascade and have more and more impacts on your life. Some people might be
better out of it first but everyone gets better out of it as they practice.
Douglas Goldstein: How can people follow your work?
Charles Duhigg: I�m a reporter of the New York Times so if they�re Times� readers,
I�m in there. If they want to reach out to me, my website is www.charlesduhigg.com
or www.thepowerofhabit.com and I�d love to hear from anyone.
Douglas Goldstein, CFP�, is the director of Profile Investment Services and the host
of the Goldstein on Gelt radio show (Monday nights at 7:00 PM on www.israelnationalradio.com.
He is a licensed financial professional both in the U.S. and Israel. Securities offered
through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried
by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company.
His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered
at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.
Disclaimer: This document is a transcription and/or an educational article. While it is
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information and should not be used as the sole basis for making financial decisions.
The opinions rendered herein are those of the guests, and not necessarily those of Douglas
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