Speaking of Psychology - Thinking of companies as people (SOP13)

Episode Date: August 18, 2014

Are companies like people? According to Susan Fiske, PhD, companies may not be flesh and blood, but customers view even the largest publicly traded companies very much like the way they view other people. And the reasons for this way of thinking are not all that different from how humans evolved to trust one another. APA is currently seeking proposals for APA 2020, click here to learn more https://convention.apa.org/proposals Learn more about your ad choices. Visit megaphone.fm/adchoices

Are companies like people? Companies may not be flesh and blood, but customers view even the largest publicly traded companies very much like the way they view other people. That's according to this episode's guest, social psychologist Susan Fisk. For example, does Netflix have my best interest at heart when it raises its fees or limits streaming? Is the service Amazon Prime competent enough to meet my needs? These are the kinds of questions that run through our minds when we're deciding whether or not to do business with companies. In this episode, we talk with Dr. Fisk about how these thought patterns relate to the way that humans evolved to trust one another. I'm Audrey Hamilton, and this is speaking of psychology.

Susan Fiske is a professor of psychology and public affairs at Princeton University. She has authored hundreds of publications on social behaviors and cognition, and has received numerous scientific awards, including election to the National Academy of Science. She is a co-author of the book, The Human Brand, which combines psychological science, with marketing research to explain how we interact, not just with other people, but also with companies. Thank you for joining us, Dr. Fisk. Thank you. On a fundamental level, your work focuses on how humans interact with one another and how we're

influenced by other people, but your latest book, The Human Brand, looks at how we relate to companies. Can you explain what you and your co-author, Chris Malone, found? What we found is that people surprisingly relate to companies as if they were people. So our psychological research in the past has an ongoing, has found that people make two fundamental time-honored judgments about other people quite quickly and automatically. The first one is friend or foe. Is this person on my side or not? Do they share my interests or not? And can they be trusted? And are they friendly? So that's an instantaneous decision that people make on the basis of a person's face and posture and so on. And the second one is, given that we've infered their intentions, we infer whether they can act on them confidently because their intentions don't matter so much if they're incompetent.

So basically, this warmth by competence set of judgments maps out different kinds of human beings in our experiences. And it turns out that people relate to companies in the same way. One of the first things they want to know is whether the company has their interests at heart and the interest of society or are they just self-serving. You know, all companies want to make money, but some of them are more exclusively self-serving than others and don't have the interests of the larger society at stake. And then secondly, how good are they at doing what they set out to do?

Are they competent or not? So this, you might say, socially evolved strategy that we have for making sense of other people, are they warm and trustworthy or not, and are they competent or not, we use it to relate to companies. And as my co-author, Chris Malone likes to say, you know, back in the old days, people did business with individuals and faces were the first logos. and so people were relating to people they were doing business with in the same warmth by competence framework. But it's spilled over to looking at businesses when you're no longer relating to an individual, but you're relating to a whole company.

And you mentioned, you know, first impressions, you know, whether it's with someone you encounter on the street or when you walk into a store. Are we making these judgments subconsciously? Are we aware of that we're doing this? I think we're sort of semi-aware. There are automatic components to it. So my colleague Alex Totoroff, for example, shows that in less than a fraction of a second, we decide whether somebody's face is trustworthy or not,

and then a fraction of a second later, we decide whether the person is competent or not. And we do that on the basis of physical features of their faces. So I think with organizations, they don't have actual literal faces, and so it takes a little bit longer. But, you know, when people say, my cable company hates me or my computer loves me, they're relating to them as if they're trustworthy or not, if they think that Amtrak and the post office are incompetent. You know, those decisions require information to be processed, but, you know, when you're sitting on hold forever and they're playing music you hate and then interspersing it with ads that you hate, I don't know that you're analyzing it, but there's part of you that's saying, these people don't care about my time, they don't respect me, they don't like me. Hmm. People take it very personally, seems like what you're saying.

They do take it extremely personally. And, you know, it's really surprising when you think about it, the people act as if their consumer products or service corporations have a personal attitude toward them. How do first impressions affect how we compare ourselves with one another? Well, all of our perceptions of other people are relative. So, you know, does this person have my interests at stake, or their own interests only at stake, and are they competing with my interests? But this especially comes out in status judgments. Is this person doing better than I am or worse than I am?

When people compare up, they attribute competence to people who are higher status, and when they compare down, they attribute incompetence to lower status people. It's almost as if people believe in meritocracy that people get what they deserve, which they might or might not, but people seem to believe that. And so with companies, too, there's an interesting dynamic where luxury brands that are very high

status and you compare up and you say, oh, I want a Jaguar II, people see those luxury brands as being highly competent, just like they see high status people as being highly competent, but not nice. So they see BMWs and Jaguars and Rolex watches and so on as being confident but cold. How can they offset sort of that coldness that you say, some people associate them with. Well, one brand of watch that I know about says, you're not just buying this for yourself,

you're buying it for future generations. I may have a picture of a guy with his young son. So you could bring family into it. It's a little hard with a sports car to do that. Companies like people, they make mistakes all the time. Now, how can they earn back the trust of others? And, you know, what are some differences in similarities and how people and companies regain that trust.

Yes, you're right. All companies, you know, have, make mistakes and get into trouble now and again, just as people do. And basically, if they behave honorably about it, the way a person does, so if a person makes a mistake or offends you, if they apologize, you often forgive them if it's a sincere apology and not just sort of pro forma.

And so when companies say, I'm really sorry, we made a mistake, we take responsibility for this, we'll do our best to make it right as quickly as we can, then people forgive them. And so, for example, with Tylenol, they had a couple of disasters, one where somebody poisoned some of the capsules and one where later on, 10 years later, there was contamination at the plant, they shut down their operations and lost a lot of money making it right. On the other hand, Toyota with some of the issues that it had with its cars and GM with its cars, both companies denied it and ignored the problem and blamed it on the drivers. And, you know, they did not apologize until way late in the game,

and so they didn't display honorable intentions. So, you know, there are choices in how you handle a disaster like that, and it takes a long time to build trust back, but you have the best chance as a company to build trust. back if you act quickly to show your worthy intentions. How is technology, such as online shopping, change the way people respond to company brands? Well, what's interesting about the online venue is that it doesn't really change the fundamental psychological dynamics. It just makes them faster and makes it crowdsourced.

So when people have a bad experience with a company, everybody can find out about it very quickly the company can be rated and people tweet about it and blog about it and so on. On the other hand, if the company does something extraordinary and we give the story about Panera doing something extraordinary for somebody's dying grandmother, then everybody can hear about that quickly too and there can be tens of thousands of likes on Facebook. So I think the dynamic doesn't change. It's just faster, which is important because that means that companies have to act on the first instinct to be worthy in the way they're dealing with people because it'll catch up with them

if they don't. Well, thank you so much for joining us, Dr. Fist. This has been very interesting. My pleasure. For more information on Dr. Fisk's work and to hear more podcasts, visit our website at speakingof psychology.org. With the American Psychological Association's Speaking of Psychology, I'm Audrey Hamilton.