CHAPTER 14
System 1 versus System 2 Experiences

Daniel Kahneman is one of the world's most renowned psychologists, winner of the Nobel Memorial Prize in Economic Sciences, and author of the best‐selling book Thinking, Fast and Slow. In his book he describes two types of modes of thought, System 1 and System 2. System 1 thinking is very fast, is instinctive, and doesn't require much focus or attention. It's essentially your brain on autopilot. For example, if I were to ask you, “1 + 1 = ?” you would immediately know the answer. System 2 thinking, on the other hand, is more purposeful, slower, and more deliberate. It's something that requires us to take a step back to process.

As an example consider the following riddle. A bat and a ball costs $1.10. The bat costs $1 more than the ball. How much does the ball cost? The immediate response that most people jump to is 10 cents because $1 plus $0.10 is equal to $1.10, right? But if you take a step back, you will realize that if the ball costs $0.10 and the bat costs $1 more than the ball, then the bat must cost $1.10. However, if you add those two numbers together ($1.10 for the bat and $0.10), then you get $1.20, which is not the correct answer. Only after adding a little bit of brainpower and conscious thought will you be able to figure out that the correct answer is the ball must cost $0.05. This means the bat costs $1.05, and when you add these two numbers together, you get $1.10.

Although Dr. Kahneman explored decision‐making and cognitive biases in his book, I think it's great for us to apply this to how organizations approach and design employee experiences. Today, most organizations in the world are stuck with System 1 experiences. That is, they think of employee experience as a checklist of short‐term initiatives that they can invest in. Looking at the 17 variables above, many might be tempted to turn this into a checklist that requires little thinking or effort. Just print it out and go down the list. Create a diversity program, implement new training and advancement solutions, give people great tools and a fancy workplace, and boom! You're done. Unfortunately this is exactly the pitfall that many organizations fell into concerning employee engagement. Checklists and steps are great for putting together furniture and baking cakes, but in this case simply ticking off the boxes won't result in great employee experiences.

Every organization has some kind of management training program, but how many organizations offer emotional intelligence and self‐awareness modules as a part of that training the way Pandora does?

Every company has a diversity initiative, but how many companies make diversity a part of the executive compensation structure the way Sodexo does?

Every company says it wants to create a sense of purpose, but how many companies actually help every employee truly understand what his or her impact is the way the San Diego Zoo does?

Every company says it wants to give employees great tools to work with, but how many companies truly take the time to understand how employees work, conduct A/B tests, and hold focus groups and interviews the way Facebook does?

Hopefully you get the point that I'm trying to drive home here. The three employee experience environments and the variables that comprise them are of course crucial. These are what employees care about most but they are just ingredients. You've no doubt heard the saying “It's not what you say; it's how you say it,” which is applicable here. It's not just about what you do; it's also how you do it. Everyone can implement the concepts in this book, but few can do an amazing job. The key point that I mentioned at the start of this book and one of the big differences of the Experiential Organizations is that they simply know their people better than any other organization and they genuinely care about them. This is what allows these organizations to move beyond checklists to execute on these variables so well.

Organizations must shift to System 2 experiences, which are conscientious and purposeful efforts that are based on data, design, and employee contributions. I had the opportunity to speak with Marc Merrill, who is the co‐CEO and cofounder of the wildly popular Riot Games, which is famous for creating League of Legends, one of the most widely played multiplayer games that has ever been created. In 2010 this was a 60‐person company, but now it has over 2,000 employees around the world. Riot Games is one of the Experiential Organizations, and it has won numerous other awards for its culture and workplace. When I spoke with Marc about how Riot Games approaches employee experience and why it is able to build such a people‐centric organization, his response was quite simple: “If organizations really want to focus on people and make it a priority, then make it a real priority.” This type of mentality is what sets the Experiential Organizations apart from all the others. It's the difference between saying something is a priority and actually making it a priority. When an organization truly makes something a priority, you can physically see and feel the changes that take place. It's analogous to saying you want to get in shape versus actually eating right and going to the gym. With that frame of reference, Riot Games is definitely one of the most in‐shape companies on the planet!

Out of the 252 organizations I analyzed in this book, virtually all of them are in some way executing on the 17 variables mentioned above. You'd be hard‐pressed to find a company today that isn't thinking about new workplace design approaches, challenging conventional management theories, implementing diversity programs, or wanting to treat all employees fairly. It's not like all organizations are villainous, and these three environments and 17 variables are some kind of superhero secrets. They aren't. What sets the Experiential Organizations apart from everyone else isn't so much about what they do as it is about how they do it.

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