Engineering vs. Psychology
During the post-WWII economic boom of the mid-20th century, skyscrapers began shooting up across major U.S. With taller buildings came a massive spike in daily traffic on the elevator systems. Building managers and real estate companies faced a crisis. Tenants and office workers were absolutely furious about “slow elevators.” Large corporate tenants were even threatening to break their leases and move out.
Desperate for a fix, the engineers investigated found solutions which were not possible as the buildings were already built. These physical modifications were either structurally impossible or very expensive. The engineers essentially gave and said, “The elevators are running at their maximum safe mechanical speed. People just have to live with the wait.”
Management approached the problem from a different angle. They brought in industrial psychologists. They analyzed the situation and realized the engineers had been solving the wrong problem.
The True Problem was not about the elevators were “slow”, it was the wait time. The real problem was boredom and anxiety. When people stood in a metal box with absolutely nothing to do, that two-minute ride felt like twenty minutes.
Psychologists suggested to install mirrors in the elevator.
People loved looking themselves in the mirror. This gave them something to do while waiting. All complaints evaporated overnight. The mirrors didn’t make the elevators move faster, but they hacked human brain psychological.
Similarly in Investment decisions, Instead of expending all your energy to find the perfect investment option, make sure you explore the multiple options with framing the right problem.
Even if one get best investment product, there is no use unless if solves the real problem with it. Investment is not about best funds or stocks or best returns, it is about improving the process.
At Shalibhadra, we believe that doing traditional transactions is not only solution for investor handholding. It is more about behavioural and psychological handholding.
Nishit Siddharth Shah