This blog looks at books such as Switch – How to Change Things When Change is Hard by Chip Heath & Dan Heath, published by Random House Canada, Toronto, 2010 because as Dividend buyers part of what we want is not to change.

We all do something but it may not be directly classified as an activity. An example is the housekeepers in hotels, a study was made – all the ladies were weighed half the maids were told what they were really doing is exercise; the other half was not. A month later the researchers checked the maids weight and the ones that were told they were doing exercise lost weight, the others did not.

Another example is a car wash gave a loyalty card – one group was given a card that started blanked and needed 8 to have a free wash. The other group was given a card with two stamps and on the 10th they were given a free car wash or both needed 8 washes to get one free. The result 19% of the first had a free car wash, but with some already filled in 34% received a free car  wash. One way to motivate is to make people feel as they’re already closer to the finish line that they might have thought. This is shrinking the change or lowering the bar for person to stepped over.

On the personal debt level – the best way to pay off is to make the minimum payments and payoff the lowest debt first forgetting about the interest rates. If you can do one then you can do the rest.

Another example is the head of procurement for the US government, there are many who do it – buying things for the US government. There are many stories and some make the press. How do you influence it? One day a conversation with a person sparked an idea. The employee wanted to walk over to the closest computer store and buy some items however the paperwork made it virtually impossible. The idea was to double your agency’s use of the government credit cards over the next year. Credit cards are issued, they have accurate records and for the government can be paid off during the month and for small purchases they are wonderful.  A single person can make a difference.

Former UCLA Coach John Wooden – when you improve a little everyday, eventually big things occur.. Don’t look for the quick, big improvement. Seek the small improvements one day at a time. That’s the only way it happens and when it happens it lasts”    Shrink the change.

When people make choices they tend to rely on one of two basic models of decision-making – the consequences or the identity model.  The consequence is weighing the cost benefit and making a choice to maximize our satisfaction. The identity model is Who am I? What kind of situation is this? What would someone like me do in a situation like this?  (limited calculation of cost benefits) We are a number of identities and those become part of your self-image and triggers the decision-making.  This means any change effort that violates someone’s identity is likely doomed to failure. How do you change a matter of identity rather than a matter of consequences?

An example is Lovelace Hospital Systems in Albuquerque, New Mexico was concerned about the rapid turnover of nurses, Instead of focusing on why people were leaving, the more important question was why are they staying? One of the answers was the nurses were loyal to the profession of nursing. The hospital developed programs which recognized them and set up mentorship programs so new nurses would understand the profession.

Another success story is Brasilata a Brazilian company which manufacturers steel cans. One of the expectations of the firm is when people are employed they are called inventors and expected to bring ideas to make the cans and processes better. In 2008 the inventors submitted 134,866 ideas or 145.2 per inventor. Not all will be implemented but the wealth of knowledge and abilities continue to make the company and its people better. One small example is when Brazil had power outages, the people found ways to save enough energy to fall below its quota and resell the extra energy.

Linking to dividend paying stocks, the future is the important aspect when investing, the expectation the company will be profitable and continue to pay a dividend. That is a big expectation and with continued change in its people hard to realize. How the company embraces change will say a lot about whether it can continue to pay dividends.

There are more questions than answers, till the next time – to raising questions.