Tie yourself to the mast

The story

Odysseus wanted to hear the Sirens. He also knew that once he heard them, he would steer onto the rocks. So he had his crew plug their ears with wax, tie him to the mast, and ignore every order he gave until they were clear. He heard the song. He didn’t get to steer.

Thaler and Sunstein use the story to describe two states we all move between. In a cold state we are calm and can see what is good for us. In a hot state we are tired, rushed or under pressure, and we act on what we want now. In the cold state we badly underestimate how much the hot state will change us.

Business is full of hot moments. A deal is close at month end, so you accept terms you would have refused a week earlier. You are stretched, so you hire the first decent candidate instead of the right one.

Thaler’s answer was structure, not willpower. His Save More Tomorrow plan, built with Shlomo Benartzi, asked employees to commit now to saving part of their future pay rises. In the first company to use it, 78 percent joined, and average savings rose from 3.5 to 13.6 percent over 40 months. Nobody’s willpower improved. The structure did the work.