Tuesday 21 July 2015

What is "The Elephant Factor'?

This is just a very quick blog to explain where the term 'The Elephant Factor' comes from (or at least explain the title of my blog)

The Elephant Factor (a term first mentioned to me by my colleague and good friend Peter Burow) derives it's meaning from two sources, one from a traditional Indian folk story, and the other from psychology and behavioural economics.



The folk story is about six blind men describing an elephant while feeling very different parts of the animal. One man holding the foot would declare with absolute confidence that an elephant was like a tree trunk, which another who is holding the tail would scoff and say that it is clearly more like a rope. Each man thus had a completely different description of the elephant depending on their experience, and passionately argued that their point of view was more correct. The moral of the story of course is that they are all correct in their own way. This story is often used to describe how different theories and fields attempt to describe the human psyche, and a good perspective to keep in mind when reading a blog about behavioural observations.



The second influence comes from psychology and behavioural economics with the concept that we have two systems of thinking. One is a rational, conscious, slower, more contemplative mode of thinking (like a rider on an elephant), and the other is a faster, sub-conscious and more instinctual mode (more like the elephant being ridden). While we all like to think that our rider is always in control of the elephant, it is the elephant that ultimately decides where we go, and if the rider loses control the elephant will go wherever it feels like, which is often not where the rider wishes. This analogy has been used for centuries as a way to help people encourage behaviours such as dieting, fitness and mindfulness. In a way, behavioural economics is a way of studying how our 'elephant' influence our financial decisions and perception.

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