Nat Ware on Why We’re Unhappy: The Expectation Gap at TEDxKlagenfurt (Transcript)

Nat Ware, founder and CEO of 180 Degrees Consulting, presents Why We’re Unhappy: The Expectation Gap at TEDxKlagenfurt conference. For more details about the speaker, read the bio here.

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Nat Ware – Founder and CEO, 180 Degrees Consulting

I remember being shot the first few times I went to Africa. I was shocked when I met a one-legged taxi driver in Kenya. I was shocked when I met Sonia, an orphan schoolgirl in Rwanda. And I was shocked when I met a disabled subsistence farmer in Mozambique.

What shocked me wasn’t their poverty, but their happiness. I found their happiness confronting — far more confronting than poverty. Of course, not everyone was happy, but of those above a basic subsistence threshold level, I was surprised at how genuinely content many of them were. And I became fascinated in this notion, this idea of happiness.

And since then I’ve researched it, I’ve worked on it, I’ve thought about it. I’m interested in it from an economics perspective. It’s one of the things that I research at Oxford. And I’m interested in it from a social enterprise perspective, because happiness is after all the ultimate social outcome.

And I think it’s particularly appropriate that we talk about happiness today, because we have with us the Prime Minister of Bhutan, the very man who pioneered, who introduced and who championed the idea of gross domestic happiness, rather than GDP as a way of tracking country’s progress, as a way of monitoring how governments are doing.

But before we go into that, I want to begin with a little quiz — a little game. It’s just a simple multiple-choice quiz and I’ve invited some other participants to join us on stage. So I want you to just raise your hand, I want you to answer honestly when I give the questions.

So the first question: imagine that you’re competing in the Olympic Games, imagine that you’re representing your country, what would you prefer out of the following: Would you prefer to come second, to come third, or to come second last? Answer honestly; who would prefer to come second. Raise your hand. Excellent! Who would prefer to come third? And who would prefer to come second last? Excellent.

Well, it seems like a large chunk of the audience wants to come second last. I’m not sure that I’d be selecting you for my Olympic team. But the monkeys — they select a third, a third, a third — they don’t quite understand the question, but they knew that there are three options. It’s probably no surprise that amongst the general population most prefer second.

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So that’s question one. Question number two: imagine that you’re given one of two options — either you win the lottery and you get $10 million, you can spend it however you want; or option B, alternatively you get a very small payment tomorrow but you get gradual payments throughout your lifetime — increasing payments, and in total you’d get $8 million over the course of your lifetime. If I gave you that option right now, what would you pick? Who would pick option A? A lot of people. Who would pick option B? Excellent.

Amongst the general population, most people seem to be quite short-sighted; most people like the $10 million tomorrow. Again the monkeys 50:50. They did recognize there were two options, not three.

Third and final question, you get to choose your salary, what you pick? You get 50,000 and everyone else you know gets 50,000, you get 50,000 and everyone else gets 60,000 — or you get 40,000 and everyone else you know gets 30,000; who would pick option A? Who would pick option B? Virtually no one. Who would pick option C? I think there’s one person in an audience of about 200. You’re pretty consistent with the general population, most go for option A. The monkeys, no surprises there.

But let’s now think about what the actual answers are. Let’s look at what the research says about what actually makes us content? What actually makes us satisfied? What actually makes us happy?

The question one: The answer is actually to come third, which I think was the lowest of the three options that you all gave. There’s no shortage of silver medalists who appear unhappy. So that was question one.

Question two: I think you did better on. You picked option B, you went against the general population and I think you beat the monkeys on this occasion; they beat you on question 1, you won question 2.

And for question 3, the correct answer was actually C, which I think only one person got correct. And so the monkeys beat you on two out of three on those in terms of what actually makes us content, satisfied, and happy as the research has shown.

So I think it’s fair to say that in general you’re slightly better predictors of happiness than the general population, but you’re still pretty pathetic; I’m sorry to say. I think the monkeys beat you, maybe that’s why they’re smiling, but if they won two out of three.

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And what’s interesting is that it’s not only us that’s bad predictors of happiness. The macro data actually supports this as well. We’re wealthier than ever but unhappier than ever. We’re more prosperous but more depressed. We’re less satisfied. I mean, we have faster and faster transport, but we’re faster and faster to complain about it. In many countries, there are now more suicides and homicides. We now have more goods and services than ever before. We have technology improving exponentially but we don’t see a corresponding increase in our life satisfaction, in our happiness. It’s perhaps one of the great paradoxes of our time.

And I think the obvious question is: why is it that governments and individuals are such bad predictors of happiness? Why is that we get it wrong so often? And I think it’s because we don’t really understand why it is that we’re often unhappy.

And so the obvious question is: Why is it that we’re unhappy? What’s the explanation? Now it’s not an easy question to answer, but it’s one that I’ve thought about, that I’ve researched, that I’ve dealt into. And through my research over the years, through thinking about it, I think there’s one explanation that I find far more compelling, far more plausible, far more persuasive than any other. And that explanation isn’t that we have so much choice that we get stressed; it’s not that we’re economically worse off. In many cases, we’re economically better off. It’s not that we just have great reporting of depression and suicide; that’s true but it only explains a small portion of the data. It’s not due to family breakdowns or reduced freedom.

You know, the reason why we’re unhappy — the most compelling reason as shown by the data, as shown by research relates to expectations. At a very basic simple level, we’re unhappy when our expectations of reality exceed our experiences of reality. When our expectations exceed reality. And I’d like to call this an Expectation Gap when our expectations are greater than reality.

It’s a very simple concept but it’s a hugely important concept to fully understand, to fully get our head around. And to help us get our head around it, I’d like to think in terms of three different types of expectation gaps — three different types of gaps based on the different ways in which we form expectations.