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book review

SME book club: How can habits impact on a small business?

Every month as part of’s dedicated coverage of the SME sector, we’ll be reviewing a business book that makes a difference.

For the first in our series of business book reviews, we’ve taken a look at Charles Duhigg’s The Power of Habit: Why we do what we do and how to change.

Who should read this book?

Anyone who is interested in finding out about the hidden habits and routines that govern our lives, how they might impact on a start-up business, and how they might cause problems – or present opportunities.

What will it tell me?

You probably love Hey Ya by the southern hip-hop duo Outkast. Most people do. But when it first started getting airtime, radio listeners turned it off in their droves.

OutkastVEVO / YouTube

So how did it become the hit it is today? Radio DJs knew that it had the potential, but couldn’t get people to listen to it. So whenever they played it, they made sure the song either side of it was familiar to listeners.

They made it familiar, and made listening to it a comfortable habit.

The song went on to be a massive success. People stopped turning off their radios when it came on. It won a grammy and the album it was on sold over five million copies.

This is just one of the hundreds of vignettes New York Times reporter Charles Duhigg narrates in his book about habits.

Habit, it turns out, is central to how we live our lives. Paul O’Neill, when he was chief executive of metals giant Alcoa (before becoming US Commerce Secretary), transformed the fortunes of the creaking company by focusing on safety.

As the new focus on safety permeated the company, it began to weasel out cancerous bad practices that were affecting performance and profitability.

Habits, Duhigg shows, are not just neurological tics that work their way into our daily routines, but can become writ large on institutions and companies, for bad or good.

Take, for example, the King’s Cross fire in London in 1987, which claimed the lives of 31 people.

Duhigg explains that due to the organisational fiefdoms that ran the underground network, multiple opportunities to tackle the blaze were missed thanks to institutional intertia.

In a book about habit, Duhigg manages to push home his point without becoming repetitive. By using human stories to illuminate his central theory, he makes the book readable and entertaining.

What is that theory? That habits have a bigger impact on the culture, success and outlooks of both people and organisations than we think is possible. By paying attention to them, business people can wield the power of habit to drive their companies forward.

In a nutshell:

  • People are creatures of habit. At a primitive level, they help us organise our activities without consciously considering every task at every juncture.
  • However, habits can be bad as well as good, and they can apply to organisations, companies and societies just as much as they can to people.
  • Recognising the habits in your company, removing the bad ones and imparting good ones, can be a powerful way to drive results and performance.

If you liked this, you’ll love:

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Read: What does Keith Wood know about business>

Read: Best in Europe – Irish company beats off competition from field of 17,000>

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