The Wiki Man

Why it makes sense to buy your banker lunch

Social instincts honed in earlier times still have a huge, irrational pull on how we do business

7 May 2016

9:00 AM

7 May 2016

9:00 AM

We recently moved -offices from Canary Wharf to Blackfriars bridge. When you move after a long time in one place, you notice the surprising ways in which your behaviour is subliminally affected by your surroundings.

On my second day in the new office, someone came from Victoria to meet me. After about 25 minutes of useful conversation, I thanked them and they left. Something about the encounter seemed strange; I suddenly realised that, back in the old office, I’d never had such brief meetings. Instinctively it felt discourteous to give anyone who had made the longer trip to Canary Wharf any less than 45 minutes of your time.

This sense of obligation was unconscious. In some ways, something similar seems to apply to phone calls. If someone telephones from the US, you would feel rude not chatting for 15 minutes; with a call from a few miles away you can make do with a minute or two. It’s one of many possible examples where an instinct or cultural practice (in this case, the sensible principle that hospitality should rise in proportion to distance travelled) makes sense in one setting but doesn’t adapt to technology — just as people kept on tapping the end of a new cigarette on the table long after the introduction of the filter.

Perhaps that is why the adoption of video-conferencing is so slow? If you fly to meet someone, the expense and effort incurred both prove your devotion and create an assumed obligation in the mind of the person you are travelling to see — the 21st–century -equivalent of making a pilgrimage on your knees to honour a saint. Is video-conferencing so easy and inexpensive that it’s seen as cheating? Somehow we can’t help but assume the importance of a message is proportional to the cost of delivering it.

There is a huge amount of this kind of hair-shirted bias in modern business. Since it is harder and harder to know whether what you are doing has any value, people tend to assume that painful, gruelling activity must be worthwhile whereas pleasant activities are self-indulgent. Occasionally I am told, ‘I am afraid we can’t offer you tea or coffee — it’s part of a cost-saving drive.’ No doubt large organisations — or governments — might save a million pounds a year or so by banning PG Tips and digestives. Rationally I understand this. Viscerally, however, you can’t help but resent it a little when basic principles of hospitality are violated to save the cost of a few tubs of UHT and a pink wafer.

Besides, apparent extravagance can be cleverer than it seems. Corporate entertainment often acts as an efficient form of psychological policing. If I had £100 million invested with a financial institution, I would regularly take them to lunch — and I’d offer to pay. It is human nature to feel far more shame in overcharging someone who buys you lunch than in skimming profits from the faceless owner of account number 567842/06b. By heightening sensitivity to shame, social interaction fosters trust more effectively than financial regulation can. The first seeds of the financial crisis were probably sown when bankers stopped spending their afternoons in pubs and started staring at screens instead.

Small acts of personal generosity can improve behaviour on both sides. This may explain a known psychological anomaly called the Franklin effect: we like and trust people more not only after they have done small favours for us, but also when we have done favours for them. This makes sense once you realise that you risk greater shame and moral outrage for cheating a benefactor than a stranger. Seen in those terms, perhaps those pink wafers are a bit of a bargain.

Got something to add? Join the discussion and comment below.

Rory Sutherland is vice-chairman of Ogilvy Group UK.

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Show comments
  • davidshort10

    I remember an episode of Curb Your Enthusiasm when Larry David’s cousin complained that he hadn’t called when he was in New York visiting from LA. Larry pointed out that he didn’t ever call him from LA. I suppose to some extent there is more effort though in someone calling the UK from the US as, if using a phone rather than Skype, it costs a lot.

    • rorysutherland

      Although actually it doesn’t. Calling a mobile phone a mile distant using my home landline is several times more expensive than calling the US or Australia – I used to pay 3p a minute, now I pay £5 a month for free calls to about 25 countries. It just feels more expensive when you call further afield.

      I remember the CYE episode. Wonderful.

      • davidshort10

        Mobile phones are different, of course. I pay not very many euros a month for free landline calls to Europe from anywhere in the world. I also have a Skype number with a London code that anyone can call. The clarity of Skype has improved so much over the years. And of course I can use Skype from my iPhone. A far cry to my first trip to Africa with the UN about 15 years ago when I racked up a $1,000 bill on my UN phone!

        • rorysutherland

          I can remember people checking out of hotels in the late 90s and finding their phone bill was larger than their room bill.

          • davidshort10

            Me too, but hotel chains still try to spanner money out of their guests on the phone by having a ‘national’ number so you can’t ring your actual hotel direct. Hotels must not attract bright management as this is the sort of thing, along with charging for wifi (it’s a bit like charging for electricity), that simply deters me from booking with that chain. And the absence of a phone in the room so you cannot call down when you’ve just come out of the shower and noticed there are no towels is another deal breaker!

  • Ron Todd

    Most of us could not afford to buy a banker the type of lunch they would find acceptable.

    • Julian Smith

      Most of us don’t have the £100m deposit that Rory argues would make taking them to lunch a good idea. If we did, I dare say the type of lunch a banker might find acceptable would cost little more than pocket change.