IKEA Effect

I was listening to NPR on my morning commute; they were discussing the IKEA effect.  Apparently this has been studied quite a bit at the Harvard Business School.  Here is the write-up of the project from HBR Breakthrough Ideas for 20090205.

IKEA Effect

IKEA

Labor is not just a meaningful experience – it’s also a marketable one. When instant cake mixes were introduced, in the 1950s, housewives were initially resistant: The mixes were too easy, suggesting that their labor was undervalued. When manufacturers changed the recipe to require the addition of an egg, adoption rose dramatically. Ironically, increasing the labor involved – making the task more arduous – led to greater liking.

Our research shows that labor enhances affection for its results. When people construct products themselves, from bookshelves to Build-a-Bears, they come to overvalue their (often poorly made) creations. We call this phenomenon the IKEA effect, in honor of the wildly successful Swedish manufacturer whose products typically arrive with some assembly required.

In one of our studies, we asked people to fold origami and then to bid on their own creations along with other people’s. They were consistently willing to pay more for their own origami. In fact, they were so enamored with their amateurish creations that they valued them as highly as origami made by experts.

We also investigated the limits of the IKEA effect, showing that labor leads to higher valuation only when the labor is fruitful: When participants failed to complete an effortful task, the IKEA effect dissipated. Our research suggests that consumers may be willing to pay a premium for do-it-yourself projects, but there’s an important caveat: Companies hoping to persuade their customers to assume labor costs – for example, by nudging them toward self-service through internet channels – should be careful to create tasks difficult enough to lead to higher valuation but not so difficult that customers can’t complete them.

Finally, the IKEA effect has broader implications for organizational dynamics: It contributes to the sunk cost effect, whereby managers continue to devote resources to (sometimes failing) projects in which they have invested their labor, and to the not-invented-here syndrome, whereby they discount good ideas developed elsewhere in favor of their (sometimes inferior) internally developed ideas. Managers should keep in mind that the ideas they have come to love, because they invested their own labor in them, may not be as highly valued by their coworkers – or their customers.

My thoughts……

NicoleBedardPhotography-5

I see similarity to the IKEA Effect and human behavior regarding health.  We are inundated with instant weight loss now adds, GNC stores stocked to the gill with build muscle now potions, global gyms on every corner selling the 30 minute workout.  The problem, much like eating a cheese burger off the dollar menu at McDonalds after the freshness wears off you will be left with little to no health gain, and a feeling of longing for another cheeseburger.  Why is McDonalds so cheap, how can global gyms afford to stay open with $30 a month membership fees?  The answer my friends is quality.  You’re not getting a grass-fed full of awesome omega goodness burger at McDonalds, you are eating soy burgers.  You are not getting personalized fitness at global gyms, they could care less about your goals and gains, and I would bet you really aren’t reaching your goals.  To my point, CrossFit is successful because it works, clients start to see gains.  They start to fit in their jeans a little better, their friends notice how great they look and feel, they start to eat better…maybe learn to cook and eat a little paleo, they get involved with the gyms blog, they post their workout times on the white board.  Why?  They do this because CrossFit workouts are hard, they aren’t given, they are earned and you become proud of what you have accomplished.  You don’t undervalue your gains, which in turn makes you more invested.  I hear my co-workers spout off all the time that CrossFit is too expensive, paleo is too expensive.  To me it isn’t though.  I am more than willing to pay more for a gym membership and my groceries because I understand the value of good programming, class instruction and quality food – I am invested.  What is wrong with being willing to pay a little more for your origami?  We live in a society that constantly feeds to the Hollywood ideal of how we should look and feel.  I am not airbrushed, nor will I ever be on a cover of a magazine, but feeling good, eating right and being part of my CrossFit community gives me confidence and I am proud of that.  Helping people see their worth isn’t such a bad thing.    

Please feel free to share your thoughts.

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