Book Review: Alchemy by Rory Sutherland

By Jon Elordi

First let me give the full title of the book, Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. Alchemy by Rory Sutehrland has a doozy of a title and a doozy of a book. The book can be summarized as lessons learned by Rory Sutherland during his 30-year career at Ogilvy. And there are many lessons taken from this book that can be used in advertising, why I read it, but also in life. 

To start the book is very Talebian. If you’ve never read Taleb, you should, But if you haven’t. The style of the book is to use some simple concepts to show how they work in the world and then show how our institutions/logic do not abide by these principles. Taleb has the ability to write whole books centered around just one of these principles, “Skin in The Game,” “Anti-Fragile,” etc… Luckily in Alchemy, Rory Sutherland gives us a few concepts to work with. 

The crux of the book lies in the idea that humans are irrational. Or to put it better, Logic does not apply to humans perfectly.  And that the difference between the logical outcome and the illogical outcome can be magical. This gap is where alchemy is created according to Sutherland. This gap is also why mainstream economics is can be wrong. It’s called the dismal science for a reason: The Lack of Magic.

Alchemy in Human Irrationality

There are a few reasons for this gap. Human being due to evolution have acquired certain biases that make us irrational. For example, Human beings have a strong Negativity Bias. Losing $100 hurts more than winning $100. This observation alone throws a wrench in utility theory used by mainstream economists. From this heuristic that pain hurts more than pleasure feels good, humans often develop a strategy to minimize pain instead of maximizing pleasure. Yet another wrench was thrown at utility theory. You throw in an understanding that humans hate uncertainty and that branding is a great way to reduce uncertainty, and now you know why McDonald’s is popular with tourists in Italy. Yes, Italian food is much better. But it’s also riskier. It might taste bad or make you sick. McDonald’s isn’t as good. But you know you’re unlikely to get food poisoning from their french fries. 

Alchemy by Rory Sutherland in some ways is a very anti-enlightenment book. The idea that Human logic and rational thought are an end all be all is an enlightenment sentiment to its core. And very much disputed by Sutherland. He not only subverts economists and logic but goes after scientism. At the beginning of the book, Sutherland gives rules of alchemy. Here are a few:

  • The opposite of a good idea can also be a good idea
  • It doesn’t pay to be logical if everyone else is being logical
  • The problem with logic is that it kills magic
  • Solving problems using rationality is like playing golf with only one glub
  • If there were a logical answer, we would have found it.

Sutherland rejects that pure logic can solve every question. 

Alchemy Dies in Bureaucracy

Perhaps my favorite insight of Sutherland’s is his theory of the bureaucracy. He doesn’t call it that. But that’s essentially what it is. He gives a reason why logic is so pervasive and why it is considered a golden calf of the business world. The reason: You can’t be fired for being logical. I’ve worked for large corporations and medium-sized companies. If you want everyone in the room to look at you and treat you like an asshole, propose a truly out-of-the-box idea. 

Think of the outcomes of the “out-of-the-box” idea. If you’re right, maybe they call you a genius, but more likely they think you got lucky. If you’re wrong, you’re an idiot for not doing the logical thing. Contrast that with the outcomes of the logical idea. If you’re right, of course, you were logical. If you’re wrong, well it must be something else because you were logical. Having discussed already that humans are pain minimizing creatures, it now makes sense why the logical approach is so pervasive. It also shows why you’ll never see innovation from a corporation or government bureaucracy. 

Alchemy By Rory Sutherland

There are countless other lessons to be learned in Alchemy by Rory Sutherland. It’s a book full of wisdom and insights into our society and into the human mind. The book is well written. The chapters are short. The book features copious footnotes most of which are humorous and drive the point home. It’s a book every marketer or business professional should read. What Taleb did for uncertainty, Sutherland does for perception. He turns it on its head and tells you how it all really works.

To continue the trend of out of the mainstream ideas, check out my post about why I didn’t get an MBA, but instead chose a program you’ve probably never heard of. And here you can find some of my other book reviews.