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Part 1 - Lessons in economic reality
On a recent flight from Hong Kong to Mumbai, Punam Keller found herself engaged in a conversation about cuisine with the man sitting next to her.
“We sat discussing how to marinate whole red chillies in vodka, so you can flavour your vodka as well as marinating the chilli peppers,” she explains. “I love to cook and I love to eat – and I love mixing stuff. It’s east meets west with no boundaries.”
As professor of management at Dartmouth College’s Tuck School of Business, she takes a similar approach to research, using her background in psychology, economics and marketing to come up with new approaches to designing customised healthcare and financial packages for companies. One minute, says Prof Keller, she can be reading an article on psychology and self-regulation and another, she will be perusing an economics paper on hyperbolic discounting.
“I collaborate with
researchers in the medical school, the economics
department, the anthropology department and the
psychology department . . . The most creative insights spring from interdisciplinary collaboration.”
Mumbai-born Prof Keller has crossed bridges in more ways than one. In 1979, she left India to study at Chicago’s Northwestern University. She has been in the US ever since but keeps her links with India intact, visiting once or twice a year. She now teaches the core marketing course that is part of Tuck’s MBA, as well as second-year programmes such as marketing strategy, consumer behaviour and public policy marketing.
When it comes to research, Prof Keller believes the interdisciplinary approach is crucial – and her education has left her with a wide knowledge of these different disciplines. After acquiring a bachelor’s degree in economics and statistics and, later, an MBA from Bombay University, she specialised in psychology while undertaking her marketing PhD at Northwestern University.
Her psychology studies have proved particularly useful. In her work on healthcare and financial planning, she has found, for example, that an individual’s outlook – whether they are optimistic or pessimistic, or willing to try new things or risk-averse – has a significant impact on how a marketing message or communication will be received, depending on whether it focuses on the positive or the negative aspects of the product.
This sort of insight, she claims, is only possible when different disciplines are combined. And in this respect, all three of her degrees have provided solid support for her work. Knowledge of psychology, she says, has given her the tools with which to listen to people. Economics allows her to group these people based on common needs. Finally, she uses the marketing discipline to come up with corporate strategies that address those needs.
It is an approach she has taken in research papers such as “Depressive Realism and Health Risk Accuracy: The Negative Consequences of Positive Mood” and “Informing Women about their Breast Cancer Risks: Truth and Consequences”.
Her findings could help healthcare companies give their patients a better service. Knowledge of whether a person is oriented toward prevention or promotion, for example, would enable pharmaceutical companies to tailor the instruction sheets that accompany prescription drugs, making patients more likely to comply.
One of Prof Keller’s current projects – examining why employees do not save for retirement – could have particular relevance to the business world.
Here she is using economic, anthropological, sociological and psychological perspectives to identify different goals – such as saving for travel, covering future healthcare costs or retiring early – and gain a broad picture of how people make saving decisions.
“Then we design the kinds of programmes that might encourage people to start saving or to save more, and we run a series of lab studies, focus groups and field experiments to see which of the programmes are more effective,” she explains.
Because Prof Keller is not an expert on financial planning, she reckons she can consider a wide variety of solutions to savings programmes. “Fish don’t see water, but I’m open to hearing anything,” she says. “Instead of taking the one-size-fits-all approach, the idea is not to make assumptions but to put yourself in the shoes of the person, see it from their perspective and design something that’s more useful.”
In designing something more useful, Prof Keller – who has a strong desire to contribute to society – believes it is not only individuals that will benefit. Companies, she believes, should be able to make savings on healthcare and retirement savings provision by coming up with programmes that are tailored more closely to their employees’ needs.
“If companies can understand how people make decisions about healthcare and retirement savings, then they can develop self-management incentive plans that will lower the burden on the company,” says Prof Keller. “And increasing the well-being of employees is integral to how those employees can serve customers.”
If she is right, the corporate world should take note. According to the Organisation for Economic Co-operation and Development, between 1990 and 2004 expenditure on health – both public and private – rose faster than gross domestic product in all 30 OECD members except Finland. On average, healthcare expenditure across the OECD accounted for 8.9 per cent of GDP in 2004, up from 7 per cent in 1990.
In the US, too, sharply rising healthcare costs have, in recent years, seriously dampened companies’ competitiveness, and contributed to financial difficulties in traditional manufacturing sectors such as the auto industry.
And, says Prof Keller, while companies have plenty of people helping them sell their products, a gap exists when it comes to resources that can help companies take care of their employees.
“Many companies feel they’re running a benefits office,” says Prof Keller. “And we know that employee satisfaction can put a cap on customer satisfaction, especially in a high face-to-face environment.
“So I’m hoping that adoption of some of my research findings could ultimately enhance both employee welfare and customer satisfaction.”
For the first article in this series, click here