The Power of Habit

by

Charles Duhigg

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The Power of Habit: Chapter 4 Summary & Analysis

Summary
Analysis
In 1987, investors met with the new CEO of the Aluminum Company of America (Alcoa), the former bureaucrat Paul O’Neill. To everyone’s surprise, instead of promising to increase profits, he spoke about worker safety, which he said would show the company’s devotion to excellence. All the investors told their clients to immediately sell Alcoa stock—which was a huge mistake. O’Neill made Alcoa’s profits and share price skyrocket while its injury rate fell to almost zero. His secret was to change habits. Specifically, he started with one small but powerful habit, which created a chain reaction across the organization. Such keystone habits are valuable because they can help people “shift, dislodge, and remake” other habits.
When people or corporations want to transform many aspects of their lives or cultures, the best place to start is often with keystone habits, which help build momentum for greater change. O’Neill’s presentation shocked Alcoa shareholders because CEOs conventionally focus on a company’s overall strategy and profits—not the well-being of its workers. Meanwhile, the shareholders also didn’t see how worker safety could form part of a broader strategy for improving the company as a whole. Of course, through this anecdote, Duhigg suggests that most corporate leaders and shareholders seriously underestimate the value that habit change can bring to their organizations.
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At first, O’Neill wasn’t sure if he wanted the CEO job at Alcoa. After rising through the Veterans Administration, he moved to the Office of Management and Budget, where he eventually became deputy director. He realized that lots of government spending was based on institutional routines rather than deliberate decisions. For instance, cities kept building new hospitals they didn’t need because a government program funded the construction and local politicians benefited from them. In contrast, other organizations built more effective habits. For example, to celebrate risk-taking, NASA scientists cheered every time a new rocket design blew up. In this way, O’Neill learned that agencies’ habits were the key to their success. 
Unlike many business leaders, O’Neill clearly understood the power of institutional habits because of his time in the government. Duhigg argues that institutions behave just like individuals: most of their decisions depend on ingrained habits, and these habits determine whether they succeed or fail. Whereas local politicians’ habit of building hospitals wasted resources, NASA’s habit of encouraging risk-taking promoted new discoveries, without punishing those whose experiments failed. Thus, just as individuals can create better habits through the Golden Rule and believing in themselves, the leaders of institutions can do the same.
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When O’Neill joined Alcoa, the company was struggling—quality was suffering and its workers were inefficient. But O’Neill couldn’t just force his workers to work harder. In order to change how the organization worked, he first needed a priority that everyone could agree on. He chose safety—his goal would be zero injuries.
O’Neill understood that he would likely alienate his workers if he forced them to change their habits in the hopes of improving efficiency and quality. Thus, O’Neill needed a way to make employees willing to try out these changes.
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After taking over at Alcoa, O’Neill faced opposition from Wall Street, the workers’ unions, and the company’s vice presidents. But he kept talking about worker safety, and nobody could disagree with him about that. To improve safety, managers needed to determine what was going wrong—which allowed them to streamline the production process. O’Neill made the company’s unit presidents immediately report all injuries and develop plans to prevent them from recurring. This gave them a strong incentive to open communication channels with workers and lower-level managers.
Divided institutions are unlikely to faithfully adopt new policies and procedures, so O’Neill first had to unify Alcoa’s competing factions. By focusing on safety, he got all of these factions to work together and believe in the company’s potential. Then, he used this cooperation as a template for other changes. His success shows how keystone habits can set a foundation for broader change in institutions that would be difficult to manage otherwise. Of course, this principle also applies to individuals—especially people who struggle to change many different behaviors all at once.
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O’Neill’s focus on safety also changed other parts of Alcoa’s culture. Unions agreed to measure individual workers’ productivity, and managers agreed to let individual employees stop the production line. Both of these measures would improve safety. Alcoa executives even started telling local construction workers (who didn’t work for Alcoa) to use better safety equipment. By fixing the causes of injuries—like inefficient processes for pouring molten metal or the use of old, broken machines—Alcoa also improved its products’ quality.
These changes show that O’Neill chose the proper keystone habit for his situation. Safety was an unthreatening, uncontroversial goal that would help Alcoa build the unity and open communication channels that it needed. This offers important lessons for anyone who want transform their own lives or organizations through keystone habits. Such people should identify what is blocking their efforts to change, then look for a keystone habit that is easy to change and will specifically eliminate that block.
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Keystone habits also make a difference in people’s lives. For instance, people who start exercising tend to start improving other habits, and families that eat dinner together tend to raise more successful children. By identifying and changing keystone habits, people can learn to improve throughout their lives.
While it can be difficult to distinguish correlation from causation in these examples, they still suggest that certain smaller habits can serve as a valuable jumping-off point for more important, larger ones. For instance, exercise can help people build new habits because it gives them energy and a sense of achievement in the short term.
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During the Beijing Olympics, Michael Phelps jumped into his routine as soon as he woke up. He ate breakfast, stretched for a half hour, warmed up in the pool for exactly 45 minutes, and then put on his bodysuit and listened to music until his race. Phelps’s childhood swimming coach, Bob Bowman, instilled key habits in him. Bowman showed Phelps how to focus before each race and taught him to “watch the videotape”—or visualize an ideal race—every morning and night. Over time, Phelps developed other solid routines, like his diet and sleep schedule.
Phelps demonstrates how people can use routines and keystone habits to better prepare themselves for high-stakes, uncertain events. “Watch[ing] the videotape” is his keystone habit. It allows him to take control of his races, turning them into an automatic routine. Like Tony Dungy’s football players, he succeeds when he reacts automatically instead of thinking through the race. Moreover, by following his usual warmup routine on morning before a big race, Phelps saves energy and avoids the nerves that could harm his performance.
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Phelps’s keystone habits were successful because they offered small wins. Small wins convince people to keep trying by showing them that success is possible. For instance, in the 1970s, the gay rights movement built momentum by first getting the Library of Congress to reclassify books about LGBT issues.
Small wins are valuable because of the way that different habits intersect. Reclassifying LGBT books was certainly a small win—it had virtually no immediate effect on LGBT people’s place in American society. Instead, its purpose was to build momentum and gain attention for the gay rights movement.
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Similarly, Bob Bowman taught Phelps to treat his warm-up as a series of small wins—they go exactly like he plans when he visualizes winning. However, when his race started that morning during the Beijing Olympics, he realized that there was a problem: his goggles were leaking. By his final lap, they were totally full of water. He couldn’t see at all. But he stayed calm: he had already run through this scenario countless times before. He confidently kept going—and he set a world record.
By treating his entire warm-up as part of his routine, Phelps turns the actual race into merely the last in a series of challenges that he is already winning. By the time he starts a race, he has already achieved most of what he visualized the night before. And by visualizing potential accidents and problems, he takes control over them, turning them into part of his plan. Thus, Phelps’s leaky goggles didn’t jar him—they were part of his plan B, and they were a relatively small disruption in the context of his all-day routine.
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Six months into his job at Alcoa, Paul O’Neill learned that a young worker in Arizona had jumped over a safety wall to try to repair a piece of equipment—which hit him in the head and killed him. O’Neill spent the next day reconstructing the accident with other executives. He blamed company’s own “failure of leadership” for the man’s death and focused on reworking safety policies. Injury rates declined in a matter of weeks, and O’Neill congratulated his workers on this small win. This snowballed into other changes. Workers started calling O’Neill not just with safety recommendations, but also with ideas for helpful changes across the manufacturing process.
At first, many Alcoa employees didn’t take O’Neill’s talk about safety very seriously. But his response to the worker’s death proved that he was completely genuine. This death gave him an opportunity to modify many aspects of the company culture that he likely wanted to modify anyway—but wouldn’t have been able to change due to opposition from different factions in the company. In other words, a company that succeeded at safety would likely succeed at everything else that O’Neill needed to improve. But it was far easier to make these changes for the sake of safety.
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When O’Neill was analyzing infant mortality data for the government, he learned to get to the root of the problem by continually asking questions. He realized that improving college curriculums would improve high school biology teachers in rural areas. Better biology classes would help young mothers improve their nutrition, which would in turn reduce premature births. And reducing premature births was the key to reducing infant mortality. O’Neill’s insights helped dramatically reduce the U.S.’s infant mortality rate. They show that beyond providing small wins, keystone habits also create “structures that help other habits to flourish.”
For Dungy, asking questions was an important keystone habit in its own right. This helped him see the hidden connections and patterns behind public policy issues, which enabled him to do his job better. Meanwhile, his research on infant mortality also shows how certain keystone organizational habits—like effective college biology instruction—have ripple effects throughout the rest of society. Thus, understanding the cause-and-effect links between different phenomena is one effective way to identify keystone habits.
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People can also apply keystone habits to their lives. For instance, doctors used to ask obese patients to lose weight by changing almost all of their habits at once. But a 2009 study showed that by simply keeping a food log once per week, people with obesity can learn to gradually notice and improve their eating habits.
Keeping a food log is much less daunting and more sustainable than changing all of one’s health habits at once. Namely, the food log requires people to build one more, relatively straightforward habit into their lives. But total, instant transformation requires them to stop all of their existing habit loops. This requires a superhuman amount of effort, particularly because—as Duhigg explained in the prologue—it’s impossible to ever eliminate habits from the brain (only to replace them with new ones).
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At Alcoa, O’Neill used safety as a justification for building a company-wide email network. This happened in the early 1980s, long before corporate email was standard. Eventually, everyone in the company started using this network for almost all of their communication. This change to the way they communicated allowed them to coordinate much faster than their competitors.
Alcoa’s email network is another example of how keystone habits build “structures that help other habits to flourish.” O’Neill used the all-important justification of worker safety to pass through changes that, on their own terms, might have seemed too controversial or unimportant.
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In 1996, a nun attended a shareholder meeting to report dangerous working conditions at an Alcoa plant in Mexico. While this was inconsistent with O’Neill’s records, he sent a team to Mexico to investigate. They learned about an unreported accident a few weeks prior—and O’Neill quickly fired the executive who failed to report it. This demonstrates the third and final benefit of keystone habits: they change organizations’ culture. For instance, the greatest predictor of success at the U.S. Military Academy is “grit”—or working hard to overcome difficult challenges. Cadets foster grit through group habits, like meeting with like-minded peers every morning.
O’Neill’s response again proved that his interest in safety was completely sincere. He built a new organizational culture—a set of shared values, beliefs, and practices—by demonstrating that anyone who didn’t take safety seriously didn’t belong at Alcoa. Culture is a powerful way to unite people. After all, as Duhigg explained in the previous chapter, the two key ingredients that make habit change sustainable are strong belief and support from a group. Thus, it’s unsurprising that O’Neill’s strategy helped bring Alcoa’s disunited factions together. Similarly, Duhigg suggests, the Military Academy cadets are able to develop willpower and perseverance through group support, which in itself is a routine.
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In 2000, O’Neill left Alcoa to become the U.S. secretary of the treasury. Other companies have adopted his focus on keystone habits, and Alcoa’s safety record continues to improve because of O’Neill’s inspiration.
Few believed in O’Neill’s methods when he started, but his success proved that changing keystone habits is a viable way to change complex organizations. Ultimately, he fostered lasting changes not only at Alcoa, but also in the business community as a whole.
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