Freakonomics, the product of a joint effort between economist Steven Levitt and award-winning journalist Stephen Dubner, was amongst the first books published in this genre. It many ways, it serves as the paragon of all non-fiction books that try to flip notions that much of society take for granted on their head. They delve into a number of issues, but the overarching theme in this groundbreaking book is that things are not always as they seem.
In their groundbreaking novel, Dubner and Levitt present a number of situations in which the two applied economic principles to uncover often-surprising and seemingly irrational explanations for certain phenomena. In one particularly entertaining chapter, the two authors discuss the pattern and evolution naming children and how, above all else, it is influenced by socioeconomic status. Dubner and Levitt spend a chapter discussing real estate agents, the vocabulary they use, and how they may not truly have your best interests at mind. The two, nearly a decade after they published their book, record a weekly podcast in which they examine situations through an economic lens.
While these anecdotes are certainly entertaining and make for great lunch-table conversations, there also a number of truly valuable business lessons that leaders should take full advantage of. At its core, Freakonomics is a book about incentives and how they can lead to disastrous results if misaligned. Levitt and Dubner explain how a breakdown in incentives was the chief cause for systemic cheating in the sport of sumo wrestling as well as in the American school system. Incentives are great, but be very careful when you are placing them or they will almost certainly have unintended consequences.
Freakonomics also demonstrates the the power of data. If properly harnessed, data can reveal startling insights that will help you make informed and educated business decisions. Furthermore, data, on its surface level, can often be misleading. Having someone equipped with the knowledge of how to handle and analyze massive datasets on your team is absolutely vital. Here is a short clip from my speaker series talking about the importance of knowledge and data, and how you need to soak it up and harness it to lead through adversity.