Power of HabitMindset is the key to success in real estate. It is the foundation that allows you to build and hone your skillset and then put it into action. In a good market, it creates top producers and in a bad market it is what separates the stars from everybody else.

Yet mindset is as much about personal habits as it is about positive thinking. In fact the right habits can automate a person’s mindset so that it is set to success autopilot. Unfortunately it can also do the opposite.

In the book The Power of Habit, Charles Duhigg explains why we follow through on some things and fail to follow through on others. It also gives practical tools so that we can automate our own success. Below are my notes from the book, which I am pleased to present as the first instalment of Business Boosters.

Please note that these are my notes from the book – so they may not be complete thoughts. As this is a long document, over 3000 words, I have highlighted the key points that stood out for me. Enjoy.

The Power of Habit: Why We Do What We do in Life and Business by Charles Duhigg

One paper published by a Duke University researcher in 2006 found that more than 40 percent of the actions people performed each day weren’t actual decisions, but habits.

Habits can be changed, if we understand how they work, there’s nothing you can’t do if you get the habits right.

When the brain converts a sequence of actions into an automatic routine—is known as “chunking,” and it’s at the root of how habits form.

This process within our brains is a three-step loop. First, there is a cue, a trigger that tells your brain to go into automatic mode and which habit to use. Then there is the routine, which can be physical or mental or emotional. Finally, there is a reward, which helps your brain figure out if this particular loop is worth remembering for the future

But the reason the discovery of the habit loop is so important is that it reveals a basic truth: When a habit emerges, the brain stops fully participating in decision making. It stops working so hard, or diverts focus to other tasks. So unless you deliberately fight a habit—unless you find new routines—the pattern will unfold automatically.

The problem is that your brain can’t tell the difference between bad and good habits, and so if you have a bad one, it’s always lurking there, waiting for the right cues and rewards

The secret to his success…was that he had found a certain kind of cue and reward that fueled a particular habit. It’s an alchemy so powerful that even today the basic principles are still used video game designers, food companies, hospitals, and millions of salesmen around the world.

He created a craving. And that craving, it turns out, is what makes cues and rewards work. That craving is what powers the habit loop.

First, find a simple and obvious cue. Second, clearly define the rewards

Research on dieting says creating new food habits requires a predetermined cue—such as planning menus in advance—and simple rewards for dieters when they stick to their intentions.

This is how new habits are created: by putting together a cue, a routine, and a reward, and then cultivating a craving that drives the loop.

They studied 266 individuals, most of whom worked out at least three times a week. What they found was that many of them had started running or lifting weights almost on a whim, or because they suddenly had free time or wanted to deal with unexpected stresses in their lives. However, the reason they continued—why it became a habit—was because of a specific reward they started to crave.

If you want to start running each morning, it’s essential that you choose a simple cue (like always lacing up your sneakers before breakfast or leaving your running clothes next to your bed) and a clear reward (such as a midday treat, a sense of accomplishment from recording your miles, or the endorphin rush you get from a jog).

But countless studies have shown that a cue and a reward, on their own, aren’t enough for a new habit to last. Only when your brain starts expecting the reward—craving the endorphins or sense of accomplishment—will it become automatic to lace up your jogging shoes each morning.

Hopkins doesn’t spend any of his autobiography discussing the ingredients in Pepsodent, but the recipe listed on the toothpaste’s patent application and company records reveals something interesting: Unlike other pastes of the period, Pepsodent contained citric acid, as well as doses of mint oil and other chemicals.2.31 Pepsodent’s inventor used those ingredients to make the toothpaste taste fresh, but they had another, unanticipated effect as well. They’re irritants that create a cool, tingling sensation on the tongue and gums. “Consumers need some kind of signal that a product is working,”

For companies, understanding the science of cravings is revolutionary.

Habits are a three-step loop—the cue, the routine, and the reward—but Dungy only wanted to attack the middle step, the routine.

He knew from experience that it was easier to convince someone to adopt a new behavior if there was something familiar at the beginning and end.

That’s the rule: If you use the same cue, and provide the same reward, you can shift the routine and change the habit.

Almost any behavior can be transformed if the cue and reward stay the same.

THE GOLDEN RULE OF HABIT CHANGE You Can’t Extinguish a Bad Habit, You Can Only Change It.


Alcoholics crave a drink because it offers escape, relaxation, companionship, the blunting of anxieties, and an opportunity for emotional release. They might crave a cocktail to forget their worries. But they don’t necessarily crave feeling drunk.

The physical effects of alcohol are often one of the least rewarding parts of drinking for addicts.


The psychologist was well acquainted with the Golden Rule of habit change. He knew that changing Mandy’s nail biting habit required inserting a new routine into her life.

Asking patients to describe what triggers their habitual behavior is called awareness training, and like AA’s insistence on forcing alcoholics to recognize their cues, it’s the first step in habit reversal training.

Then the therapist taught Mandy what is known as a “competing response.” Whenever she felt that tension in her fingertips, he told her, she should immediately put her hands in her pockets or under her legs, or grip a pencil or something else that made it impossible to put her fingers in her mouth. Then Mandy was to search for something that would provide a quick physical stimulation—such as rubbing her arm or rapping her knuckles on a desk—anything that would produce a physical response. The cues and rewards stayed the same. Only the routine changed

If you identify the cues and rewards, you can change the routine. At least, most of the time. For some habits, however, there’s one other ingredient that’s necessary: belief.

Once people learned how to believe in something, that skill started spilling over to other parts of their lives, until they started believing they could change. Belief was the ingredient that made a reworked habit loop into a permanent behavior

You don’t have to believe in God, but you do need the capacity to believe that things will get better.

By putting alcoholics in meetings where belief is a given—where, in fact, belief is an integral part of the twelve steps—AA trains people in how to believe in something until they believe in the program and themselves

It lets people practice believing that things will eventually get better, until things actually do.

People might be skeptical about their ability to change if they’re by themselves, but a group will convince them to suspend disbelief. A community creates belief.”

“Change occurs among other people,”

The same process that makes AA so effective—the power of a group to teach individuals how to believe—happens whenever people come together to help one another change. Belief is easier when it occurs within a community.

We know that a habit cannot be eradicated—it must, instead, be replaced.

And we know that habits are most malleable when the Golden Rule of habit change is applied: If we keep the same cue and the same reward, a new routine can be inserted.

But that’s not enough. For a habit to stay changed, people must believe change is possible. And most often, that belief only emerges with the help of a group.

The evidence is clear: If you want to change a habit, you must find an alternative routine, and your odds of success go up dramatically when you commit to changing as part of a group. Belief is essential, and it grows out of a communal experience, even if that community is only as large as two people

O’Neill believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization.

These are “keystone habits,” and they can influence how people work, eat, play, live, spend, and communicate. Keystone habits start a process that, over time, transforms everything.

Keystone habits say that success doesn’t depend on getting every single thing right, but instead relies on identifying a few key priorities and fashioning them into powerful levers.

The habits that matter most are the ones that, when they start to shift, dislodge and remake other patterns.

Routines are the organizational analogue of habits.”

If you focus on changing or cultivating keystone habits, you can cause widespread shifts.

Bowman believed that for swimmers, the key to victory was creating the right routines.

Small wins are exactly what they sound like, and are part of how keystone habits create widespread changes. A huge body of research has shown that small wins have enormous power, an influence disproportionate to the accomplishments of the victories themselves.

Just as Michael Phelps’s routines had nothing to do with swimming and everything to do with his success, so O’Neill’s efforts began snowballing into changes that were unrelated to safety, but transformative nonetheless.

This is the final way that keystone habits encourage widespread change: by creating cultures where new values become ingrained.

Keystone habits make tough choices—such as firing a top executive—easier, because when that person violates the culture, it’s clear they have to go.

Cadets who are successful at West Point arrive at the school armed with habits of mental and physical discipline. Those assets, however, only carry you so far. To succeed, they need a keystone habit that creates a culture—such as a daily gathering of like-minded friends—to help find the strength to overcome obstacles. Keystone habits transform us by creating cultures that make clear the values that, in the heat of a difficult decision or a moment of uncertainty, we might otherwise forget.

“Sometimes it looks like people with great self-control aren’t working hard—but that’s because they’ve made it automatic,” Angela Duckworth, one of the University of Pennsylvania researchers told me. “Their willpower occurs without them having to think about it.”

Unless baristas are trained to put aside their personal problems, the emotions of some employees will inevitably spill into how they treat customers. However, if a worker knows how to remain focused and disciplined, even at the end of an eight-hour shift, they’ll deliver the higher class of fast food service that Starbucks customers expect.

Executives wrote workbooks that, in effect, serve as guides to how to make willpower a habit in workers’ lives.

The scientists wondered, would the students who had already expended their willpower by ignoring the cookies give up on the puzzle faster? In other words, was willpower a finite resource?

Willpower isn’t just a skill. It’s a muscle, like the muscles in your arms or legs, and it gets tired as it works harder, so there’s less power left over for other things.”

“If you want to do something that requires willpower—like going for a run after work—you have to conserve your willpower muscle during the day,” Muraven told me. “If you use it up too early on tedious tasks like writing emails or filling out complicated and boring expense forms, all the strength will be gone by the time you get home.”5.6

Will exercising willpower muscles make them stronger the same way using dumbbells strengthen biceps?

(A KIPP school in Philadelphia gave students shirts proclaiming “Don’t Eat the Marshmallow.”)

No matter how much their employees want to do a great job, many will fail because they lack self-discipline. They show up late. They snap at rude customers. They get distracted or drawn into workplace dramas. They quit for no reason.

The solution, Starbucks discovered, was turning self-discipline into an organizational habit.

“When a customer is unhappy, my plan is to … ”

LATTE method. We Listen to the customer, Acknowledge their complaint, Take action by solving the problem, Thank them, and then Explain why the problem occurred.

There’s the What What Why system of giving criticism and the Connect, Discover, and Respond system for taking orders when things become hectic

This is how willpower becomes a habit: by choosing a certain behavior ahead of time, and then following that routine when an inflection point arrives.

I really, genuinely believe that if you tell people that they have what it takes to succeed, they’ll prove you right.”

When Muraven started exploring why students who had been treated kindly had more willpower he found that the key difference was the sense of control they had over their experience.

Simply giving employees a sense of agency—a feeling that they are in control, that they have genuine decision-making authority—can radically increase how much energy and focus they bring to their jobs.

He would have known to acknowledge her authority, and then ask politely for one small exception.

they are the products of thoughtlessness, of leaders who avoid thinking about the culture and so let it develop without guidance.

“Much of firm behavior,” they wrote, is best “understood as a reflection of general habits and strategic orientations coming from the firm’s past,”

Organizational habits offer a basic promise: If you follow the established patterns and abide by the truce, then rivalries won’t destroy the company, the profits will roll in, and, eventually, everyone will get rich.

Bottom of Form

All those leaders seized the possibilities created by a crisis. During turmoil, organizational habits become malleable enough to both assign responsibility and create a more equitable balance of power.

if we start our shopping sprees by loading up on healthy stuff, we’re much more likely to buy Doritos, Oreos, and frozen pizza when we encounter them later on.

chains such as Target began to understand they couldn’t rely on the same old bag of tricks. The only way to increase profits was to figure out each individual shopper’s habits and to market to people one by one, with personalized pitches designed to appeal to customers’ unique buying preferences.

“Consumers sometimes act like creatures of habit, automatically repeating past behavior with little regard to current goals,”

found the habits hidden in the facts

People’s buying habits are more likely to change when they go through a major life event.

the average parent spends $6,800 on baby items before a child’s first birthday.

Listening habits allow us to unconsciously separate important noises from those that can be ignored.

Whether selling a new song, a new food, or a new crib, the lesson is the same: If you dress a new something in old habits, it’s easier for the public to accept it.

To market a new habit—be it groceries or aerobics—you must understand how to make the novel seem familiar.

Social habits are why some initiatives become world-changing movements, while others fail to ignite.

And the reason why social habits have such influence is because at the root of many movements—be they large-scale revolutions or simple fluctuations in the churches people attend—is a three-part process that historians and sociologists say shows up again and again:

A movement starts because of the social habits of friendship and the strong ties between close acquaintances. It grows because of the habits of a community, and the weak ties that hold neighborhoods and clans together. And it endures because a movement’s leaders give participants new habits that create a fresh sense of identity and a feeling of ownership.

gave more than she got,” People who hardly knew Rosa Parks decided to participate because of a social peer pressure—an influence known as “the power of weak ties”—that made it difficult to avoid joining in.

However, to modify a habit, you must decide to change it. You must consciously accept the hard work of identifying the cues and rewards that drive the habits’ routines, and find alternatives. You must know you have control and be self-conscious enough to use it—once you know a habit exists, you have the responsibility to change it.

And once you understand that habits can change, you have the freedom—and the responsibility—to remake them. Once you understand that habits can be rebuilt, the power of habit becomes easier to grasp, and the only option left is to get to work.

“Today I about touched bottom, and perceive plainly that I must face the choice with open eyes,”

Later, he would famously write that the will to believe is the most important ingredient in creating belief in change.

Once we choose who we want to be, people grow “to the way in which they have been exercised, just as a sheet of paper or a coat, once creased or folded, tends to fall forever afterward into the same identical folds.”

If you believe you can change—if you make it a habit—the change becomes real. This is the real power of habit: the insight that your habits are what you choose them to be.

Once that choice occurs—and becomes automatic—it’s not only real, it starts to seem inevitable, the thing, as James wrote, that bears “us irresistibly toward our destiny, whatever the latter may be.”

Water, he said, is the most apt analogy for how a habit works. Water “hollows out for itself a channel, which grows broader and deeper; and, after having ceased to flow, it resumes, when it flows again, the path traced by itself before.”9.31 You now know how to redirect that path. You now have the power to swim.

Change might not be fast and it isn’t always easy. But with time and effort, almost any habit can be reshaped. THE FRAMEWORK: • Identify the routine • Experiment with rewards • Isolate the cue • Have a plan.