Don't Panic!

Author Ori Brafman’s book can help advisors help their clients avoid the perils of group dynamics.

Seems cuckoo; but it makes perfect sense, actually, that the Library of Congress catalogs the book, Sway: The Irresistible Pull of Irrational Behavior under both “Stupidity” and “Success”.

Smart, successful people and companies often make really stupid decisions when they fall victim to hidden psychological forces — sways — that unconsciously influence behavior and undermine logic. So say “Sway” co-authors, brothers Ori Brafman and Rom Brafman.

By realizing that such devilish undercurrents have power over clients’ investment decisions, financial advisors can help them make sounder ones.

“When you’re in a situation that has a lot on the line and are being pressured to make a decision, you’re much more liable to be irrational,” says Ori Brafman, 33, also co-author of the bestselling The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations.

An expert in advising companies and armed services on how to strategically structure their organizations, Brafman is an in-demand speaker by firms such as Smith Barney, Microsoft and Amazon, as well as The Harvard Business School and the U.S. military.

In Sway, he and brother Rom, a psychologist, discuss the powerful, concealed forces that lead to distorted decision-making. These include loss aversion (because pain of loss is more intense than the pleasure of gain); diagnosis bias (labeling people, ideas — stocks! — based on an initial opinion); and value attribution (relying on preconceptions about the value of a person or thing).

Publication of Brafman’s first book, Starfish — detailing how networks with shared ideologies but without a central structure work successfully — brought him impressive Department of Defense and FBI Counterintelligence consulting jobs on how to fight decentralized networks such as Al Qaeda.

From there, he began focusing on the ways decisions are made. “There are organizations that are very, very successful; but time and again their decision-making gets handled by sways,” says the peppy Israeli-born, Texas-bred Brafman, who lives in San Francisco.

A man of many talents, with a BA in peace and conflict studies from the University of California, Berkeley, he has founded a handful of unique entrepreneurial enterprises, authored a New York Times bestseller and continues to earn kudos as a charismatic public speaker. Oh, he also won a Mustang convertible on TV’s “The Price Is Right,” starting with his spot-on bid for a pair of Santa and Mrs. Claus dolls. Apparently he had more than enough grace under pressure to resist the self-sabotaging power of sway.

“Ori is refreshingly enthusiastic about everything — he just loves life,” says Paul Butler, an owner and CFO of software firm ESi Acquisition. Brafman was keynote speaker at the company’s conference of worldwide emergency-center managers two years ago. “He’s very curious: As keynote speaker, he immediately set out to learn as much as he possibly could about our company.”