Clever Geek Handbook
15 January 2026

The Future of Pricing

Recommendation

Sometimes the most obvious business practices are the most complicated – and the most interesting. This is the case with airline pricing, so E. Andrew Boyd has chosen a great topic. As an expert in the esoteric field of operations research, he has done business readers a great service by presenting the history, evolution, theory and practice of airline pricing, and by tracking how it revolutionized pricing in many other industries. Boyd weaves his personal stories and insights about mathematics, gambling and airline history into a very readable, high-level business book. While this is a seemingly esoteric topic, BooksInShort highly recommends his book to those in the transportation, travel, tourism and restaurant businesses. It will be especially valuable to intrepid executives in other industries who want to push the frontiers of pricing based on the latest science about operations.

Take-Aways

  • Airline pricing changed after the industry’s deregulation when carriers began charging business and leisure passengers each different fares.
  • Airlines use customer behavior and buying preferences to set the bid prices for tickets.
  • Airlines rely heavily on forecasting to evaluate their pricing strategies.
  • Scientific pricing is based on optimal inventory management.
  • An empty seat changes from saleable to worthless when the plane departs.
  • Inventory management for the airline means making a seat more saleable instantly by repricing it as circumstances evolve.
  • The travel industry – hotels, car rentals and cruise ships – has adopted the airline industry’s “scientific pricing” techniques.
  • Disney’s industrial engineers measure the amount of time people sit at restaurant tables (“turn time”), and adjust reservation slots and volume accordingly.
  • Companies using “customer-centric” or dynamic pricing charge different rates to different customers, based on each customer’s profile and needs.
  • Now that the airline industry has implemented dynamic pricing, other industries are following suit.

Summary

What’s the Price?

Setting prices is not easy. While pricing can determine the success of any company, most managers worry more about pricing their goods than about their actual pricing philosophies and policies. Companies choose prices that factor in their margins over the cost of production or they base their prices on what the competition charges. Pricing to accommodate a commission-based salesforce is a more complicated equation, in that managers must offer competitive prices and keep the sales staff happy.

“With decades of accumulated knowledge, airlines continue to play a central role in developing the science of inventory control and pricing.”

Technology can make the complex job of setting prices more manageable. Airlines have been especially proficient in using computers to set prices amid heavy regulations. For instance, they developed computerized reservation systems that predated the Internet by years. Today airlines “practice the most sophisticated pricing ever conceived” as they continually update ticket prices based on consumer behavior, cancellations and bookings.

“The range of emotions we experience when purchasing an airline ticket is often closer to that of a bidder in an auction than to that of a customer in a retail store.”

To derive the maximum benefit from your pricing policies, investigate the mathematics of “scientific pricing.” Companies use this calculation tactic to, for example, explore ways to increase a product’s profit potential. For instance, a seller might try to determine if it can double its profitability on an item that costs $100 to produce, if it can change the price from $101 to $102 without dramatically cutting consumer demand. Today’s proliferation of customer data has sparked a revolution. Industries as diverse as energy, chemicals, cargo, financial services, retail, pharmaceuticals, advertising and health care are all using this data to update pricing procedures.

Scientific Pricing

Scientific pricing takes all aspects of your business into account. Typically, any pricing process examines the performance of individual retail locations, the demands of different customers, and the historic relationship between price and demand. While acknowledging the role of randomness, companies use this data in forecasting, managing expectations and developing consistent, profitable pricing strategies. Any price has to cover production, cost-to-serve (such services as accounts receivable) and research, among other expenses.

“By the 1980s, the airline industry understood what many industries would wait years to discover: The computer isn’t just a record-keeping device, but a competitive weapon in the battle for the consumer.”

Scientific pricing is based on optimal inventory management. For an airline, the inventoried item is a seat. The variables can be weekend stays, preferred seating and the availability of refunds. This variety of options evolved after the airlines found that people are willing to pay more for a ticket with certain benefits. As a result, airlines turned to “yield management” or “revenue management” for better governance of how many seats to offer at what prices with which amenities. With these tactics, airlines can maximize their average revenue per passenger per trip, day by day, by studying patrons’ behavior and using the patterns to calculate what fares to offer.

“Research into pricing has grown at a remarkable pace in recent years as academics seek to understand the best way to price everything from insurance contracts to groceries.”

Pricing airline seats resembles pricing other commodities with two pivotal differences. First, an empty seat changes from saleable to worthless when the plane departs. Second, the airline can make a seat more saleable instantly by re-pricing it (based on inventory control). This becomes complex mathematically when an airline operates many flights each day using numerous aircraft. For instance, in 2004, American Airlines (AA) ran 1,013 planes, averaging 130 seats each. Every plane tookoff twice daily, and customers could reserve seats about a year in advance. This meant that, “on any given day” in ‘04, American handled “an inventory of close to 100 million seats.”

“Just as we successfully use weather predictions to plan our affairs, pricing systems can be powerful tools.”

The typical airline reservation system was not always sophisticated enough to handle constantly shifting tasks this big. American used to manage its seat reservations with an index card system, but those days are long gone. However, until the U.S. deregulated the airlines in 1978, selling a plane reservation was just order taking. For the most part, all tickets cost the same, with discounts for seniors, students and late-night travelers. After deregulation, airlines made a critical distinction between business and leisure travelers. This triggered the pricing revolution. Once airlines could charge different fares to different passengers, they had the financial opportunity to turn losses into profits. This matters because airlines operate on slim profit margins.

“As much as we want pricing science to be as exact as the laws of celestial motion, it’s not.”

Airlines capitalized on the habits of leisure and business travelers. Leisure travelers booked in advance and flew on weekends; businesspeople booked on short notice and flew during the week. Still unsure about charging different prices for the same service, the airlines began offering features that varied with price, such as advance booking or refundable tickets. This drove prices lower. In the years before Internet booking, each airline tried to develop its own travel agents’ reservation system. In 1983, American and United booked 43% and 27% of their respective revenues through these proprietary systems. By 1985, 86% of all airline tickets were sold via travel agents, mostly using airline reservation systems.

“Inventory control is the heart of pricing in the airline industry.”

The advent of widespread Internet use brought greater savings to consumers and airlines. U.S. Airways calculated that it spent $26 to sell a ticket through a ticket agent, $21 to sell it via a third party Internet site, $19 to use a travel agency, and $11 when passengers used its Web site. The Web also made it easier for passengers to compare the full range of fares for any trip.

“What airlines have done is to completely set aside cost when establishing the price that’s available in the market.”

Computerization enabled the airlines to capture a phenomenal amount of customer data. This fueled scientific pricing, which American Airlines expertly implemented using a system called the “Dynamic Inventory Allocation and Maintenance Optimizer,” which predicts how many high-fare new bookings the airline can anticipate on a specific flight based on past customer usage. Once that number of seats is booked, the airline discounts the remaining seats.

“The Internet unlocked the data floodgates, providing a means to experiment and proactively gather information on what sells.”

Airline pricing analysts and revenue managers work with this data to control inventory levels. For example, they decide how many seats on each plane to allocate to a certain class of refundable tickets. To determine this number, managers check historic data (i.e., how many tickets in a certain class AA usually sells on that flight) and then calculate the probability that it will sell this number of tickets again within a certain time prior to departure. As departure approaches, they adjust the number of available tickets in various price classes to increase revenue. This concept is critical to airline pricing, and now other industries use it as well.

“For consumers, the Internet created unheard-of transparency into ticket prices.”

This approach provides a conceptual framework that airlines use to create models, solve specific problems and identify variables. The objective is “optimal” pricing: “the best solution relative to a stated set of objectives, constraints and assumptions.” Companies use optimization to isolate how much each variable might contribute to or detract from profitability, in light of other measurable factors. For instance, with this model a shipping company can decide if it is better to add additional trucks or extra drivers. Computers make this more efficient since they use optimization techniques to consider every possible answer to complex problems.

Spoke and Hub

Most airlines set up a spoke-and-hub system in which passengers fly to a major city and then connect with flights to less popular destinations. This makes money when all the flights into the hub are booked, although passengers who come to the hub from different places have paid different fares. To manage revenues in such situations, airlines calculate each fare’s opportunity cost (the costs of not using an alternative) and use the information to decide, for instance, whether to deploy larger planes that can take more people into a profitable hub.

“The confusion between price and worth stems from our ethical makeup, demanding that price somehow be connected with the inherent value of an item.”

Airlines also rely heavily on forecasting to evaluate pricing strategies. This is complex, given the array of ticket prices, fluctuating demand and the difficulty of interpreting actual ticket sales. The airlines’ policy of selling only a set number of tickets at a given price may constrain sales. A second problem (since forecasters care what people will pay, not necessarily what they actually pay) is that passengers “buy down”: If they can, they choose cheaper tickets. Airlines also monitor each other’s fares, and incorporate that data into their processes. Since every airline uses this practice, they all make slight changes on their Web sites to confuse any automated price gathering the competition may use. Clearly, pricing science is not perfect.

Trains, Cars, Buses, Boats

About $1 of every $10 of the U.S. gross domestic product is spent on travel and tourism, a $1.3 trillion global business. Today travelers book most of their arrangements through the Internet and other reservation systems. By 2007, about 55% of all ticket sales were made online. The entire travel industry – hotels, car rentals, cruise ships – has now adopted the airlines’ scientific pricing techniques because of their many similarities: fixed capacity, flexible scheduling, time-perishable inventory, low variable costs and the ability to create new products by combining existing inventories (i.e., linking car rental and hotels rates). The math that generates these industries’ prices works about the same way. For example, the hotel industry uses inventory control to prevent “checkerboarding.” If one guest wants a room for a week, while another wants it for only four nights, the hotel has to make the right choice to earn the most revenue. Thus, it may require reservations for a minimum number of nights. Restaurants use a variation of this concept when they host “happy hours,” offering lower-priced drinks at times when their tables are often vacant.

“Justice hinges on the presumption that at a given place at a given time, a just price exists, and it can be reasonably approximated from price information in the market.”

Walt Disney World in Orlando, Florida, uses revenue management to maximize profitability at its restaurants, shops and 26,000 hotel rooms. For example, its industrial engineers measure the amount of time that people sit at restaurant tables (“turn time”), and adjust reservation slots and volume accordingly. Other variables also affect turn time, such as how quickly the food is ordered, cooked and served. Such inventory management helps Disney earn more without raising prices.

What’s It Worth?

Determining the price of an item is not the same as calculating its real value. A fair price is part commerce and part justice. Since the early Greeks, theologians, economists, philosophers and legal scholars have debated the right way to set just prices. This may seem theoretical, but it has ongoing applications. For instance, do the higher prices for groceries after a natural disaster represent gouging or a genuine increase in the suppliers’ costs? It also affects airline prices.

The airline industry focuses on keeping expensive capital assets (airplanes) working to generate revenues. However, airlines don’t calculate fares based on fixed costs, but on the expected number of passengers and their willingness to pay certain amounts. In effect, airlines auction their seats. Their reliance on customer behavior and buying preferences to set prices makes passengers more akin to competitors placing bids at an auction than to shoppers buying tickets. Ticket prices also change so frequently that customers have no reference points for making comparisons or even becoming disgruntled.

Airline fares are determined by a branch of applied mathematics called operation research, a misleading name for a discipline based on mathematics and optimization, using stochastics, statistics, forecasting and computer science. For instance, you stand in a single line to check your bags at the airport, instead of choosing among shorter lines at each clerk’s counter, because operations research has found that one queue is more efficient than several smaller ones. The actual mathematics behind scientific pricing can be summarized with the equation: R = PQ, where R is revenue, P is price and Q is quantity. When applied in the traditional demand curve (known as the price response function), this equation illustrates the relationship between price and demand: The higher the price, the lower the number of items sold. When this curve is used in revenue management, it takes on a new meaning. The goal of revenue management is not to sell every item in the inventory, but to segment the market so that the items can be sold at different prices to different customers, thus maximizing the profit for a given inventory.

This means that unsold revenue should not be considered lost revenue. Instead, it should open the discussion about the relationship between price and quantity. In practice, this leads to “dynamic pricing,” the practice of setting different prices for the same product. This is also part of “customer-centric” pricing: charging different prices to different customers for the same item, based on customers’ profiles. This could cause public relations problems, but the courts have said it is legal. Applying such mathematical models to human behavior can make any pricing strategy more sophisticated. It took the airline industry about 30 years to implement scientific pricing. Now other businesses are following suit.

About the Author

E. Andrew Boyd is the chief scientist and senior vice president of a consultancy that works with leading companies on pricing issues. He holds a Ph.D. in operations research from the Massachusetts Institute of Technology.

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The Future of Pricing

Book The Future of Pricing

How Airline Ticket Pricing Has Inspired a Revolution

Palgrave Macmillan,
 


15 January 2026

The Competitive Advantage of Nations

Recommendation

The causes of national advantage include much more than a country’s reserve of affordable workers and raw materials. This in-depth study of 10 nations from the post-World War II period through the 1980s provides a useful framework for fully assessing national economic prowess and momentum. Although Michael Porter’s research covers a limited time period, the seminal author and Harvard Business School professor has developed a clear method for distinguishing economic cause from effect and for demystifying complex global trends. His four-point “diamond”-shaped analysis of national advantage in the world economy remains apt and applicable. Porter, a pioneer, says some readers may prefer “shorter paths through the book,” a nearly 900-page tome. To that end, he organizes the content into self-contained, thematic sections of selective readings. BooksInShort recommends his enlightened explanation of why certain industries, and their home nations, either grow or shrivel in the heat of world competition.

Take-Aways

  • Globalization has triggered big shifts in the economic competitiveness of nations, benefiting some countries and punishing others.
  • To depict the “determinants of national competitiveness,” visualize them as a diamond’s four points.
  • First, a country needs strong “factors of production” such as labor and natural resources.
  • Second, a nation must have clusters of associated businesses, suppliers and industries.
  • Third, a state’s economic development depends on the depth and quality of domestic buyers’ demand for goods and services.
  • Fourth, a land’s industries grow based on the vitality of their internal “domestic rivalry.”
  • A nation facing a competitive disadvantage ideally will use that lack as impetus to create an offsetting advantage.
  • Once downward momentum in national competiveness begins, reversing it is difficult.
  • Production factors, investment, innovation and wealth drive different stages of a country’s competitive development.
  • Government policy should influence, not dictate, national competitive advantages.

Summary

The Luster of “Diamonds”

Since the end of World War II, globalization has triggered big shifts in national economic competitiveness, benefiting some countries and punishing others. It also is raising new questions about how a nation can compete economically with the rest of the world. But theorists generally have failed to agree on the multifaceted reasons for these swings in economic advantage.

“Nations, in an important sense, are either moving ahead or falling behind in the upgrading of competitive advantage. Standing still is difficult.”

The best gauge of national economic advantage is labor productivity. Economic output per worker must be the center of any analysis of national competitiveness. Increasing productivity is the clearest sign that a nation has strong industries with leading positions in global markets. Other purported proxies for national competitiveness – including low-cost labor and trade surpluses, among others – are misleading measures of a nation’s competitive might and momentum. Ideally, the internationalization of a nation’s economy will have a positive impact on its growth, but it will weaken national competitiveness if industries move high-skill jobs to foreign markets and keep low-skill jobs at home.

The Four “Determinants of National Competitive Advantage”

A four-point framework, visualized as the corners of a diamond, offers a useful analytical approach for assessing national competitiveness. The four points of a nation’s diamond determine the development or demise of every industry operating within its borders, and each national diamond has industry-specific benefits and detriments. The four determinants of a country’s economic competitiveness – or the four points in the diamond – are: 1) its supply of “factors of production” such as labor, natural resources and infrastructure; 2) the presence of clusters of associated businesses, suppliers and industries; 3) the depth and quality of domestic buyers’ demand for goods and services; and 4) the degree of “domestic rivalry” within industries.

“The pursuit of competitiveness defined as a trade surplus, a cheap currency or low unit labor costs contains many traps and pitfalls.”

These four determinants often interact in a self-reinforcing manner, moving the national diamond for each industry to a better, or worse, position with respect to its foreign competition. For example, the presence of sophisticated, demanding buyers in the home base can intensify competition among companies, leading to product and service innovations that further heighten buyer expectations. The absence of sophisticated domestic purchasers, on the other hand, will undermine an industry’s efforts to achieve global market leadership.

“Few factors of production are truly inherited by a nation. Most must be developed over time through investment.”

Different industries operating under the same national constraints will have different results and prospects. Firms expand in some nations and retrench in others, depending on how the determinants of national competitiveness affect their industry; almost any industry’s prospects improve in nations where the business climate allows improvement and innovation.

National Competitiveness in Select Industries

“No nation can be competitive in (and be a net exporter of) everything.” However, specialties are sustainable. Each country has special advantages that others might lack and might struggle to replicate. Many nations try to preserve their economic advantages rather than to improve them; in fact, recognizing and building on existing national economic advantages is better public policy than trying to invent new ones.

“The attitude toward wealth...varies across nations. It is a big motivator in the US, while looked upon with some suspicion in Sweden.”

The post-World War II development of four industries – Germany’s printing press industry, the United States’ patient-monitoring equipment industry, Italy’s ceramic tile industry and Japan’s robotics industry – illustrates the differences in determinants of national competitiveness. At the end of the 1980s, all four of these examples were international leaders in their industries:

  1. Japan’s 1960s shortage of labor, a critical factor of production, contributed to its ascension as a competitive force in the field of robotics.
  2. In Germany, the clustering of related businesses benefited the printing press industry; it gained from the presence of capable producers of German ink, paper and chemicals.
  3. The United States’ leadership in the world market for patient-monitoring equipment stemmed partially from sophisticated domestic buyers such as universities, hospitals and clinics. Spending on medical goods and services is relatively high in the United States. Its cluster of leading semiconductors, computer and software suppliers has helped its patient-monitoring equipment industry grow internationally.
  4. In Italy, domestic rivalry within the industry spurred the nation’s global leadership in the production of ceramic tiles. Manufacturers and suppliers cluster in and around Sassuolo. They compete fiercely against each other, often by serving specialized market segments.

Turning Disadvantages to Advantages

In many countries, the lack of one kind of national advantage helps to create offsetting benefits. For example, the Japanese government encouraged the nation’s companies to develop factory-automation technology to counter labor shortage. The government thereby fostered an intensely competitive domestic industry in robotics, which went on to dominate markets outside Japan. Expertise in the deployment of factory robots spread across multiple industries and contributed to a long-term upgrade in the general quality of Japanese manufacturing of automobiles, appliances and many other goods.

“Pressure from demanding and sophisticated buyers is widespread in Japanese consumer industries.”

Italy’s government has a history of putting bureaucratic roadblocks in the path of economic growth. As a result, business leaders in Italy are especially adept at working around obstacles to growth and profitability, rather than surrendering to them. In Sweden, the government imposed a system of “solidarity wages” that narrowed differences in compensation between the highest-paid and lowest-paid workers. The system kept Sweden’s average pay levels above those in many other states, and it prompted major cost overhauls at Swedish textile producers, shipbuilders and other large-payroll companies that were “faster and less painful” than such upheavals elsewhere.

Losing the Competitive Edge

Even imperfect national diamonds can help companies operating within them achieve international prominence. Select industries can prosper even if one of the determinants of national competitiveness is negative for their sector. But a nation’s economic disadvantages can accumulate until the country’s diamond goes dark – that is, until all four points are negative. Negative momentum across the full spectrum of national competitiveness is difficult to reverse, as Britain’s economic history shows. The United Kingdom lost significant economic vitality from the end of World War II through the 1980s, but decline in its national diamond began long before the war.

“Government policy must provide an environment in which any industry can prosper if firms are innovative and achieve high productivity.”

Education, which is usually an important element of labor force development, was one of the chief culprits. A study shows that workplace skills “lagged badly” in the United Kingdom, compared with other nations. The British educational system’s failures include de-emphasizing scientific curricula in universities and failing to give technical schools adequate support. Slow wage growth and poor market demand have done little to prepare UK-based industries to compete successfully in foreign markets. When buyers have high expectations, they push domestic companies to provide better value, which can make those firms more competitive abroad. But British consumers generally have refrained from demanding more from their companies; they are “more resigned to poor service or substandard quality” than consumers in other nations.

“Many see government as a helper or supporter of industry...Government’s proper role is as a pusher or challenger.”

The United States’ economic competitiveness has wavered without wilting. America has held onto its world-leading market share in aerospace, biotechnology, software publishing and other fields. But it has lost ground in industries that have gravitated to other nations, like the manufacture of autos, machine tools, computer chips and consumer electronic devices. Despite relatively high spending on education, “an extraordinary rate of functional illiteracy” exists in the US labor force.

“The Four Stages of National Competitive Development”

Each nation is in one of four stages in the advancement of its global competitiveness:

  1. “The factor-driven stage” – Low-cost labor, raw materials and other facets of production characterize this phase, where most developing nations operate. The economic advantage of cheap labor and materials can prove fleeting, and nations find it hard to sustain growth in labor productivity.
  2. “The investment-driven stage” – At this point, growing companies bid more money for labor, materials and other production factors. Industries benefit from increasing demand in the home market. Labor force skills become more diverse and sophisticated as educational institutions adjust to higher-order workplace requirements.
  3. “The innovation-driven stage” – In this phase, a nation has optimized its diamond. Collectively, the four determinants of national competitiveness encourage investment and ongoing invention, which is vital to the dynamic process of upgrading a nation’s economic advantages. In this creative stage, a growing number of industries enjoy “the full fruits of self-reinforcement” among the four points of the diamond.
  4. “The wealth-driven stage” – A country in this stage of its competitive development rests on its laurels, thus becoming less dominant in the world economy. Its diamond gets duller for multiple reasons, including reduced incentives to invest, increased corporate spending on acquisitions unrelated to core businesses, and decreased outlays on research and development. Companies tend to “harvest” their market positions rather than plow money into new and improved competitive advantages.

Policy Implications

The private sector bears most of the responsibility for upgrading a nation’s competitiveness, though government can make the process easier. Companies in the United States and United Kingdom, in particular, often fail to compete aggressively against foreign rivals. For instance, they don’t do enough to ensure a deep domestic pool of skilled workers, reliable suppliers and discerning customers.

“National economic prosperity is not a zero-sum game in which one nation’s gain is at the expense of others.”

Trade associations should do more to upgrade their industries’ competitive capabilities. Too often, trade groups lobby on behalf of vulnerable industries for protection from foreign competition, looser antitrust standards, guaranteed business with government procurement agencies and other legislative measures that erode competitiveness. Public policy alone is insufficient to ensure a country’s competitive advantage. Although global commerce has become increasingly borderless since World War II, government still influences national competitiveness. Government doesn’t determine competitiveness, but it does play a supportive role. Declines in trade barriers do not mask gaps in national competitiveness; they magnify them.

“Firms, not nations, compete in international markets.”

Giving certain industries direct government subsidies is an unreliable way to promote national competitiveness. Tax incentives are better for that purpose because they are contingent benefits that encourage a company to invest only if doing so produces a profit for them.

Government must recognize that the diamond is a system, so public policy affecting one point of it could influence others. The role for government is to encourage industries to upgrade their competitive advantages through investment, invention and improvement, and to avoid “the false allure of concentration, collaboration and protection.”

The Role of Chance

The four determinants of national competitive advantage and the role of government alone may not explain the rise of every successful industry. Luck also plays a part. Chance events – such as war, sudden increases in global demand or political decisions in foreign countries – “create discontinuities that allow shifts in competitive positions” and shift the position of the elements in the diamond. For example, the Korean wig industry prospered when America banned imports from China during the Cold War. How a country takes advantage of chance events depends on the strength of its existing diamond.

“Complacency and an inward focus often explain why nations lose competitive advantage.”

 

About the Author

Michael E. Porter is a professor at the Harvard Business School and the author of Competitive Strategy and Competitive Advantage. He served on President Ronald Reagan’s Commission on Industrial Competitiveness.

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The Competitive Advantage of Nations

Book The Competitive Advantage of Nations

Palgrave Macmillan,
First Edition:1990
 


15 January 2026

Hold On, You Lost Me!

Recommendation

Author Bernice McCarthy developed the “4MAT teaching model,” an innovative instructional method that leverages the latest neurological research about right-brain and left-brain thinking. The 4MAT approach allows people with different learning styles to absorb new subject material, retain the information and put it to practical use. McCarthy teams up with corporate trainer Jeanine O’Neill-Blackwell to explain how to use the 4MAT model. The title of their book is particularly apt because, alas, the lay reader can get lost. Perhaps in an effort to be authentically academic, the authors have burdened their text with jargon. It is filled with “mindmaps,” “hemisphericity divisions” and “stream of consciousness dumping,” as well as the probably unnecessary deconstruction of various English words into their Latin derivatives. However, with patience, BooksInShort believes that HR managers, course designers, trainers and teachers can unlock the genuinely useful insights offered by this guide to teaching and learning.

Take-Aways

  • Every student has a distinctly different learning style.
  • Teachers and trainers should adapt their lesson plans to this central fact.
  • The “4MAT teaching model” classifies students or trainees as “imaginative learners, analytical learners, common sense learners and dynamic learners.”
  • This model gives instructors good methods for engaging all their students, no matter what individual learning styles they have.
  • Instructors should stretch their personal teaching styles to accommodate the learning styles of all their students.
  • Depending on their individual learning styles, students primarily want to answer one of these four questions: “why, what, how, if.”
  • The “learning cycle” progresses through four basic phases: “engage, share, practice and perform.”
  • The 4MAT model is based on neurological research about right-brain and left-brain thinking.
  • The 4MAT approach allows students to apply their lessons to their real-life situations.
  • Instructors can apply the 4MAT model to teach almost anyone almost anything.

Summary

People Learn According to Their Own Styles

Everyone has a unique learning style. Why? People’s individual past experiences lead them to absorb and process information in their own ways. Some prefer classroom instruction. Others like hands-on training. Still others enjoy extensive discussions.

“Whether you design, train, or lead, the process the learner is engaged in is the same: learning.”

The learning process begins when people form perceptions, so the way they “perceive” new material defines their approach to learning. Some people immerse themselves completely in the sensations of a learning experience. Others bypass “feeling and sensing” and cut right to “thinking and judging.” These alternative learning styles contrast sharply. For example, a “senser/feeler” prefers to learn about an orange by looking at it, peeling it and tasting it. A “thinking/judging” learner would rather turn to a reliable information source, such as an encyclopedia, to read about the fruit.

“Our learning styles ease us into one kind of thinking and doing, and are obstacles to other kinds.”

The next step in learning is information processing. “Watchers” are learners who look over what they have learned and think about it. Other learners, called “doers,” prefer to take quick action using their new knowledge. Watchers take the time to process new information carefully. Doers get bored with reflection. They want to discover and plunge into some fast application of their new information. Classrooms generally include both watchers and doers. If you meld these learning styles – thinking or feeling with doing or watching – the result will be the “4MAT model,” that is, a teaching model directed to educating four primary kinds of learners:

  1. “Imaginative learners” – These “idea people” search for meaning. They listen and share concepts. They are innovative and prefer personal involvement. To keep these learners absorbed, instructors should make them work quickly, open up, share emotions and ideas, plan and experiment.
  2. “Analytic learners” – These fact finders value information and expert opinions. They deal well with abstract concepts that require careful thought and deliberation. Persuade them to tolerate change, be more instinctive, try new things and take a few risks.
  3. “Common sense learners” – These problem solvers test every theory and prefer hands-on experiences. They are turned off by vague ideas and concepts. They want to know how things function. To engage these learners, instructors should encourage them to discuss issues in detail, consider alternative outcomes and strive to be more creative.
  4. “Dynamic learners” – These proactive learners want to investigate all possible outcomes. They actively test information, are interested in applications and can arrive at correct conclusions without relying on logic. Help these learners become more reflective and strategic, and teach them to pay more attention to structure and systems.
“The focus, activities and techniques a trainer uses in the beginning, middle and end of a training session shift significantly in well-delivered training.”

Often, people combine different characteristics from these basic learning types. Naturally, trainers also fall into the same four basic, learning-style categories. As a trainer, your job is to engage your students, no matter what your personal learning style may be. This may require stretching your approach to learning so that it meshes with your students’ learning types.

“The Learning Cycle”

The most effective training fulfills a four-part cycle:

  1. “Engage” – Learners acknowledge and relate to new information.
  2. “Share” – Students contemplate what experts teach them.
  3. “Practice” – Their actions change in some way due to their new comprehension.
  4. “Perform” – Students apply the new information to their own circumstances.
“All of our knowledge has its origins in our perceptions.” [ – Leonardo da Vinci]

These four pedagogic experiences present four primary questions trainers should answer: “why, what, how and if.” Imaginative learners want to know, “Why is this information significant?” Analytic learners wonder, “What does the new information prove?” Common sense learners inquire, “How does the new information work?” And, dynamic learners pose the question, “If I use the information in my own special way, what will happen?” Mirror your students’ questions with similar ones of your own: “Why is it that my students should know about this topic?” “What do I specifically want to teach them?” “How will my students put what I show them to practical use?” “If my students practice what I have taught them, how will this help them grow?”

“The key to being an effective trainer is the ability to satisfy the needs of every learning type.”

Use the 4MAT approach for any educational purpose: to teach someone how to speak a language or ride a motorcycle, or even to handle a new position at work. The 4MAT model segments the educational experience for students so that they initially engage and share, and then practice and perform. Your teaching should address the needs of all four phases of the learning cycle. Your challenge is to help your students feel and think as well as watch and do. Of course, some students will prefer the “feeling” component; others will enjoy the “thinking” phase, while still others will be more enthusiastic about “watching” or “doing.” The trick is to cycle back and forth so that you keep them all engaged. Do not leave out any of the four kinds of activities. That would interfere with the efficient transfer of information.

“Seek out colleagues with different learning styles. Use each other’s strengths to improve your ability to design and deliver effective training.”

Use the right teaching method for each of the four different learning cycle components. For engagement, involve and motivate learners in discussions so they can link the subject material to their lives. One good way to handle this is to have small groups of students discuss the material among themselves. Use stories, exploration and dialogue for this purpose. Promote active listening and interaction among all your students. Imaginative learners prefer this activity above all others, as do imaginative trainers. To use engagement, for example, involve small groups of students in a “survival game.” Each group must decide which 10 of 20 available items they would take to a deserted island.

“When we learn, we move through all four parts of the learning process.”

To share the material you want to teach, use expert information and opinions, research data, formal lectures and similar instructional techniques. Ensure that all your information is concise and focused. Relate specific details to the big picture. This component should be well prepared and orderly. Your professional presentation of the material is vital to the students who are trying to absorb it. Analytic learners feel most comfortable with this phase of training, and analytic trainers excel in lecture situations. To use sharing, ask your class, “If you were setting up a company to compete directly with our firm, what would be your primary competitive concerns?”

“You must be clear about the knowledge and skills you want your learners to master before you begin to create your learning design.”

To get students to practice, have them bring new information to life through hands-on training, role-playing, case studies, demonstrations and experiments. Students should test new skills to master them. The instructor’s primary role during this phase is to observe and assist while the students actively take over the information and work with it in test situations that involve problem solving. Common sense learners are right at home with this kind of training. Common sense trainers are able to structure the practice phase in the most elegant, efficient fashion. To use practice, provide students with various scenarios regarding a performance evaluation, then ask them to role-play actually coaching employees.

“Designing great training is about defining outcomes and developing learning experiences that will deliver the outcome.”

Performing is the culmination of the process. Learners put information to work, thus assuming “ownership” of the knowledge. Your role as an instructor is to help your students integrate the information in some dynamic, beneficial way. Evaluate their efforts and cheer their achievements. By this stage, if you have done your work properly, you should be out of a job – at least with this group of students. Dynamic learners like this activity best of all, and dynamic trainers perform like stars in this kind of setting. To use performance in teaching, have students work together to create a story about a company that demonstrates its philosophy and values.

The Right-Brain and Left-Brain Origins of 4MAT

The 4MAT model is a straightforward, simple teaching approach. At the same time, it is sophisticated and up-to-date, because it is based on the latest advances in neurological research, particularly on scientific findings about the right and left hemispheres of the brain. The left mode operates in an analytical fashion. It is numerical, experiential and language-based. The right mode, on the other hand, is more metaphorical, deciphering meaning from images and patterns. The 4MAT model activates the brain’s left mode and then its right mode – swinging back and forth between “synthesis” (right brain) and “analysis” (left brain). These two different forms of thinking manifest in each of the four learning styles, to create this eight-step process:

  1. Engagement: Synthesis – Students make connections, learn from their experiences and become directly involved with the material.
  2. Engagement: Analysis – Students impart and explore ideas and perceptions regarding their experiences.
  3. Sharing: Synthesis – Students achieve a visual, conceptual understanding of an idea.
  4. Sharing: Analysis – Students make notes and observations that result in a wider understanding of an entire subject.
  5. Practicing: Analysis – Students carrying out individual activities to learn how to exercise new knowledge.
  6. Practicing: Synthesis – Students apply what they have learned to real-life situations.
  7. Performing: Analysis – Students evaluate and “refine” all that they have learned. They “take ownership” of their newfound knowledge.
  8. Performing: Synthesis – Students integrate learning into their lives.
“By creating experiences that emotionally connect, engage and challenge the learners, the trainer increases active engagement and, ultimately, retention.”

During the engage and share phases, the students receive information. During the practice and perform phases, they produce information, internalize new knowledge and make it something invaluable that they own. The 4MAT model incorporates several primary “brain concepts, including “perceptions and connections,” “reflections and actions, “language and images,” “big ideas and details,” and “ladders and networks,” the steps in building relationships.

Lesson Plans

Follow these four steps as you develop your 4MAT model lesson plans:

  1. “Define the learner outcomes” – Look ahead to the performance phase to determine how the students will demonstrate their mastery of new knowledge. Define what your instruction will specifically teach the students, what enhanced skills some of them will have gained and what impact this will have on their lives.
  2. “Mindmap the content” – Envision the course content broadly and in detail. Plan the books, “training modules” and other materials for the course, and figure out how everything will fit together. Understand how all the elements of teaching interrelate.
  3. “Determine the concept” – What is the one “big idea” that will make the information you teach your students relevant to their lives?
  4. “Complete the wheel” – Plan all of the necessary activities (lectures, graphic aids and videos) to deliver information to students in a meaningful way. The imagery you employ to show new information will affect students’ retention. Develop some practice activities (role-plays, worksheets) that demonstrate how well students understand the information. Help them connect emotionally and intellectually to the new material, so that they can process their fresh knowledge through storytelling, small group discussions and so on. Develop some reliable means students can use to assess how well they are retaining information. Provide opportunities for them to share information by developing and presenting and developing portfolios or projects.
“The coach’s role is to facilitate the process of identifying behaviors that are not delivering the intended outcomes.”

The 4MAT approach makes new knowledge eminently practicable and useful. You can move your students beyond being simply passive receptacles for new information. Instead, they can become active participants who adapt what they have learned so that it directly benefits their lives. That is what learning is all about.

About the Authors

Bernice McCarthy created the 4MAT teaching model used by organizations around the world to improve instruction and learning. Jeanine O’Neil-Blackwell is an expert in developing initiatives that help trainers become more effective.

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Hold On, You Lost Me!

Book Hold On, You Lost Me!

Use Learning Styles to Create Training that Sticks

ASTD Publications,
 



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