Behavioural Science isn't so Scary

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The principle behind behavioural economics is beautifully simple. And it goes like this. As much as we would like to believe otherwise, we humans aren’t as rational as we think. And when we act irrationally, we tend to do so in patterns. Under the same circumstances, we’ll likely make the same unreasonable choices as everyone else.

So Maybelline tell us that 8/10 customers buy their lipstick, and it instantly becomes more attractive.  We’re more likely to believe in the ideas of the entrepreneur with the best looking slide deck — especially if those ideas are offered to us after lunch! Of course, we'll buy that laptop if Ashton Kutcher says we should. And the moment the thought of money enters our consciousness; we change our values. We become more selfish and willing to cheat.

These are just rules of thumb of course, and there are plenty of people who would behave differently. But everyone thinks they’re the exception, and statistically, they’re probably not.

And there we are. Behavioural economics – the science of using our hardwired irrationalities to influence our behaviour. Coming to an advertising board, government policy and sales pitch near you.

Why isn’t this used so much in Leadership and HR?

There have been some brilliant examples. Especially (and perhaps unsurprisingly) from Google. But I'd love to hear more if they're out there? 

Otherwise, who knows.  We’re in the business of changing behaviours after all, so why wouldn’t we want to ‘nudge’ employees towards the actions we want them to take. We also talk about big data — a lot. And this is exactly that — systematic, peer-reviewed decision science. Employees aren’t different to all the other humans on the planet. The numbers have been crunched, the results are in, but we’re not using the insights as much as we should.

It’s easy to see the principles as some sort of ad-man voodoo, but they’re firmly science and not magic. Even more so, they’ve been behind some of the most positive behavioural changes in recent years. Did you catch the policy change on organ donation in Wales late last year? 90% of people believed it was right to donate, but only 30% were signed up on the register. So rather than opt-in, you now have to opt out. Behavioural economics. And lives will be saved.

Whether we like it or not, HR and Leaders are — to use the lingo — choice architects. We influence behaviour. And although behavioural economics is no silver bullet or golden egg; it can make us better at what we do. 

There are many articles about what you can do to introduce behavioural economics into the workplace. I won't repeat them. One of the most comprehensive is from the smart people at Deloitte: http://dupress.com/articles/behavioral-science-improving-decision-making-in-the-workplace.

There are also lots of best-seller books that are tailored-made for accessibility, and written by the most respected academics in the field. Nudge by Thaler and Sunstein, Predictably Irrational by Dan Ariely, and the seminal Thinking Fast, Thinking Slow by Daniel Kahneman are the most famous. They're all great. And I guarantee you'll be hooked. 

What about that headline? 

I hope you haven't scrolled to get here! But yes, my attempt at intrigue...

At the age of 21, Daniel Kahneman was a recruiter in the Israeli Defense Force. One of his tasks was to evaluate the suitability of candidates for leadership roles, and in doing so, he discovered the unreliability of 'intuition' to predict future performance. He also discovered an irrational tendency for himself and his peers to believe otherwise. He later called this the 'illusion of validity'.  

He used these early experiences of bias to father this new discipline of psychology. In 2002 he was awarded the Nobel Prize for Economic Sciences. 

Recruiter. Nobel Prize Laureate.
How’s that for inspiration?