Holiday book reading list

As we head into the Christmas break, I thought it would be worthwhile to note some of the books I have found most helpful on behaviour and behavioural economics.  A word of warning though, once you read these books the Boxing Day sales will never seem the same.

Predictably Irrational: The Hidden Forces that Shape Our Decisions by Dan Ariely

The book that got me started in the field of behavioural economics. Dan has a talent for writing in an extremely accessible, entertaining way and throughout the book weaves illuminating examples of human irrationality.

Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home by Dan Ariely

Dan’s follow up to Predictably Irrational which looks at the opportunities behavioural economics creates.  Whilst a worthwhile read I found that Upside of Irrationality dealt with benefits quite broadly where I wanted to understand the application of principles specifically to the work issues I encounter. (I subsequently wrote my book 22 Minutes to a Better Business to close this gap.)

Switch: How to Change Things When Change is Hard by Dan and Chip Heath

One of the best change management books I have read and which will have you looking at your stakeholders in a completely different light…as elephants. Deals with the behavioural elements of change by encouraging us to appeal to both the rational and emotional being (and no, that doesn’t mean telling your stakeholder you love them…unless you want to).  If you are looking for new ways of influencing people, this book is very worthwhile.

Nudge: Improving Decisions About Health, Wealth and Happiness by Richard H Thaler and Cass R Sunstein

Shamefully I haven’t yet read this book but do keep up with the blog, and Nudge is widely regarded as the seminal work for breaking behavioural economics away from academia.

Habit: 95% of Behavior that Marketers Ignore by Neale Martin

A pet area of interest for me is how habits form and how you can break them.  If you are in sales, marketing or product development, an understanding of habits is an important element of your customer acquisition and retention plans and this little book is a very interesting read.

Have a great festive season and I look forward to more behavioural blogging in the new year.

Are you the next News of the World?

We are all susceptible to what has happened at News of the World, a UK newspaper that has been shut down on the back of alleged phone tapping.  We are susceptible because each of us is faced with moral, ethical and legal challenges through the course of our work lives, and these challenges are often so iterative, so imperceptible that little by little, the line falls behind us and we may not even realise.  Behavioural economics can help us understand a couple of the forces at play so that we can better withstand these challenges to our personal and professional integrity.

Self-herding

We tend to follow decisions we have made before because it is more efficient, so that if a situation arises that is similar to one we have previously encountered, we default to the road travelled.  The first time a compromised action is taken, it may have been discussed, agonized over and been made reluctantly. But we don’t cope well with cognitive dissonance – trying to hold conflicting views simultaneously – and we are therefore very good at justifying to ourselves the actions we’ve taken.  The seal has been broken and from this point on, we tend to follow our decisions again and again.  Aside from never crossing the line, what can you do to stop the self-herding cycle?  Two things.

First, you need a circuit breaker and this will often come from outside the work culture in which you are operating (after all, that’s where the behavior began).  A mentor, friend, confidante will help you by giving you fresh perspective on your situation and your options, one of which may very well being changing your employment circumstance. 

And second, take yourself back to the first time you made the decision. What were your choices and how do they compare to subsequent decisions?  We can easily fall into the trap of thinking situations are the same because we have a tendency to apply unconscious short-cuts and rules of thumb to fast track decision making, so by forcing our decision-making back to conscious deliberation we can interrupt self-herding.  

As for cognitive dissonance, recognise why you made the first decision and why it made you uncomfortable. Use the sick feeling in your stomach as mental fortitude to not take the action again.

Herding

Whereas self-herding tackles our propensity to replicate decisions we have taken, herding is about following the actions/decisions/values of others.  This is where the culture of an organisation can become absolutely toxic if morally ambiguous behavior is tolerated (let alone encouraged) within a business because more and more staff will be swayed to act in the same way.

What can you do if you want to change a toxic culture?  Get up to speed with the principles of change management. Chip and Dan Heath have written an excellent book, “Switch: How to Change When Change is Hard” which covers the need to appeal to both conscious and unconscious motivations within people to encourage change.  Outlining the penalties of inappropriate behavior (such as phone tapping) in a policy document, may appeal to the rational mind, but not prevent the behavior if it is otherwise condoned. When employees see for example that dubiously sourced articles are published, or that commission is paid on sales made in breach of policy, then those behaviours will continue and spread through the organisation.  The herd is a very powerful force to harness – your challenge is to ensure that the herd is pointing in the right direction for your business objectives.

Always remember that organisations do not cross the line, people do. Therefore understanding two key influencers of behaviour – our own prior decisions and those of the herd – is central to operating ethically, legally and morally, and ensuring we don’t become the latest news of the world.   

As always, if you have a business issue for which you would like a behavioural economics perspective, drop me an email at peoplepatterns@gmail.com. Until next week, happy herding.

Image from http://www.epltalk.com/wp-content/uploads/2011/07/news-of-the-world.jpg

Meet Kris Kringle, change management specialist

This year one of my colleagues (thank you Rachel) suggested a very clever tweak to the office Kris Kringle;   we were to buy a gift for our designated recipient as if they were 10 years old so that the gift would then be donated to a children's charity. We not only had fun imagining our colleagues as children (not a stretch for some), but chose our gifts knowing they were going to someone who would really value them.

This version of Kris Kringle reminded me of the change management principles outlined in Chip and Dan Heath's Switch: How to Change When Change is Hard, and here's why;

Script the Critical Moves by outlining specific behaviours
Our Kris Kringle instructions were very clear - "buy a gift under $20 for your colleague as if they were 10 years old" - much more effective than as abstract "buy something for a children's charity".   In change management, people need to know what they specifically need to do.  Paint the scene for them.

Find the Feeling to engage the heart
To get us into the Kris Kringle spirit, we brought in photos of ourselves as children. Aside from lots of laughter, this helped to inspire our choices of gift because we remembered what is was like being a child.  For change management, finding the feeling means capturing the heart as well as the mind, tapping into an emotional reason to be part of the process. 

Point to the Destination
We knew when we were buying our gifts for our colleagues that the ultimate recipient would be a real-life child, so we were able to make the purchase decision knowing our audience.  In change management, it's not good enough to focus on the detail of the change - it needs to be always in the context of where you need to end up.

Shrink the Change
If the task for me and my colleagues had been to solve the problem of disadvantaged children in our community, we would have been overwhelmed.  Instead the Mother Teresa principle came into play (ie  If I look at one, I will act) - in other words, we were simply asked to buy a gift on behalf of a colleague from which one disadvantaged child would benefit.  Not scary at all. In change management, chunking the change into small, manageable parts will ensure progress can be made.

All up, I must say that this was the best Kris Kringle experience I have ever had.  Did we think we were going through a change management exercise? No way. And this is the biggest lesson - processes we go through that feel like "Change " are actually ineffective change management experiences.  Done right, we should barely feel a thing.  It is possible, it takes work, but tools like Switch can make change absolutely worthwhile and extremely rewarding.