What business are you in?

If I asked you what business you are in, what would you say?  Consulting, retail, manufacture, accounting, health...Well you're wrong, kind of. You see I think you are in the business of behavioural change because everyday you are influencing people to do something.  Buy, sell, read, write, talk, type, click, swipe, walk, run, turn up.  Each of us everyday has the task of influencing others to move from one state to another, and that's why behavioural economics is such an opportunity; it's a playbook on what you need to do.


Lessons from the fitness industry
Let's take some guidance then from one of the most challenging behavioural changes that we can make - getting ourselves or others into shape. The difficulty has always been sustaining the change once initial enthusiasm has worn off, and this is due to the potency of the outcome (looking better, feeling better) not being as forceful as the immediate attraction of other choices (lazing on the couch, staying in bed or eating the wrong foods).  After all, you can experience the benefits of the chocolate now, but the benefits of not eating the chocolate are distant and ambiguous. 


Given this challenge it is therefore no surprise that a range of websites and Apps have been developed to help people sustain the behavioural change of a healthier lifestyle.

GymPact App

One that garnered a lot of attention last year was GymPact because it charges you if you don't follow through on your commitment.  The concept is that our desire to avoid a penalty will be enough to push us towards fronting up at the gym when we would otherwise have been able to talk ourselves out of it. The App is clever because it creates activities in the short term to keep us on track as we inch toward to longer term benefit.

Another site that works for any type of personal commitment is StickK. Here you are required to make public your commitment contract and even put money on the line that goes to a recipient of your choice if you fail.  

A more recent example is SlimKicker.  I first heard about the concept last year when it's creator got in touch to discuss how behavioural economics could be incorporated to help keep people motivated and accountable.  


According to SlimKicker developer Christine Chu, the site is designed to maintain motivation and emotional engagement by rewarding and reinforcing progress.

"I think the main problem with being healthy is motivation. It's an abstract, overwhelming goal. I think the best way to counter this is to turn it into winnable games and small victories.

 So... my app makes living healthy, and fitness into a RPG game, where users earn points, and "level up' as they accomplish their health goals.

Everytime they add something healthy like veggies to their diet, they earn points. Everytime they complete a workout, they earn points. As they achieve more and more, they'll level up and unlock badges, and discounts/coupons to  rewards like spas, health foods, etc."

A few of the clever elements of SlimKicker include;

• Levels - people move through different fitness levels, collecting points and rewards along the way which breaks the task of 'getting fit' down to goals that are attainable. (Overcoming behavioural short-term bias.)
• Progress -  Throughout each level the user can see how far they have come and have to go. (Using behavioural principle of completion to secure continuation once started.)
• Inspiration feed - a sense of community has been created through users sharing how they are feeling about their successes and slip ups. (Uses social norming to influence behaviour.)

By far my favourite part of SlimKicker is the Challenges section. You can sign up to participate in challenge (for instance, no snacks after dinner) and be rewarded with points upon completion.  What's great about this is that you can see at a glance "who's in" and how many others are giving the challenge a go.

SlimKicker's Challenge

There are some areas of SlimKicker that can be further improved, for instance showing how many points are needed to complete a level, clearly stating that the website is free to join and explaining
how the site is financially supported but I think they are doing a great job of tackling behavioural change.

Applications for your business
Getting people to exercise and eat healthier is really no different to the challenge of getting people to buy something today when the benefit is not immediate.  Examples include building a house, securing investors for your proposal, ordering something online where you have to await delivery, signing up for a course, contracting a consultant and paying insurance. You need to overcome the pain of now whilst keeping your customer's 'eye on the prize'.

• Make the benefit vivid:  Draw it, mock it up, make a model...do something that ensures the customer can see what they are working towards.
• Use milestones: stage the process so that your customer feels like things are progressing.  Think of it like FedEx parcel tracking where your customer can see how far the parcel has travelled and how far it has to go.
• Keep the connection: communicate with your customer throughout the process so they feel comfortable that things are progressing.  I ordered a new iPhone cover through a Kickstarter project in December last year for expected delivery in January. Today I received project update number 18 advising me where they were up to in production, so whilst it's a long time to wait, I have been taken on their journey throughout thanks to their frequent and transparent communications.

It's easy to think we are  simply in whatever business we spruik on our business card or website, but always remember we are behavioural change experts and it is up to us to support our customers going from one state to another.  What better guide than Behavioural Economics?


PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of top news from the behavioural sciences and other nuggets of goodness from me. Click here to sign-up.

PPS A short presentation I have put together on why every business should know about behavioural economics is available on this website and has been viewed over 1,200 times since being posted.

"From-To" image from http://www.rachel-levy.com/wp-includes/wp-content/uploads/From_To.jpg

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.

How your favourite colour can win over stakeholders

My favourite colour is blue.  If you has asked me what my favourite colour was when I was say, 4 years old, it's likely I would have said, ... "Because!".   Kids are pretty blunt and uncomplicated like that.  Cut to primary school and the same question will get a rationalised response. "Because it's red like a fire truck", or "Because princesses wear pink". 

From an early age, part of development is learning to rationalise and justify, to explain why you have the opinion you do.  Imagine if the answer to "what is your favourite colour?" was "Because I am guided by deep unconscious processes that I do not fully understand which make me spontaneously reply blue".  So much easier just to say "Because!"

Now to the business context.  Imagine you are trying to justify an investment but one of your stakeholders doesn't like what you're proposing.  Why? "Costs excessive, no funds available, risk to customer retention, incompatible with brand values...."  - all rational reasons that may be cited.  But really, why?  "Because!" Now that may be the real answer.  Whilst the rational reasons have been stated, there's a strong possibility that you are actually dealing with something a little deeper - the gut reaction which in this case has worked against your project.

That's the trick our minds play on us. Whilst the stakeholder might truly believe the rational objections to your idea, the main issue is more likely to be with their gut.

In his book Blink, Malcolm Gladwell introduces the concept of thin slicing - "the ability of our unconscious to find patterns in situations and behaviour based on very narrow slices of experience" (p 23); of recognising patterns and making snap judgments. At an early age, I made a snap judgment that blue was my favourite colour, and throughout my life I have stuck to that. In everyday language we're talking about "a gut feel".  Gladwell sets out to convince his readers of three things 1. that decisions made quickly can be every bit as good as decisions made cautiously and deliberately, 2. that when rapid cognition decisions go awry they do so for very specific reasons and 3. that snap decisions can be educated and controlled.

So back to your stakeholder who has made a snap judgment about your proposal.  Look at it from their perspective - what patterns may they have seen that has set them against proceeding?  Sure you can counter their rational concerns with facts and data, and you might even (begrudgingly) get the signature. But what's underneath the surface that might mean you have won over the head but not the heart?

Short of using techniques like the "5 why's" and metaphor elicitation (using visual imagery to draw out the unconscious), your best path is looking at change management tools to pitch your proposal to both the gut and rational levels.  A great read on the subject is Switch: How to Change When Change is Hard by Dan and Chip Heath.  In this book they use set out actions to 1. Direct the Rider (the rational brain), 2. Motivate the Elephant (the unconscious) and 3. Shape the Path. 

Rest assured there are ways to both unpick the unconscious motivations and guide them to your end - the hard part is taking the time to consider the thin slice, to answer the "Because!", and to make sure that you can convince your stakeholder's gut that it's the right decision.