Saturday, July 23, 2011

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.
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.
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 Until next week, happy herding.

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