Much as we value reason and logic, we don’t always think logically. Sounds surprising? Ask Richard Thaler, winner of the 2017 Nobel Prize for Economics. His path-breaking work in behavioural economics shows how our small flaws and irrationalities affect our decision making, and how we can be ‘nudged’ to make certain choices.
What is a nudge? A small, subtle cue that makes it easier for us to think or act in a particular way. No strict must-dos. No penalties. It’s just a gentle push rooted in human psychology. Here are three insights and examples of how you can apply them to ‘nudge’ your colleagues and peers, if seeking a change in their behaviour:
Insight 1: We like status quo. Given our busy, complex lives, it’s easier for us to maintain the current condition than exert ourselves to change it.
Application: Set the choices you want people to make as the default option. If you want employees to save more, create a policy that automatically places a chunk of their salary in a savings scheme. Those who do not wish to participate will need to opt out. This nudge has helped millions of Britons save for retirement.
Insight 2: We are vulnerable to framing. The way messages, objects, and choices are presented, influences how we react to them.
Application: Want people to eat healthy? Don’t ban sweets and sugary goodies from the canteen. Instead, place the healthy food options at eye level, and send the high-calorie items to the back of the row. A simple move, it helped a school push its students to make better food choices. Another option: fix a calorie counter for each item and add a word of encouragement next to the low-cal dishes.
Insight 3: We are influenced by social proof. Messages with social proof help us benchmark our behaviour against others. By showing where we stand compared to those who follow the norm/ are doing better than us, we can be prompted to move in the desired direction.
Application: Get employees to sign-up for insurance schemes, fill a survey form, submit reimbursements claims, etc, by stating how many of their peers have already done it. For instance, say ‘187 employees have already submitted their reimbursement claims, we need you to join them’. This appeals to our need to belong or fit in with a group. Remember celebrity endorsements? They are an example of how brands nudge you by using social proof.
As professionals, we need to make many choices and decisions every day. Nudges can ease the burden of decision making and are an effective tool to bring about behaviour change, as long as it is ethical. Remember, nudging is not about eliminating the freedom of choice. It’s about preserving that freedom, while highlighting the preferred option. How will you nudge your team and towards what goals? Share your ideas with us.