As you know, getting people to change their behaviour is a big challenge. Nudging can be a great way – through the use of small interventions, clever prompts or little incentives – to encourage people to make better decisions. Developed and popularised by Professor Richard Thaler, who won the Nobel Prize for Economics last year, this method is based on the insight that people aren’t always rational (Do get a copy of the book, Nudge, that he has co-authored with Cass Sunstein). Despite having all the relevant information, they still make the wrong decision – even if it affects them or others negatively. The fact is, bad choices are often easier than good ones.
To overcome this automatic tendency to choose wrongly, the nudge theory suggests introducing small cues or changes in the environment to support decision-making. In other words, you can “nudge” people towards making better choices.
So, drawing from this, my message this focuses on how you can use nudge theory to create positive behaviour change.
Here’s a great example of successful nudging, highlighted by Ben Chu in an article, What is ‘nudge theory’ and why should we care? Explaining Richard Thaler’s Nobel economics prize-winning concept, in the Independent. A few years ago, the pension savings rates among private sector employees in the UK were alarmingly low. To tackle this issue, the government switched from an “opt-in” approach to an “opt-out” approach. Previously, employees had to go and sign up for the pension scheme at their workplace; now, they’re automatically enrolled into the company’s pension scheme, with the option of cancelling membership.
This change was based on the understanding that most people wanted to set aside money for retirement – but kept putting it off because they felt the signup process would be complicated and time consuming. Automatic enrolment made it easier for them to do what they truly wanted. After the new policy was introduced in 2012, active membership in private sector pension schemes rose from 2.7 million to 7.7 million.
Compared with sweeping rules or outright prohibitions, nudging is met with less resistance and anxiety. This is because it doesn’t take away freedom of choice (remember, people can still opt out of the pension scheme if they like) and is typically about small, incremental changes.
Here are a few ways in which you can use nudge theory to encourage people to make better decisions at the workplace:
1. Rearrange the choice architecture
Nudge theory puts a huge emphasis on the environment in which decisions are made. You can facilitate positive behaviours by making smarter choices more prominent and accessible. Let’s say an organisation wants employees to purchase healthier snacks from the cafeteria – without resorting to a ban on junk food. One way to “nudge” them is to change the way the items are displayed: place nutritious snacks at eye level, and unhealthy options on the bottom shelves. This makes it easier for employees to notice and pick wholesome foods.
Tweaking the actual environment is more effective than simply delivering information on the importance of nutrition and the health risks of poor eating habits. Even with all those facts, many people still go for chips instead of salad – out of habit, because it’s easier, or because they simply don’t have the time and bandwidth to rationally think about the decision. Rearranging the choice architecture subtly guides them towards better options.
Think about the physical surroundings of your workplace. Is there a way in which they can be adjusted to bring about a desirable change? For example, to motivate people to spend a few minutes in a tranquil environment when they first arrive at the office, consider creating a “quiet zone” near the entrance. To encourage team members to get to know each other better, rearrange seating in common areas into pairs or threes and eliminate solo chairs.
2. Offer social proof
The UK’s Behavioural Insights Team (popularly known as the Nudge Unit, created with the help of Professor Thaler) found that charitable donations increased dramatically if people were told who else in their peer group (for example, Facebook friends) was also giving money to good causes. We like to do what people in our social and professional circles are doing – and this desire can be a powerful motivator.
You, too, can use social proof for workplace nudging. Let’s say there’s an important training programme you want everyone to complete. Most team members have done so upon your request, but a few still remain. Instead of forcing compliance, you could inform the stragglers that 90 percent of the team has successfully completed the training programme – would they like to do so as well? This is likely to prove more effective than orders or threats.
3. Tweak the default
As in the UK pension scheme example above, changing the default setting can be a great way to bring about behaviour change. The fact is, most people simply stick with the automatic arrangement – it’s too much trouble to change it. Just think of your own smartphone or laptop. How many of its default settings have you changed? And how many remain the same?
By ensuring a beneficial default setting, you remove the time- and effort-related barriers to making better decisions. Here’s a simple example: in the standard meeting template or software used at the office, what is the default meeting duration? Let’s assume it’s one hour. If you’re aiming for short and efficient meetings, this is a real barrier. Even if the discussion requires just 20 minutes, the person scheduling the meeting will usually choose the pre-existing one-hour slot – anything less than that will feel “too short”. But, if you change the default duration to 30 minutes, meetings will automatically become briefer.
4. Employ digital nudges
To create behavioural change quickly and at scale, digital technologies can be handy. Think text/WhatsApp messages, emails, apps and even gamification that gently motivate employees to take positive actions. A successful digital nudge focuses on a specific behaviour, arrives at the right time, and is tailored to a certain context.
A good example comes from a consulting firm that was keen to limit e-communication outside of business hours. Whenever someone tried to send an email after the end of the workday, they were greeted with a little pop-up window: “You are trying to send an email outside normal office hours. Send now, or defer until next business day?” This nudge was delivered at exactly the right moment, making it easy for employees to postpone the email. Even something as simple as sending a timely appreciation text when team members do something you’re trying to encourage (go the extra mile for a colleague, resolve conflict, etc.) works wonderfully.
5. Reinforce a change programme
In an article published by BCG, The Persuasive Power of the Digital Nudge, the authors highlight the relevance of digital nudges at an organisational level:
Digital nudges can be an effective part of an organization’s broader change programs, as all organizational change is built on getting people to consistently act or react in a different way, even when no one is watching. Organizations can use digital nudges to adapt to changing economic conditions, new technologies, globalization, and competition.
They explain that nudges can act as valuable reinforcements along specific steps of a change management programme:
- Making a plan public
- Spreading the word
- Holding people accountable
- Offering meaningful incentives
At a major multinational energy company, the change management team used a WhatsApp group to encourage executives to practice the training they had received. Participants would set weekly goals, receive reminders to check in, and post updates on progress. The digital nudges were ongoing, tied to a specific context (i.e. the learnings from the training programme), and drew on the power of social proof – all these factors added up to an extremely successful initiative.
One very effective way in which we have used this at Godrej, is the Godrej HIT Track the Bite campaign, which we partnered with Apollo Hospitals on. Through this, our team has created India’s first online platelet donor community for Dengue patients. This involved a significant behaviour change drive: to get more people to become aware of the need to become donors, and then sign up to do so, the team ran a multi-touchpoint communication campaign, drawing from nudge theory. This involved on-ground activations, social media, displays and videos at the most relevant intervention points to nudge people to sign up. A big focus was the youth, coming from the insight that the largest number of blood donors at hospitals are college students and under 30. They signed up over 1,00,000 target donors in less than 100 days, and the campaign itself registered impressive engagement rates.
When it comes to facilitating better decisions, remember Professor Thaler’s motto: “make it easy”. Remove the barriers that stand in the way of people making smarter, more beneficial choices – from little tweaks like redesigning and simplifying forms/paperwork, to comprehensive initiatives such as deploying a set of digital nudges to support ongoing behaviour transformation.
As always, I look forward to your thoughts.
Very well written article… Especially liked the ‘Tweak the Default’ part.
This is a very simple but very effective guideline for leadership behaviour.
This is a very simple but very effective guideline for all leaders.