The value of this has been, in my experience, that the budgetary commitments are also much less. Should you hire a traditional management consultancy like McKinsey, for example, to address a problem they may spend hundreds of thousands of pounds developing a report of several hundred pages, that advocates one solution.
Hire a behavioural scientist and you will likely get a ten-page report with ten solutions that you can practically test to prove what works. Behavioural science solutions are as open to small businesses and start-ups as they are to large corporates – and can level the playing field.
McKinsey themselves even acknowledged this critical role in their 2019 review of behavioural science in the corporate world: “Creating an effective nudge unit requires much more than hiring a few experts who understand heuristics and statistics. It’s up to senior management to create the conditions for success by helping to focus the unit, situate it in the organization, celebrate its impact, and hold it to high ethical standards.”41
My interviews with leading behavioural practitioners confirmed they have found great value in an experimental approach – what I like to call ‘test-tube behaviours’.
David Perrott, an established South African practitioner, says an experimental approach actually fosters creativity, rather than the opposite: “Experimentation allows for more creativity, more counter-intuitiveness and innovative techniques, because it is viewed as a test. Because no one’s neck is on the line if it fails.”
In the following parts of the book, we will explore how an understanding of behavioural science, and applying test-tube behaviours, can lead to benefits in key areas of business, and how some leading businesses have effectively applied this knowledge.
Next we will see how removing this stigma of failure through a growth mindset, and an experimental approach to understanding the drivers of human behaviour, has driven the growth of the most successful global businesses in the 21st century. In addition, we will see how it is baked into the culture of these organisations.
28 www.theguardian.com/public-leaders-network/small-business-blog/2014/feb/03/nudge-unit-quiet-revolution-evidence
29 Halpern hypothesised that this is due to large taxpaying businesses viewing themselves as unique, and so what other people do (the essence of social proof) was viewed as irrelevant.
30 Explained overleaf.
31 This is agreed by international treaty.
32 Data from the Bureau of Aircraft Accidents Archives (B3A), a non-government organisation based in Geneva. Worth noting also that the volume of air traffic (i.e. the number of people carried by air) has increased over that period from 331m annually, to nearly 4bn (International Civil Aviation Organization, Civil Aviation Statistics of the World and ICAO staff estimates).
33 Now GoBeyond Partners.
34 In line with Thaler and Sunstein’s objective of going with the grain of behaviour, there is a win-win situation here in that no one likes spending more time on the phone to the bank than necessary, so successfully achieving the objective of the call more quickly benefits both parties. Call duration inversely correlated to customer satisfaction.
35 See the description of availability bias on page 14.
36 This uses the concept of self-efficacy, the behavioural bias that our own belief in our ability to achieve an outcome affects the likelihood of that outcome, to make the customer more likely to successfully complete security.
37 The effect was actually greater in relative terms as the rest of the call centre experienced an increase in call duration over the course of the pilot, for various operational reasons.
38 On Twitter, when asked to give his most important advice to PhD students.
39 Also, in the interests of full disclosure, my former boss.
40 behavioralscientist.org/it-isnt-a-replication-crisis-its-a-replication-opportunity
41 ‘Lessons from the front line of corporate nudging’, McKinsey Quarterly, January 2019.
Chapter 4: How to Create a Behavioural Business
What to Do Now
In this part, we have seen how behavioural science demonstrates that:
much of human decision-making is more emotional, less rational, and more instinctive than we assume;
as a consequence, much of our behaviour is heavily influenced by context and our innate biases and heuristics;
changing that context (the choice architecture) even in very small ways can have a significant impact on behaviour;
a scientific, evidence-based approach to applying behavioural science has helped governments address a number of important issues, such as smoking;
to determine the most effective ways to change behaviour, it is important to test, in as close to the real-world context as possible, and collect data on actual (not claimed) behaviour;
to effectively do this in business requires a growth mindset, i.e. recognising that we can learn as much from failure as from success;
for businesses, doing this has been proven to generate marginal gains (in terms of both efficiency and effectiveness) and achieve competitive advantage.
Consequently, there are a number of things you can do to make effective use of the science to become a behavioural business:
ensure you understand that people are most often in Homer mode, i.e. will not think unless they have to, and so create processes, systems, products and services that make it easy to achieve a desired behaviour;
focus on collecting data on actual, not claimed, behaviour based on the desired outcomes;
make hypotheses based on data and create infrastructure to conduct experiments to verify them, i.e. science the shit out of problems;
encourage test-tube behaviours – promote continuous
