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Tom de Bruyne

Real Artist ship - quote

How to design an innovation habit?

By | Organisational Design

The organizational habits that
produce innovation and growth

Real Artist ship - quote

Why are some companies more innovative than others? I want to argue that they have habits in place that produce more ideas and habits to get those ideas shipped. As Steve Jobs once famously said (paraphrasing William Gibson) : “Real artists ship”.

In this blogpost I want to explore this innovation habit, based on our 8 year experience with collaborating with teams.

The habits that kill innovation.

Dozens of books havebeen written about this subject, but from our own experiences on running behavioural design sprint, these were the most common habits that kill innovation:

  1. No research culture / a crisis of curiosity. The bigger a company get, the more out of touch it becomes with how real users think, feel and behave. Managers rely on abstract data, like market shares, sales volumes, etc. The more detached they become from the real customer, the less probable they will be able to spot exciting opportunities.
  2. No ideation culture / a crisis of imagination. Once an organisation outgrew its startup phase and entered its scale-up phase, the whole mindset of the organisation is focused on growing the business. Most businesses organise their process around building the existing product offering. Moreover, to achieve this growth mindset, a specialisation of roles is required. Everyone, from the product manager to marketing manager, digital manager, UX-er, and communication manager, is expected to perform on their specific domain. This results in a decreased capability of the organisation to think out-of-the-box and to think outside-in. Nearly always, the exciting opportunity for innovation transcends the boundaries of the specific discipline.
  3. No prototyping culture / a crisis of experimentation. The more an organisation specialises, the more we expect those specialists to know what they are doing. This expert fallacy is a well know organisational problem: Because we are expected to be experts, we are more inclined to act like experts. The more we think we know, the less alienated we become from discovering the truth. Not knowing is perceived as weakness in these companies while every successful startup knows that aggressive experimentation is the nr one secret ingredient to growth.
  4. Conflicting incentives / a crisis of management. The problem with innovation in most organisations is that everyone, including management, is hired to execute the strategy. Not only are they hired, but they’re also reviewed based on the execution of the strategy. When your promotion depends on hitting the targets, everything related to new ideas will be perceived as a distraction.
The net effect of these habits is total inertia. Even in the context of declining market share, missing targets and aggressive competition, all the forces in the organisation seem to pull people towards repeating the same strategies over and over again. The habit of keeping doing what we always do is just too strong.

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The habits that boost innovation

Innovation is not a goal as such. Innovation is always a function of growth. Some organisations are far better than others to spot opportunities, come up with ideas, test them and succeed in actually shipping them. Whether they improve the product, marketing, process or campaign, the value of new ideas is that they succeed in contributing to growth.

That’s why we need to study the innovative power of an organisation as a habit problem. Innovative companies have habits in place that trigger more curiosity, ideation, and experimentation. Continuous improvement is their default mode. We have facilitated sprints with many teams. Most of them don’t call themselves “innovation teams”. They’re product teams, or growth teams, or customer experience teams. The biggest challenge they all face is to improve their output to generate growth for the business. There are four team habits we came across that strongly correlated with the creative and innovative power of a team:

 

  1. A deep love-relationship with customer problems: Innovative teams are in love with the problem of the customer. They relentlessly talk to customers or observe them in the real world and try to spot opportunities for helping customer to overcome pains, break bad habits, take away barriers and achieve goals. They are always asking themselves the question: How might we help our customers to be more successful
  2. A fast process for generating ideas: Innovative teams have proper ideation sessions. They follow the core principles for group creativity (like brainwriting and dotmocracy) and treat every idea as an interesting hypothesis. In a well designed creative process, the individuals come up with as many ideas as possible and the group decides upon which ideas are worth experimenting.
  3. A process and tools in place to prototype and ship: Great teams have a maker-mentality. They always try to figure out ways to prototype their ideas and test them in the real world. This allows them to increase their learning curve and their success rate rapidly. An essential condition for allowing this to happen is to have an infrastructure that allows experimentation.
  4. A cultural shift that promotes, rewards and celebrates braveness. This is by far the most important habit. Very often, the problem is cultural. If the organisation is number-driven, then you’ll always end up with all kinds of triggers that incline people to believe that following the rules and reaching targets is what the organisation expects of them. However, if you want to create a culture of experimentation, then you’ll have to embrace failure, promote and rewards braveness. People need to experience that experimentation is being expected of them.

Incremental versus radical innovation

In the literature on innovation, quite often the distinction is made between radical and incremental innovation. Incremental innovation is the optimisation of the existing products and services, whereas disruptive innovation is the more radical ideas to transform the business.

To be honest: I think this distinction is a bit artificial. If you think about the innovation habits we described above, then they are about being radically customer-centred, about having a maker-mentality, and a culture of experimentation. Out of this habit, both incremental, as well as radical ideas can emerge. The only thing an organisation needs to have in place is a fund to invest in the rapid prototyping and testing of some of the more radical ideas.

 

What this means for innovation leadership

When approaching the problem of innovation in organisations from this perspective, I thinkthe role of an innovation leader in a company is to help to build the innovation habit. I don’t believe an innovation department – as the place where innovation is happening -isthe solution.

An innovation leader / or innovation tribe should be a group of people that facilitate and train teams to install the innovation habit. If new radical ideas come out of this process, they should be able to invest money in them to be able to hire a team to design, build, prototype and test the idea in the real world. If this experiment turned out to be successful, then it’s their job to convince the board to invest in the concept with ambition.

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Pitcture depicting the Kock Brothers

The behavioural design of the economy. On incentives and rewards

By | Citizen Behaviour, Government & Politics, Organisational Design

To get the rich and powerful to change their behaviour,
is the most wicked design problem of our time

Pitcture depicting the Kock Brothers

I have been thinking a lot lately about society’s inability to tackle the biggest challenges of our time. I don’t know about you but climate crisis, income inequality and radicalisation is scaring the hell out of me. We can’t seem to change the behaviour of those who are running the show. This is the most wicked problem of our time. I want to argue that the solution to change the course of history can be found in applying some Behavioural Design Thinking to this wicked problem.

The economy is a behavioural design

The best way to think about behavioural design is to think of it as the design of choices. The way you design a choice will largely determine the behaviour that follows from that choice. This simple and powerful first principle of Behavioral Designworks on all levels of human decision making, from small consumer decisions to big societal decisions. Let me illustrate this with a couple of examples:

  • If you want to sell an item, it matters a great deal if you give two or three options. You can change the value perception of a cake + coffee of € 5,- in comparison to a € 2,5 coffee instantly if you would introduce a decoy option of a € 4 cake in the middle. The introduction of the € 4 cake makes the € 5 coffee + cake suddenly look like a bargain.
  • You can change the value perpection of something if you don’t call it “cheap” but “great value for money”.
  • If you want to get a sales team to run like hamsters in a treadmill, introduce sales targets and continuously give them feedback on how they’re performing in comparison to their colleagues. With these simple interventions, you will have designed a choice system that triggers hyper-competitive game behaviour.

These applications of the lens of behavioural economics to human decision making is nothing new. What fascinates me is the idea that could also look at the economy through this lens. The economy is a behavioural design system that rewards particular behaviour with power and profits and punishes other behaviours with taxes and fines. If you want to transform the economy, you have to tweak the behavioural design in such a way that it rewards and incentives different behaviours.

(BTW: In this post we explore the concept of Behavioural Design in dept)

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It’s all about the incentives.

The problem with the current behavioural design of the economy is that it consistently rewards destructive behaviours, both with money, power and social status.

Society glorifies being rich and being powerful. To the extent that it rewards sociopaths like Donald Trump, Mark Zuckerberg, Jeff Bezos, Peter Thiel and Charles and David Koch (see picture above. BTW: David died this week) with power, prestige, admiration, etc.… The summit of social status in western capitalist society is “being rich”.

Society also rewards them with unlimited power to do whatever they want. Think about how Bezos played out communities against each other to fight for hosting the next HQ of Amazon. Amazon was offered 2.2 billions in tax cuts by the city of New York.

The third reward is financial. If you’re rich, you have access to all the tools to get even richer. The (capitalist) behavioural design of the economy offers unlimited financial rewards to people with capital. Every valuable thing in the marketplace is being sucked dry by the owners of capital. There’s so much cheap capital in the hands of investors that they can buy everything to help them to grow their wealth even further: They buy up houses in cities, they buy kindergartens, elderly homes, entertainment franchises, etc. They own more than 90% of all fortune 500 companies through the stock market, and instead of using profits to reinvest them in the companies, they use it to pay themselves high dividends.

This process is called the financialisation of the economy and explains why everything of value is rapidly becoming more expensive.

 

The solution: Change the incentives


If you want to understand the economy, understand incentives. If we’re going to change the economy, we’ll have to change the incentives. It’s as simple as that. If we want to fight inequality and climate catastrophe, we will need to change the social, financial and power rewards.

Governments and economist only tend to focus on tax incentives today, but I think we could have a far more significant impact if we work on the psychological rewards of social status and power.

We will need to challenge the social status of those who are destructing the planet and extracting wealth out of the economy. We will need to reward those with bold and brave ideas about the future with power.

A great example of this behavioural design change is the work that the Sunrise Movement in the US is currently doing. They are the movement that came up with the New Green Deal. They did a fantastic job of reframing the climate crisis story. Instead of talking about “saving the planet” and scaring the hell out of people, they turned climate action into a narrative about investing in wealth creation, job creation and the investment in thriving communities where kids have access to good education, clean water clean air and health care. That’s a story for which they’re getting bi-partisan support.

As a consequence, this broad support incentives politicians to embrace the New Green Deal, because it increases their chances of being elected. Meanwhile, they do a great job in glorifying business and community leaders who step up and take action and vilify those who are bringing the world on the verge of climate catastrophe.

Even the very rich are suckers for social status and recognition


In the end, no matter how rich we are, we all crave for recognition and social status. If we as a society succeed in taking those away from the current “heroes” of financial fame and instead reward the new heroes that bring society further through investing in a sustainable economy and a sustainable planet, we might succeed much faster in turning things around.  Saving the world is all about redesigning the incentives.

It’s as simple as that.

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Nassim Taleb's great thinking on hedging against group-think

The psychological price of being rational is being unlikeable

By | Organisational Design

Rational decision makers have to dare to
fight common sense and social norms.

Nassim Taleb's great thinking on hedging against group-think

This blogpost is about how being rational in organizations is actually pretty difficult. It comes at a high social cost. Because rational people need to defy groupthink, defy authority-based decision making and defy social pressure. That’s one of the reasons why innovation is so difficult to pursue.

When do you pull the Goalie?

Imagine you’re a coach of a hockey team. Your team is one goal behind and we’re approaching the end of the game. You know you need to take a gamble and change the goalie for a field player. Butthe question is when. When do you pull the goalie?

If you approach it rationally, the answer would be 5-10 minutes before the end of the game. That’s how you maximize the chance of making a difference. But no coach would dear to do this. Because if it goes wrong, everyone will blame the coach for the mad and unexpected move.

The example was told by Malcolm Gladwell in an episode of his podcast Revisionist History. It reminded me of another story, told by Nassim Taleb in the Black Swan. Before Taleb (see picture) turned philosopher, he used to work as a trader on Wall Street. His strategy was to bet against improbable events. He would take the money of his clients and he would put it all in insurance that would pay out in the case something unexpected happened, like a crisis. He knew the money would eventually pay out big time, he just never knew when the improbable “black swan” event would happen. But he just waited and did absolutely nothing.

It drove his managers and his clients mad. They expected him to work actively to make money for them. The idea that he would sit on his ass to wait for a crisis event to happen – which would pay out enormously – was just unbearable to them. It was a perfectly rational strategy, but Taleb had to develop a very thick skin in order to be able to stick to it.

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To be rational is to be unlikeable

The problem with acting rational is that it very often clashes with social norms. You will get much less problems for failing by following a strategy everyone else would follow, then you would if you followed an unexpected path, even though it makes sense from a rational point of view.

My partner Astrid decided to stop working at the office a couple of months ago. She realized that being at the office prevented her from doing the things she should be doing to create value for SUE. The constant distractions were killing for her productivity and her mood. So she started working at home. It took her three months to stop feeling guilty about it.

Warren Buffett and Charlie Munger, the smartest investors in the world, spend most of their time in the office on reading. They figured that investing most of their valuable time in understanding more about the world, would eventually pay off in smarter decisions. Berkshire Hattaway made 242 Billion Dollars of profit in 2017.  Unlike most investors, they buy companies with the intention to hold on to them forever. They are in the business for the long run.

Corporate culture doesn’t like the crazy ones

The problem with acting hyper-rational is that you need to be able to deal with social pressure. Very often, people will not like you for breaking the social norm. And when your choice leads to failure, they will find it very easy to blame you for your stubbornness. I think that’s one of the reasons why it’s so difficult for corporations to innovate. Innovation needs stubborn people who don’t mind the social pressure to conform to corporate norms. “Think Different”, probably the best commercial ever made, actually pays tribute to those people with the following legendary quote:

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

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How Norway nudges its citizen to drive electric

By | Citizen Behaviour, Government & Politics

The surprising story behind
Norways spectacular rise in EV’s

Did you know that in Norway more than 60% of all newly bought cars are electric? Here’s the surprising story of how they used smart Behavioural Design Thinking to fight climate change and achieve their aggressive CO2-zero ambitions. They came up with a couple of interventions that provide people with daily reminders of how awesome it is to drive electric.

Principle 1: Trigger selfish motives

The Norwegian Government doesn’t want to turn you into an eco-fanatic. Neither don’t try to convince you to make the transition because of the environment. They just make it much more attractive for you to drive electric. The brilliant part of their strategy is that they didn’t stop at your typical tax cuts – although they are enormous. They turned the benefit in something far more system 1: Electric cars get a free passage at the Toll Gates, get free parking in a lot of municipalities and get permission to drive on the bus lane. In other words: they get to experience the benefits every day.

This brings me to the second principle.

Principle 2: feedback

A driver of an electric car gets constant positive feedback on their behaviours. Every time they use the bus lane to skip traffic jam, or every time they pass a toll gate for free, they get a chance to look at all those combustine engine suckers. They get visual reminders on a daily basis of how stupid one must be to drive the old school way.

The opposite is also true: Every time you get stuck in a traffic jam, and you see a Tesla or an electric Kia legally using the bus lane to cut you off, you get a painful reminder that your not part of the priviledged class of the country.

Principle 3: Take away barriers

The big challenge is still to tackle “range anxiety”. More than often, people in Norway buy an electric car for their second car, with which they commute to work. For the long distances, they still don’t feel secure enough that they could travel comfortably without having to freak out about finding a re-charge station on time. Norway is investing rapidly in charging infrastructure. Ability is not a detail.

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What can we learn: Re-think incentives

First and foremost, we can’t compare apples with pears. Norway can issue this enormous tax cut because the country can afford it. The state – ironically – lives of the export of oil. Furthermore: they have – unlike most other countries – a heavy taxation in place on imported cars. A tax cut on the imported electric car quickly makes a significant financial difference.

But what we can learn is that there are far more clever strategies to get people to switch to electric driving. Instead of using the traditional taxation-stick, we could come up with benefits that have a much higher psychological value:

  1. Legalize autonomous-driving asap: Last week I saw a guy driving his Tesla while reading his newspaper. I realized I just saw the future. And it looked frikking cool.
  2. Give visual priviliges in traffic: To be allowed to cut traffic Jams by using the emergency lane, especially in a country like the Netherlands, will give you a guaranteed daily dopamine rush to the brain.
  3. Replace most parking spots in big cities like Amsterdam with parking spots that are exclusive for electric vehicles. Having to park your diesel on the outskirts of town, while having to take public transport to the city centre, meanwhile having to watch Electric Vehicle owners parking their car next to the canals for free: priceless.

The green revolution is coming.

We’re only using the wrong incentives to make it attractive.

Update: This post is the first in a series of a posts on how to use Behavioural Design thinking to tink about the climate crisis.

Want to learn more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure.

Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.

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Without influence your customer won't do what's needed for growth

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signaling

Signaling: How to add psychological value

By | All, Customer Behaviour, User Experience

What is the cheapest way to feel insanely rich? To me, it is having a high-tea in a five-star hotel. For about 50 to 60 euros you can get a taste of the service level that generally only the rich and famous have access to. Another way is to book an Economy Plus seat on an aeroplane. For just a tiny bit extra, you not only have a bit more comfort. You also are freed from the hassle to get on and off the plane. Your food gets served first. And in case of Easyjet, you get to experience the ritual of getting to board early. While the other mortals have to feel inferior behind a rope. Priceless.

How to feel rich the cheap way

But I am also feeling filthy rich for the last few years if the owner of restaurant ‘Oggi’ in the Binnenbantammerstraat Amsterdam – who by the way is Turkish, but does a brilliant Italian impersonation – comes up to me all the way from the kitchen to welcome me back. It’s a little gesture, but it makes a lasting impression on my Belgian relatives. It signals that I am an appreciated customer and not just an anonymous character in the big city. The Uber driver who simply asked me if I would enjoy listening to some music, and gave me a few mints, transformed the value perception of expensive public transport into a private chauffeur experience that was a mighty good deal.

By the way, there’s a great power in mints when you look at it from a human psychology point of view. Check out this post to see how mints can make a big difference in the amount of tips given. It explains the Cialdini persuasion principle of reciprocity.

 

Signaling: the power of adding psychological value

In behavioural economics, these examples are called signaling. Our system 1 – aka our automatic brain – is continuously picking up signals that seem trivial, but have an enormous impact on how we experience the value of things. The cheery Coolblue delivery boy on his bike looks like a little detail at first sight, but it undoubtedly one of the most active signals that show how committed Coolblue is to do ‘Everything for a smile’.

The other way around: How often did you hear you say to yourself you would never return to a store as one member of staff – maybe even without knowing it him or herself – has treated you with too little respect? A store can try its hardest to make sure everything is in perfect order, but if the behaviour of the people instore signal the opposite. It’s the end of the story.

Signaling power at organisations

I even experience the same when visiting clients. Both at De Volksbank and at ASR Insurances you are welcomed by hosts that genuinely make you feel very welcome. It causes you to feel good about the entire organisation right away. The organisation signals that you, as their visitor, are of importance to them. The hostesses at the main offices of Eneco are also sublime at this. As opposed to Group4, where you come in, you are asked to come up to security agents positioned behind a stronghold. No, the hostesses at Eneco accompany you to an espresso bar and give you a reception that even the CEO would appreciate.

No expensive design or elaborate change management program can match the power of psychological design choices.

 

Want to know more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure.

Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.

How to influence the perception of value?

By | Behavioural Science, Organisational Design, SUE Amsterdam & Behavioural Design Academy originals

In this blogpost I want to explore the concept of value. I want to argue that Behavioural Design is as much about influencing how people perceive and experience things, as it is about changing actual behaviour. The design of psychological value is in my opinion a great concept to think about how to change perception and experience.

Value is a critical concept in economics. Peter Drucker famously said: “The purpose of a business to create a customer”. And the only way to create a customer, is to make him appreciate the value of what the company is offering for a reasonable price. But what is value really? And are we good at calculating the value or something?

We are price clueless

Well, it turns out we’re terrible at understanding value. In the book Priceless, William Poundstone explains the concept of “Price Cluelessness”. Because we have no idea of what something should cost, our System 1 – or automatic brain – is always relying on shortcuts to figure out the value of something. If we see a nice pair of sunglasses in a Chanel store, we expect them to cost € 200. But in an H&M store, these € 200 sunglasses would never sell. Even worse: people would be outraged. The context determines how to decode the value.

We even take price as a clue

Our incompetence for understanding value gets even worse: We tend to look for the price itself to find a clue whether something must be valuable. Something is priced high; therefore it must be excellent, otherwise, they would never price it this high. Also, when we really want the high-priced item, we tend to look for explanations, to trick ourselves into believing it’s actually a bargain. Stella Artois once campaigned around this idea. You could buy a coupon to pay even more for your Stella, thereby underscoring its brand promise “reassuringly expensive”. What most people in Britain don’t know is that in Belgium, Stella Artois’ home country, Stella is just an ordinary beer.

Popularity as a shortcut for value

The fact that something is popular is also a classic “System 1”-shortcut for determining the value of something: Many people want this item, therefore it must be good. Popularity helps you to decide without having to think about that decision. This is probably one of the most critical roles of branding: You know you can’t miss with buying a Jack Daniels, because you know everybody knows Jack Daniels.

Psychological value

The examples above are classic behavioural psychology tricks on how to influence the perception of value. But that’s the easy part. It gets much more interesting when you approach value from a human-centred point of view. Human-centred designers take irrational humans as their point of departure, for which they design answers and solutions. And when you depart from humans, you ask yourself questions like ‘How might we help people to…’:

  • Achieve their goals and realize their dreams?
  • Build positive long-term habits?
  • Resist their impulses and temptation?
  • Look at reality in new ways to trigger positive action?
  • Feel appreciated and respected?
  • Take away pain or frustration in their current experience?

Behavioural Design is fascinated with humans, their dreams, their fears, their bad habits, frustrations and their desire for happiness. And if we can understand them and design solutions form them, we will create psychological value.

Psychological Innovation

Once you start looking at reality through the lens of psychological value, you can see it everywhere:

  • Mom in Balance makes it much easier to stick to your workout habit because you meet up every time with the same group of mums like you.
  • The value of your restaurant experience goes through the roof if the chef decides to have a drink at your table
  • The € 10 you pay extra to sit in one of the front rows in an Easyjet-flight is the cheapest possible way to feel subjectively richer than the majority of people.
  • Airbnb is selling you the feeling that you are experiencing the city like someone who lives there. That’s priceless.
  • Uber makes a taxi experience 100x less frustrating because you know exactly when your car will show up, you know how much the ride will cost and you don’t need to have a transaction with the driver.
  • Would you prefer to work at the helpdesk or at the customer success team? Both jobs are exactly the same, but the second one feels so much better

Once you start thinking about creating psychological value for humans, you try to come up with ideas to help them to overcome stress, anxiety, insecurity, bad habits. Or to help them to achieve their goals, dreams and aspirations and to experience joy, fun and surprise. The number of things you can do to innovate are endless.

When it comes to innovation, we’re too often looking in the wrong direction. We think it’s about technology, but it’s really about creating psychological value.

PS: Our Behavioral Design Method is a method to spot opportunities for psychological value. It’s a fast-paced highly-structured process to turn hypothesis into ideas and to prototype and test what works and why it works. You can learn the method in our Behavioural Design Academy or apply the method to solve a business challenge in a Behavioural Design Sprint.

Want to learn more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure. Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.

How Behavioural Science and Data Science should collaborate

By | All, Behavioural Science

Last week I had the honour to speak and lead a data science hackathon at the I-com conference in Malaga. I have never been surrounded by so many brilliant people in my life. What fascinated me was how much behavioural designers and data-scientist have in common, and yet, how little both disciplines know about each other, or even collaborate with each other.

Why I fell in love with Data Science

What data-scientists do is they look at data sets, look for patterns in that data and use that understanding to build a model that could predict behaviour. Their models predict things like: “What products will new mums buy more or less?” or “when will you watch what kind of content on which device?”, or “in which region can you stop distributing product catalogues, without hurting sales?”. I saw teams in the 24-hours hackathon come up with mindblowing predictions. And I felt really stupid for not understanding a single bit of how they build their models. But the thing is: I don’t need to because the computer simply calculates the predictive power of the model, so there’s no cheating or bullshitting possible. Fascinating stuff.

The blind spot of Data Science

There is, however, a very big limitation to this approach. And that’s the fact that we’re dealing with humans. It’s not because I can predict to a certain extent your future behaviour, based on data-analysis, that I wouldn’t be able to influence you to make different choices. After all, our choices are heavily influenced by how choices are being presented to us.

I can make you reconsider the choice of buying a camera, by letting you choose between three, instead of two models. If I present you with three models, you are far more likely to chose the middle one. And you wouldn’t have chosen it if I only had shown you two. If I play loud music in a restaurant, you will buy more unhealthy food. If I would prime you with images of Italy, you will buy more Italian food. If I add urgency and scarcity to buy the last items of a sales promotion, you will probably choose differently. The means for screwing up the behaviour that is predicted by the model are endless.

Meaning versus Reach

The challenge with the classic behavioural design method of interviewing and observation is that it’s very rich on meaning but poor on reach. And data science has exactly the opposite problem: the insights are scalable, but they are not rich in meaning. The fact that new mums buy much more housecare products, but buy far less mouthcare products , doesn’t explain why they do that. If you can understand why people do the things they do, you can easily figure out new ways to optimize your marketing.

How to collaborate?

The answer is simple: Design a creative process that leverages the best of both worlds. I would always follow these steps:
Let the whole team do interviews to develop a deeper understanding of how the target audience thinks, feels and behaves. This helps them to overcome their own biases, assumptions and prejudices and helps them to build interesting hypotheses.

Analyse the data you have with the hypothesis you’ve just formed. Try to figure out which hypothesis actually predict behaviour. But also: dare to go back: if you find interesting other patterns (e.g. non-parents buy way more deodorants than new parents), try to see if this insight could help you to revise your deep understanding of the drivers of the behaviour of your audience

Once you’ve developed a predictive model, based on qualitative and qualitative results, use Behavioral Design principles to come up with ideas for improvements of the customer journey
The fun part: Prototype, test and measure. Design experiments, measure results, improve your overall plan. Aggressive experimentation is what sets apart the truly innovative companies from the laggards.

This is such an interesting time to really make a measurable impact. But everyone’s struggling with the HOW-question: how to turn a deeper understanding of behaviour into business value. The creative method is the answer.

#justsaying 🙂
Have a great day,
Tom

Want to learn more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure.

Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.

A cliche image of coaching

Personal coaching is pointless: four reasons

By | All, Organisational Design, Self Improvement

The lie at the heart of the coaching and Leadership-Industry

I’m fully aware that I will probably get hate-mail for this. But I honestly think personal coaching is a gigantic waste of time and money. Personal coaching is based on the assumption that changing the individual will lead to a change in the behaviour of the group and will benefit the company. A multi-billion dollar leadership-industry even emerged around this assumption. “If only I would become a better leader, my company would grow and my team would flourish”.

I think this assumption is complete nonsense, because of these four reasons

1. There’s a very weak relationship between knowledge and habits.

Most smokers know smoking is bad for them. Most smokers know they should quit. But with every crave for relaxation or fighting boredom, they can’t help themselves and light up a cigarette.

The same goes for coaching. Learning a lot about yourself is one thing. Being able to break your automatic interaction patterns with your environment is a whole different subject. You and your environment can’t help but repeating the same patterns over and over again. And the moment you try to change, your environment will push back hard to get you in line with what they expect you to be.

2. Individuals are overrated when it comes to making a difference

Only collaborations create breakthrough innovations. The central storyline of Michael Lewis biography of Daniel Kahneman and Amos Tversky is how these two Isreali psychologists, basically re-wrote the rules of psychology through their collaboration. which had all the characteristics of a creative-intellectual love affair. They could never tell who initiated a breakthrough insight or idea. It was the creative-intellectual tango between both of them, that generated idea after idea. Interestingly, their intellectual productivity dried up, when they got separated in the eighties.

By the same standards: There would be no Steve Jobs, without Steve Wozniak or Johny Ive. No Warren Buffet without Charlie Munger. Even the archetype of the lone genius, Albert Einstein, turned out to rely heavily on the genie of his wife Mileva Maric. I think it was Aristotle who said: “knowledge is dialogue”. So instead of looking inside for “unlocking hidden truths about yourself”, find yourself a creative partner and start playing.

In his new book “Trillion Dollar Coach: The Leadership Playbook of Silicon Valley’s Bill Campbell”, Google’s former chairman and CEO Eric Schmidt brings a homage to Bill Campbell, who both coached the Apple and Google Board at the same moment. Bill was famous for coaching the team, not the individuals of the team. As Schmidt puts it:

“You hear all the day that “I need a mentor.” Well, by the way, you need a mentor and I need a mentor; mentors are great. That’s not what Bill was. Bill was a coach and more importantly, he was the best coach of teams ever. And why do you need a team? Because a company is not an individual, it’s a team of individuals who need coaching to achieve their objective”.

 

3. You are the average of the five people you hang around with.

This is what Tim Ferris would write, if he would be given the chance to write copy on a public billboard.

The answer to becoming a better person is by surrounding yourself in your daily life with people better than yourself in different ways. I’m not saying that you shouldn’t have a mentor. But I do think that most of your uncertainties, flaws, ego-problems, bad habits and lack of energy can be attributed to the simple fact that you’re not surrounded by enough people, who push you to become the best possible version of yourself.

4. Change is about behaviour

Most of our limitations are the effect of the ecosystem we’re part of. As entrepreneurs, there was a time we worked day and night and frustrated our team because we couldn’t let go. The only way to solve this problem was to step out of this ecosystem for a while. This forced everyone in our team to step up and it provided an amazing opportunity for personal growth, and this includes Astrid and I. What changed us was an intervention that liberated everyone from a pattern we got locked into. No personal coaching could have solved this problem.

 

The Behavioural Design of Personal Growth

How does this relate to Behavioural Design? At SUE we think of Behavioral Design as a set of methods and principles to change behaviour, through the design of interventions that nudge people’s choices in a desired way. The more we work on big themes like happiness, excitement, creativity, productivity, etc… the more we discover that you can’t search for those values within yourself. They are the effect of the behaviour you are nudged into.

By the same standard we think of professional growth as just another Behavioural Design Briefing. If you want to grow as a person, simply create a context in which you are triggered into behaviors that lead to growth. The best way to achieve this is to come up with interventions that force a group to give more feedback. to engage in continuous learning and to experiment aggressively. Our Behavioural Design Sprintis an example of how the design of the process forces the group into these positive behaviours.

Want to learn more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure.

Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.

mental models

Mental models: How to design for intelligent decision making?

By | All, Behavioural Science, Self Improvement

We want to talk about mental models. They are key for intelligent decisions making. We want to introduce you to one of our intellectual heroes. A man who turned 95 on January 1st of 2019. There’s a fair chance that you’ve never heard about him. But you definitely have heard about his 88 years old associate, Warren Buffett. The man we’re talking about is Charlie Munger.

Charlie Munger

Worldly Wisdom

Charlie Munger became a hero to many people who are interested in better decision-making with a famous lecture he gave in 1994 at USC business school. The talk was called “A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business”. You can’t find it on Youtube, but the transcript was published on the blog of startup Incubator Ycombinator and in the curious book “Poor Charlie’s Almanack, The Wit and Wisdom of Charles T. Munger“.

I want to urge you to read the transcript of the lecture. It’s one of the most exciting texts you will ever read. I re-read it at least three times per year. In this lecture on Worldly Wisdom, Charlie Munger argues that the reason why Munger and Buffett beat the market with their investments, for more than 60 years is that they have a different approach to decision making. Munger argues that if you want to make better decisions, you need to use more than one mental models to look a the problem. One of his famous quotes to make his point is the following:

“To a man with a hammer, every problem looks like a nail”.

He argues that most people in business, everyday life and investing approach problems from a single mental model. If you work in branding, everything looks like a branding problem, if you work in business consulting, everything sounds like a transformation problem. If you are an economist, everything looks like a market-problem.

Munger and Buffett pride themselves with locking themselves up most of the day, reading books. What they are looking for is elementary worldly wisdom.They are obsessed with learning interesting “mental models”. Mental models are concepts from all kinds of sciences that offer elegant explanations to the world. To quote Munger:

“What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form.

You’ve got to have models in your head. And you’ve got to array your experience—both vicarious and direct—on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life. You’ve got to hang experience on a latticework of models in your head”.

A list of mental models.

There’s a lot of renewed excitement for Munger’s idea of Mental Models. Shane Parish, host of the amazing podcast “The Knowledge Project” and author of Farnamstreet, the ultimate blog on better decision-making by learning from the smartest people in the world. Shane Parish is writing a book on the subject. He recently published a post called “Mental Models, the best way to make intelligent decisions (109 models explained)“. It’s a list of all the mental models that he is using in his daily life. A lot of these models are concepts from cognitive psychology and the science of influence.  BTW, Munger is also fascinated with how human decision-making works. If you understand how people think and why they do what they do, you can do a much better job at predicting and changing their behaviour.

Want to learn more:

  1. Here’s another great blogposts on Mental models (Thanks for sharing: Ed Borsboom)
  2. Start making a list of your favorite mental models in your todo-list. I use Wunderlist. I created a folder “Mental Models” and started the habit to post concepts I use a lot in my thinking. My most recent one is this: “You are the sum of the five people you hang around with”.
  3. Re-read your mental model list regularly. Once you use them to look at challenges or problems, they will always provide you with new ways of looking at the problem and its solutions.

Enjoy Munger while he’s still alive. 🙂
Kind regards,

Tom, Astrid and the SUE | Behavioural Design Team

PS: We had Munger’s mental models in mind when we designed the program of the Behavioural Design Acacademy master classes. Our program is designed to teach you some very powerful and easy to remember mental models for finding human insights and for coming up with smart interventions for behavioural change. #funfact.

Want to learn more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure.

Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.

A clusterfuck

How to live a meaningful life in a world that is spinning out of control?

By | All, Self Improvement

A slightly modified version of this blog was posted on our Behavioural Design Digest Newsletter (subscribe now). 

In this blog I want to share a couple of thoughts on how we can use a better understanding of human decision making to cope with the complicated challenges of our time. I want to make the case for living an anti-fragile life. It’s a bit of a provocative story, but it has a happy ending with some very practical guidelines on how live a great life. So please bear with me.

I’m not going to make silly predictions of what will be big next year. These forecasts are utterly pointless. On the one hand, because these forecasts are not meant to predict the future, but to show off the depth of expertise for the one who’s making them. On the other hand, because the future is becoming increasingly complex and complicated at an accelerating speed. Please allow me to zoom in on these two concepts.

Accelerating Complexity

The future is complex because of exponential technologies. Technological progress is now accelerating so fast that a lot of things that seemed impossible two years ago are already achieved. Just to give you a couple of recent examples that were featured in Peter Diamandis’ amazing newsletter on exponential technologies.

The speed with which radical technological changes are being introduced is so beyond the scope of what we can imagine, that I think it’s just pointless to think about which technology will grow incrementally in 2019.

Accelerating Complications

The second problem with forecasting is that the future is that we have to deal with accelerating complications. Stability is rapidly crumbling on a global scale. The failure of the radicalised free-market to create prosperity and wealth for the many, instead of the few, has set into motion accelerating public anger towards the leading elites. This resulted in a global rise in the demand for radical leaders. This accelerating demand for radical nationalistic leaders has created a critical threshold of leaders that make any coordinated attempt to fight the wicked problems of this time impossible. The Trumps, Putin’s, Orban’s, etc. of this world continuously need to signal their virility to their base. In the world of the alpha male leader, compromises are for pussies.

The big problem of this critical decade is that the demand for strong leadership is only understood by radical demagogues who seize the moment to offer the public what they need –  which is simple explanations and simple answers -, thereby making the complexity of both the problems and the solutions even further out of reach.

Meanwhile, the clock is ticking, An ecosystem collapse is taking place. The bottom of the food pyramid is crumbling. Populations of Insects, birds, bees are rapidly declining. Global warming is spinning out of control, creating rising sea levels and more draught, leading to more refugees, leading to more instability. It’s basically a clusterfuck running out of control.

Human irrationality is making things worse

So we have to deal with accelerating complexity and accelerating complications. To make matters worse: humans have all kinds of mental flaws that make it impossible for us to make rational decisions and judgements to solve these challenges. In an accelerating complex world, we just have to revert to simple shortcuts for decisionmaking to make sense of things. Elites feel more and more entitled to their wealth because they think they earned it. It’s not: It’s the system that decides who gets the opportunities and who’s not. The middle-class is more and more sold for the story that it’s the immigrants and the politicians are responsible for their declining wealth. It’s not: it’s global financial markets and the monopolistic multi-nationals. It’s not too far fetched to think of global capitalism as a virus that turned into cancer, whereby rogue cells are rapidly killing all the healthy cells that keep an organism alive. Local politicians are powerless.

Another bias is the presence bias: we are not able to see changes, because they are not changing our surroundings fast enough. We like to look at the future as a simple continuous line evolving from what we know from the presence and the past. The optimism bias is also related to this: We tend to think the future will be positive and problems will be solved in time.

I hate to say it, but let’s face it: It looks pretty grim, doesn’t it?

A happy ending

Am I a pessimist? No! Those of you who know me, know I’m a very lighthearted person. But I’m not stupid. And I’m not blind. I know we much rather prefer to turn our head away, but this is the – fascinating – time we’re living in. So we have to put our big boy and girls pants on and face things as they are.

In the context of little positive outlooks, how can you remain optimistic and positive? It definitely helps to be an atheist. The only point in life is to experience love, find passions and explore curiosity. If you are able to design your life around these three principles, then you’re going to live a happy life as long as you live. Because – in case you missed the meeting – we’re all going to die.

A second thing you can do is to practice anti-fragility.  I love the concept of anti-fragility as proposed by Nicolas Nassim Taleb. Anti-fragile systems increase in strength, because of stress, shocks, attacks or failures. The better we get in dealing with randomness, change, bad luck and errors, the stronger we will become. Being an entrepreneur creates a natural context for becoming anti-fragile: you’re always experimenting, tinkering and failing your way forward. Taleb also suggests staying out of debt as fast as you can.  And take a lot of small risks instead of significant risks. You can find more tips on how to live an anti-fragile life here.

I can’t predict what 2019 will look like. The only thing I can wish for is to be prepared for unexpected shocks in the system that follows from accelerating complexity and accelerating complications. And if these shocks won’t come in 2019, then my practicing in anti-fragility will have helped me to have a year as great as 2018. I wish you a lot of anti-fragility in 2019.

Enjoy the holidays!
Tom

Image courtesy: A great metaphor for a clusterfuck.