Category

Citizen Behaviour

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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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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how to influence the ones at power

How to influence those in power?

By | All, Citizen Behaviour, Government & Politics

How do you influence those in power? Have you seen the talk that Observer journalist Carole Cadwalladr did at the official TED2019 conference last week? Her performance became a viral sensation because she did what nobody dared to do before. In a conference, sponsored by Google and Facebook and with their high-priests Mark Zuckerberg, Sherryl Sandberg, Sergei Brin, Larry Page and Twitter-CEO-turned-mindfulness-hipster Jack Dorsey in the room, she named and shamed them in front of their peers and the whole world. For how their platforms are undermining democracy, and for how they keep refusing to look that dirty truth in the eyes.

Carole Cadwalladr speaking at TED2019

Carole Cadwalladr speaking at TED2019 – click for video

Influence 1: Public shaming works

Of all the efforts to get these leaders to take action for the havoc their platforms are causing to society, this might be the most powerful one. It reminded me of my favourite quote by the American philosopher Richard Rorty:

“We resent the idea that we shall have to wait for the strong to turn their piggy little eyes to the suffering of the weak, slowly open their dried-up little hearts. We desperately hope there is something stronger and more powerful that will hurt the strong if they do not do these things.”

Rorty argued that the only way to change the behaviour of the ruling elites is to persuade them that it’s in their interest to do the right thing. The robber barons agreed to more human labour laws, only when it became clear that the alternative was a revolution.

Influence 2: We’re suckers for social status

We, humans, are total suckers for social recognition. We’re continually signalling our desired social status to others through our cars, the house we live in, our job titles, our relentless attempts to build and maintain our personal brand on social media, etcetera.

Being wealthy and successful is the highest form of social status you can achieve in Western Society.  The problem is not “success” as such, but the cultural narratives that surround success. One of those dominant narratives is that both success or failure is your achievement. (It’s not, it’s your social background that determines the number of opportunities you will get).

Another one is that the State is bureaucratic and corrupt and you should outsmart the State by paying as little taxes as possible. Being successful is all about out-smarting the State. However, everything that contributes to opportunities and success (the availability of talent, infrastructure, business partners) is being paid for by taxes.

Influence 3: Villify and glorify

Lot’s of people thought it was an absolute disgrace how fast the super-rich in France pledged more than 1 billion (!) Euro for the restoration of the Notre Dame Cathedral. If it’s that easy for them to give away, then why not give all that money to societal and environmental problems, that are in part being caused by their greed? Their behaviour is obscene, and we should remind them of their obscenity.

If you want them to do the right thing, turn them into heroes for doing the right thing. Let’s not do this by applauding them for their philanthropy schemes, but for contributing to the general well-being by paying their taxes. The real heroes of society are all the entrepreneurs who create jobs, contribute to building thriving communities, try to come up with new business ideas to tackle the environmental challenges, etc.

I hope Zuckerberg, Sandberg, Brin and Page opened their piggy little eyes last week at TED19. I hope they are gradually starting to realise that society doesn’t think of them as heroes anymore,  but as the crooks who crippled democracy, just because it made their billionaire shareholders even richer.

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 to create change by design

By | All, Citizen Behaviour, Health & Fitness, SUE Amsterdam & Behavioural Design Academy originals

It’s hard denying we as humankind are facing serious problems today, and things need to change. Global warming is happening as we speak, obesity is overtaking smoking as the number one cause of death.

And for most of us, it isn’t that we don’t care about these problems. Sometimes we care a great deal. Who wasn’t shocked after seeing Before the Flood, the stunning climate change documentary starring Leonardo DiCaprio? Who wasn’t moved by Jamie Oliver’s quest to start a Food Revolution knowing children didn’t even recognize real food like an ordinary tomato?

And even if you weren’t aware of these two specific examples: We all know some serious issues are going on.

It’s a framing game

But the interesting question is why don’t we act? Is it because the issues are too big to comprehend? Or do we feel too powerless to make a change? Might very well be, because they are, at least if you frame them as a problem for humankind or the world.

But if you look at global warming or obesity from a different frame, you come to realize they have one thing in common.

People.

You and me.

We eat sugar. We don’t go to the gym. We save time by buying processed foods in the supermarket. We drive cars. We take flights. We buy loads of packaging and forget to recycle. We love taking long showers and binge watch Netflix on the couch while eating crisps.

This way, you realize that the significant issues we’re facing in the world right now can be brought back to simple daily human behaviour. Things we can comprehend. Things which we could change.

So, why don’t we do it? Why don’t we cook with fresh fruit and vegetables? Why don’t we work out? Why don’t we go out and walk more often, for instance to the recycle container? The answer is simple: Because we don’t. It’s that plain simple. We can play the guilt trip or blame game for a much more extended period, but it isn’t relevant, and it surely doesn’t do us any good. Not us as people. Or us as humankind.

We’re all just irrational.

The only relevant question to ask ourselves is: How can we help people adjust this daily behaviour? How can we nudge people into making better choices on an everyday basis?

I believe the answer is behavioural design. If you want to change behaviour, you need to understand behaviour. You need to know how people make decisions. Why they do things and why they don’t. You need to understand human psychology.

Recent years the understanding of behavioural psychology has skyrocketed. We now know more about the human brain than ever before. To me, the biggest eye-opener was that we all are entirely irrational. Not just a little bit, but for the most part.

We all think we consciously make decisions, we all believe that we control our thinking. But in fact, most of our decisions are made through shortcuts – such as heuristics and biases – and have nothing to do with a rational or controlled thinking process. As one of the groundbreaking researchers in behavioural psychology Daniel Kahneman has put it:

We are very influenced by completely automatic things that we have no control over, and we don’t know we’re doing it.

That explains why the blame and guilt trip game isn’t beneficial. How can you be blamed or feel guilty if most of the time we’re just doing things automatically without even knowing we’re doing it? Dr. Kahneman says it even more prosaic:

We are blind to our blindness. We have very little idea of how little we know. We’re not designed to know how little we know.

To conclude behavioural psychology has given us powerful insights into the human mind.

Challenging a commonly accepted assumption

To me, a crucial part of solving the puzzle of making this world a better, healthier, happier place is the realization that behavioural psychology challenges a commonly accepted assumption that people who make poor decisions, made the conscious decision to do so. But science has shown us that’s not true.

Still, millions of euros are invested in campaigns to convince people to act differently, targeting their thinking capacity. That’s just money down the drain.

But what is the answer then? Understanding how the mind works is just one thing. But how do you translate scientific research into practice? How can it stop me from eating pizza? From buying sneakers for comfort instead of running? From buying plastic bottles instead of refilling my own? How can we apply science to daily life?

Behavioural design is the answer

I think a behavioural design is the only answer. I do realize design instantly opens up associations about the visual, about aesthetics. But if you look at design in a broader sense and if you take a closer look at what designers do, you see their job is to find new solutions to problems using creativity. And there are some fascinating things to learn from the way they work:

1. Just as behavioural psychologists, designers have always taken humans as a starting point. When designing a new chair, they want people to be able to sit on it. When designing a new fountain pen, they want people to be able to write correctly.

2. Just as a behavioural psychologist, designers do empirical testing. Designers have always used early testing with prototypes. They build scale models; they make paper cut dresses, they make beta releases. They watch how people interact, react or behave. And then measure, learn and adapt.

A lot is written about design thinking. Tim Brown, the CEO of IDEO – one of the leading innovation companies – has written a great book on the subject: Change by Design, if you want to get some more in-depth information.

Behavioural design is the symbioses between two things: behavioural psychology and design thinking.

To me, Behavioural Design is the symbioses between two things: behavioural psychology and design thinking. If you combine those two worlds, you’ll be able to come up with better products, with better ideas and better interventions that will help people make better decisions, as you take people and their irrational decision making into account when developing an idea.

Change will come

But to get back to us as humankind tackling the world’s problems, my belief is design thinking is indeed an answer. It will help you:

– See that obesity, and global warming are both behavioural problems on an individual level, making them comprehensive and tangible;

– Understand people most of the times aren’t unwilling, but unable to change their behaviour, making you realize you need ideas that enable them to make better decisions;

– Use design thinking to come up with ideas that influence people’s daily behaviour and get evidence-based results by testing them at an early stage;

– Experience that change will come

– The first step in finding wicked answers to wicked problems is reframing a question to a behavioural challenge.

 

Behavioural design teaches us that the first step in finding a great answer is reframing the question to a behavioural challenge. By doing this, you’ll automatically end up with people. You’ll end up with us. At you. And if all of us make a change on a daily basis, we make an impact. We can change the world. I am convinced.

Astrid

 

 

 


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Astrid is the founder of SUE Amsterdam and The Behavioural Design Academy. Our mission is to unlock the power of behavioural psychology to nudge people into making positive choices in work, life, and play.

In two days of high-end master classes, we train people in unlocking the powerful principles of behavioural psychology and teach them our Behavioural Design Method™ that translates this knowledge into actionable skills to influence personal behaviour or the behaviour of customers, employees, family members or the general public.

Cover image by welovecostarica.com under creative commons license.

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