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influence people

Nudging explained

By Behavioural Science Insights

In this blog post, we will highlight the main concepts from the work of Nobel prize winner Richard Thaler as explained in his bestselling book ‘Nudge.’ We will explain what nudging is all about, how it related to behavioural economics and how you can use it to influence people and help them make better choices.

 

Nudging: what does it mean?

The term nudging seems to be popping up everywhere nowadays. People are being nudged, nudge units are set-up within governments, and nudging in marketing seems to pick up in popularity. But what is nudging all about? What does nudging mean? And from which underlying science does it derive? And especially how does it help people make better choices? Questions that will all be answered in this article. To make your reading life easier, we’ve divided the article into several subsections, which you can jump to easily:

Nudging Theory and Behavioural Economics
Making choices: Choice architecture
Making better and healthy choices
Recap

Nudging theory and behavioural economics

Nudging comes from the field of behavioural economics. Although behavioural economics is a science that is studied for almost forty years, it was the book ‘Nudge’ written by Richard H. Thaler and Cass R. Sunstein in 2008 that put nudging on the map. In Nudge, Thaler and Sunstein propose us a new take on decision making, one that takes our humanness and all the inconsistent decisions we make as a given.

nudging

Behavioural economists, as opposed to traditional economists, take human irrationality as a starting point. The basic assumptions of behavioural economics are that people are making choices with:

  • Limited rationality
  • Limited willpower
  • Bounded self-interest

Nudging: traditional economics vs. behavioural economics

Whereas traditional economics see people as rational beings, who make decisions and do cost/benefit analyses to make a choice that is always in their best interest not letting their emotions cloud their judgments, and always thinking about the future. Behavioural economists overthrow this, as it doesn’t fit the actual behaviour of people. You see people choose mortgages they shouldn’t be taking. You see people overspent on their credit cards. There are stock bubbles. Where’s the rationality in that? We are humans whose decisions are driven by cognitive bias and sub-conscious mental shortcuts, as we explain in this post on Daniel Kahneman whose research laid the foundation of all behavioural economics.

In the book ‘Nudge’ is also explained that being human, we all are susceptible to various biases that can lead us to blunder. Our mistakes make us poorer and less healthy; we often make bad decisions involving education, personal finance, health care, mortgages and credit cards, the family, and even the planet itself.

nudging

The main concept of the book is that if you know how people think, you can design choice environments that make it easier for people to choose what is best for themselves, their families, and their society. It’s all about choice architecture. An important concept that we’ll explain in the next paragraph.

But before we dive deeper into choice architecture, it’s good to know that there lies a very important concept underneath the nudging theory. A concept introduced in the book called Libertarian Paternalism.

  • Libertarian = An individual’s right to choose
  • Paternalism = Do what you can do to improve the welfare of people. Point people in the right direction.

The definition of a nudge

The idea is to apply the techniques of the psychology of decision making and behavioural economics to improve decisions without limited choices. Or easier put, help people make better choices for themselves without restricting their freedom of choice. But by nudging them. Which brings us to the definition of a nudge. As Thaler describes it himself:

A nudge is any small feature in the environment that attracts our attention and alters our behaviour.

You can nudge for good, or you can nudge for evil. Their book strongly focuses on the first, as the subtitle of their book states: improving decisions about health, wealth, and happiness. And we as a company take a positive take on behavioural psychology ourselves as we strongly live by our mission to unlock the power of behavioural psychology to nudge people into making positive choices in work, life, and play. But how do you achieve this goal? That’s what the next section is all about: how to help people make better and healthy choices.

Do you want to learn how to nudge behaviour?

Then the Fundamentals Course is perfect for you! You'll catch up on the latest behavioural science insights and will learn how to translate these into nudges that will trigger positive behaviours and help people make better decisions. We have created a brochure that explains all the ins and outs of the Fundamentals Course; feel free to download it here.

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Nudging is choice architecture

If you want to help people making better decisions, you can achieve this with better choice architecture. But what is a choice architecture? Anyone who designs the environment in which people make choices is a choice architect. There’s choice architecture all around you. Think about menus, curriculums, or store layouts that decide how you walk inside a store (you probably all have been in an Ikea once, there it’s obvious how choice architects have designed the way you cruise the Scandinavian furniture epicenter).

A choice architect makes choices about how to present information or an environment for you. Although nudging is all about maintaining people’s freedom of choice, choice architecture isn’t neutral. You can compare it to regular architecture; it’s not possible to design regular neutral architecture. Think about the design of the building you’re probably in right now: it’s not possible to have designed that building completely neutral. It had to have doors, stairs, etc.

Choice architecture is not neutral.

The same goes for choice architecture, it affects how people make choices, and you have to make a choice yourself on how you present a choice. Richard Thaler often refers to the example of cafeteria meal planning. They found out that the way food was presented to kids in a school cafeteria effected what they would eat for lunch. The first choice presented to them was the prevalent choice. Someone responsible for the cafeteria then has several options:

  • Put the healthy options first, to promote more healthy eating behaviour
  • Start with the unhealthy options, to make kids more fat (could be he/she has a chubby kid and wants other kids to gain weight too, to stop the bullying)
  • Go for the most profitable as first option, to make the finance director happy
  • Present the food randomly, which is also a choice (confusing, but a choice)

The point is: you always have to make a choice. Choice architecture is not neutral. But some designs are better than others. Why not do it in a way that makes people feel better? That’s what nudging is all about, and which is the theme of the book ‘Nudge’ to help people towards making better choices.

Nudging: making better and healthy choices

In the book ‘Nudge’ they explain six principles of good choice architecture that will help people make better and healthy choices:

Incentives
People make better decisions if you provide the right people with the right incentives. This goes beyond monetary and material incentives, but also includes psychological benefits (eg peace of mind).

Understand mappings
A warm plea is made for more disclosure to help people make better decisions. In the book referred to as RECAP: Record, Evaluate, and Compare Alternative Prices. Make it easier for customers to compare what they are truly paying for, and ensure that all hidden fees are exposed.

Defaults
Defaults what happens if we do nothing. Think about your screensaver. Even if you do nothing it will activate. Defaults are sticky, as inertia rules in all humans. We tend to stick to the automatic choice that’s made for us. We for example hardly ever change factory settings on our phone. In Nudge an example is given about joining a retirement savings plan. If the default is to join, most people do join. If you have to actively choose to join only 30% does so.

Give feedback
A good way to help humans improve their decision making is to provide feedback. A good example is the Ambient Orb as developed by Clive Thompson that helped people save energy. Electricity isn’t visible, the ambient orb gives feedback on how well you’re doing by changing colour. Another example of giving feedback is paint that is pink when you apply it, but turns white within an hour. People often paint white ceilings white again, and it’s hard to see if you missed a spot. By making the paint pink, it gives you immediate feedback on what is left to paint.

ambient orb

nudging ambient orb

 

nudging paint

Magic white paint

 

Expect error
Expect people to make mistakes and design for it. A very good example of libertarian paternalism that actually saves lives are the ‘look right’ signs in London streets. You can still watch the wrong way, but you’re directed to look the right way.

look right London

nudging look right

Structure complex choices
When there’s an overload on choice, people tend to find ways to simplify them and break them down. Good choice architecture will find ways to make this more evident for people. An example cited was the choice of paint. Instead of using words like “Roasted Sesame Seed” or “Kansas Grain,” consider arranging similar colour themes next to each other. This could help people to choose the right shades and hues.

Recap

You could recap the Nudge theory like this:

  1. Humans are imperfect we can use all the help we can get
  2. It’s possible to improve choices without restricting options
  3. Don’t use bans and mandates, just nudge.

If you want to hear Richard Thaler explain the basic concept of nudging himself, take a look at this video. It’s 18 minutes.

 

BONUS: free ebook 'How to Convince Someone who Believes the Exact Opposite?'

Especially for you we've created a free eBook 'How to Convince Someone who Believes the Exact Opposite?'. For you to keep at hand, so you can start using the insights from this blog post whenever you want—it is a little gift from us to you.

Download ebook

Go ahead, it’s completely free of charge!

How do you do. Our name is SUE.

Do you want to learn more?

Suppose you want to learn more about how influence works. In that case, you might want to consider joining our Behavioural Design Academy, our officially accredited educational institution that already trained 2500+ people from 45+ countries in applied Behavioural Design. Or book an in-company training or one-day workshop for your team. In our top-notch training, we teach the Behavioural Design Method© and the Influence Framework©. Two powerful tools to make behavioural change happen in practice.

You can also hire SUE to help you to bring an innovative perspective on your product, service, policy or marketing. In a Behavioural Design Sprint, we help you shape choice and desired behaviours using a mix of behavioural psychology and creativity.

You can download the Behavioural Design Fundamentals Course brochure, contact us here or subscribe to our Behavioural Design Digest. This is our weekly newsletter in which we deconstruct how influence works in work, life and society.

Or maybe, you’re just curious about SUE | Behavioural Design. Here’s where you can read our backstory.

sue behavioural design
02/11/2018

What is design thinking?

By Behavioural Science Insights

In this blog post, we will explain what design thinking is all about. Originating from the innovation arena, it has gained popularity in other business domains. Driven by the success of design thinking of radically focusing on the needs of the user. The how and why behind design thinking is explained in this article.

 

Design Thinking explained

Everybody seems to be design thinking nowadays or has at least have heard of the term. But what is design thinking? Why has it gained so much popularity? Is it something that can help you and your business become more successful? In this article, we will give a short design thinking masterclass. So, you’ll know what everybody is talking about. And you can see for yourself if you want to start implementing design thinking in your own company. We’ll explain how and lead you to some of the best resources on the internet. To make your life a bit easier, we’ve divided the article into several subsections. Which you can jump to by clicking on the following links:

A new approach to innovation and problem solving
Design thinking implementing the process
The steps in the design thinking process
Design thinking tools and videos
Recap

Design thinking: a new approach to innovation and problem solving.

Design thinking comes from the field of innovation and is a new approach, or process if you like, to solve problems taking the user as a focus point. The method has been described as far back as 1969 by Nobel laureate Herbert Simon. But it really made a lift when d.school of Stanford University came up with a five-step approach to design thinking. Which was given a boost by Tim Brown of IDEO, and explained in his bestselling book ‘Change by Design‘. In this article, we’ll describe their approach, as it is most commonly used nowadays, and very practical to implement yourself.

design thinking

Design thinking: It’s all about human understanding.

Design thinking revolves around a deep interest in developing a deep human understanding of the people for whom we’re designing products or services. It helps you question and enables you to resist to act upon (often wrong) assumptions. Design thinking is extremely useful in tackling problems that are ill-defined or complex. By re-framing the question in human-centric ways. Design thinking is so successful because it focuses on the needs of the user. Understanding culture and context through observation and qualitative research (storytelling) diagnosing the right problem.

Okay, that sounds nice and all. But why do we need this? To put things short, we all think in patterns. We all have ways we are used to doing things. Our habits, what we get taught in school, by our parents, and in the business place. Which is fine, as it helps us deal with everyday situations. We can rely on these patterns of thinking.

Design thinking: Protecting you against automatic behaviour

We need this automatic behaviour to survive. If we had to make every decision consciously. Or had to think about every behaviour rationally. Or had to learn to do everything from scratch over and over again our brains would crash. As we explained in our article about system 1 and 2 thinking of Kahneman. In short, we rely on doing every day – private and business – processes for the most part unconsciously. For example, when we get up in the morning, eat, brush our teeth, and get dressed. We don’t think about it; we do it how we are used to doing it.

There’s one downside to this patterned thinking. It makes it very difficult for us humans to challenge our assumptions of everyday knowledge. Especially when you’re expected to be a paid expert, it can be tough to start questioning your own experience . Also known as the expert fallacy or false authority. So, when we run into a problem that we haven’t faced before. Or that requires a new innovative solution, we often get stuck or come up with old answers that aren’t always the best.

Patterned thinking vs. innovative thinking

Often this difference between repetitive patterned thinking and innovative thinking (also commonly referred to as ‘out-of-the-box’ thinking’) is illustrated by the truck example. Have you heard of it? If not, let us tell you this story.

Some years ago, an incident occurred where a truck driver made a wrong judgment call and tried to pass under a low bridge. That turned out to be too low for his truck. His truck got so firmly lodged under the bridge, that the driver couldn’t manoeuvre the truck through it anymore. But also couldn’t reverse his vehicle. Which not only caused a problem for the truck, but also for the traffic that got stuck behind him. The story goes that the fire department, other truck drivers, road help, and other experts came over to negotiate how to tackle this problem.

Everyone was debating whether to dismantle parts of the truck or break down parts of the bridge. Each spoke of a solution which fitted within his or her respective level of expertise. And this went on for some time.

The story goes, a boy walked by, took a look a the truck and then said, “Why not just let the air out of the tires?”. Which took all specialists and experts by surprise, who were debating for hours trying to solve the problem.

 

design thinking truck

When the solution was tested, the truck was able to drive through quickly. The story symbolises the struggles we face where frequently the most obvious answers are the ones hardest to come by. Because of the thinking patterns we all have within. And it summarised what design thinking helps you realise: design thinking helps you to change the way you tackle problems. It encourages you to explore new alternatives. Creating options that didn’t exist before.

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Design thinking implementing the process

In this next part, we want to give you a concise design thinking masterclass. It will explain the principles of user-centred design. The first advantage and characteristic of design thinking is that it encourages us to take an integrative approach to develop new strategies or ideas. Whereas in a lot of ideation processes the research department passes on insights to strategic planners. Who in their turn pass their insights on to the creatives. And then the ideas are handed over to production to be made. Design thinking sees insight, ideation, and implementation as three overlapping ‘cycles’. You will also come across to these spaces being called ‘understand’, ‘concept’ and ‘develop’.

 

Design thinkers don’t follow these three cycles in a strictly linear way. You could pass through every cycle more than once. Could be you have an idea, but after prototyping your idea with real users, you come to learn they don’t understand it. Or didn’t do what you hoped them to do. Then you have to adapt your ideas. So, you go back to the drawing board.

 

Design thinkers build, test, and learn

We always like to say that strategy is nothing more than a hypothesis that you test, build, and learn. We are firm believers the best strategy is developed through ideation and prototyping. Sometimes the feedback you get in prototyping gives you such an extra insight into the consumer decision-making process. That you have to make a perception switch and come to a new understanding that will reshape your strategy. We like to call this process of including and being open to human psychology the concept of strategy development. As opposed to the more inside-out concept of strategic planning.

The task of a design thinker is to bring all phases together as one harmonious solution. The cool thing – we think – is when you have the design thinkers mindset you break through silos. Whereas the researchers, the creatives, and the strategic thinkers often work in different departments. Now you get to go through all cycles yourself with a multidisciplinary team. Which not only makes your work more interesting but especially makes sure a lot of valuable insights aren’t lost in the process of handing things over to the next department. Design thinking is an integrative approach that adds value and fun. And which is a springboard for innovative, smart thinking that puts humans first.

 

The steps in design thinking

Let’s dive a bit deeper into the stages of the design thinking process. There are five steps in total:

Empathy
The first step of the design thinking process is called empathy. You try to understand human psychology and try to find out why people make decisions. The goal is to gain an empathic understanding of the problem you are trying to solve. You could do this in several ways. One of the most reliable methods is observation. Watching what people do. Why this is a proven method is because a lot of what people do is sub-conscious. If you’d ask them, they wouldn’t be able you to give you a (correct) answer. But you could also consult experts, extreme users, or do qualitative research to gain a deeper personal understanding of people’s emotions, needs, desires and fears. Empathy is crucial to a human-centred design process as it allows to set aside your assumptions about the world or your target group. It is all about understanding behavioural psychology and identifying behavioural patterns.

Define
In this stage, you put together the information you gathered during the empathy stage. This is where you will analyse your observations and refine and focus the problem you are trying to solve based on what you found while empathizing with your user. We often tend to define the problem inside-out. For example: “We need to gain 5% more market share in gym subscriptions by the end of next year”. But the whole point of design thinking is that you start thinking outside-in. So, your problem definition should also be human-centred. For example: “We need to help people to build the healthy habit of coming to the gym so fewer people will quit”.

Ideate
This is the stage where you try to come up with as many as possible solutions to your problem. Several techniques have proven to be very useful like ‘brainwriting‘ or the ‘crazy eight‘. It is essential to get as many ideas or problem solutions as possible at the beginning of the ideation phase. Behavioural research done to research the effectiveness of teams have shown that individuals are best at coming up with as many diverse ideas as possible, whereas a group is best at picking the most promising ideas. A technique used for this is called dotmocracy. If you’re interested in unlocking more creative power from a group, you could read our post ‘3 techniques that will supercharge your team’s creativity“.

Prototype
Prototyping is all about learning. Your job is now the make some inexpensive, scaled down versions of your idea that can be shared and tested with the actual users. There are several ways to prototype. You can write value propositions on a page; you can make a first landing page, you can create a storyboard or sketches. This is an experimental phase, so it’s not about making the perfect prototype. It’s about making a prototype that will help you gather valuable user feedback.

Test
We go about the testing phase by doing qualitative interviews with our end users or potential target group we are trying to influence. Very important to remember to tell and not sell. You’re not at the stage of convincing someone yet; you are here to learn where your product, service, idea, etc. needs improvement. Which parts are unclear? What turns out to be the killer feature? All the test insights will be used to do an ideation round again to optimise the idea based on real user feedback.

 

Design thinking on steriods: Behavioural Design Thinking

When you combine the method of design thinking with behavioural science, you will get design thinking on steroids or Behavioural Design Thinking. Because a better understanding of human psychology you will get:

1) Better insights into why people do what they do;
2) Better ideas on where to look for solutions;
3) Better prototypes, because you will have a much sharper understanding of what specific behavioural outcome you’re designing for.

 

Would you like to apply Behavioural Design Thinking to a challenge?

Then a Behavioural Design Sprint might be perfect for you. We have created a brochure with all the details of the sprint. Please, feel free to contact us any time should you have any further questions. We are happy to help!

Download the brochure

Go ahead, there are no strings attached!

Design thinking tools and videos

There are a lot of tools and techniques to use to make every step of the design thinking process worthwhile. The masters of design thinking are the people of IDEO, and they did us all a massive favour by developing a design thinking toolkit that they’ve put online for all of us to use. Google has also put a great designsprintkit online. Just take a look in there, and see which tools you like.

One of the founders of IDEO, David Kelley, has given an hour long interview explaining his view on design thinking. You can watch it here:

IDEO has also made a series of videos explaining the mindsets design thinkers should have.

1. Iterate, iterate, iterate featuring Gaby Brink (1.16 min.)

2. Empathy (1.26 min.)

3. Creative Confidence featuring David Kelley (11.47 min.)

4. Embrace ambiguity featuring Patrice Martin (1.19 min.)

5. Learn from failure featuring Tim Brown.

 

 

6. Optimism featuring John Bielenburg (1.18 min.)

 

 

 

Recap

Design thinking is a process to come up with truly innovative ideas that are radically human-centred. The five-step approach of empathy, define, ideate, prototype and test help you to find solutions to problems with an outside-in view. Tapping into the consciousness and sub-conscious of your potential users. And helping you to validate your ideas before the money runs out.

BONUS: free ebook 'How to Convince Someone who Believes the Exact Opposite?'

Especially for you we've created a free eBook 'How to Convince Someone who Believes the Exact Opposite?'. For you to keep at hand, so you can have a first taste of the power of behavioural science —it is a little gift from us to you.

Download ebook

Go ahead, it’s completely free of charge!

How do you do. Our name is SUE.

Do you want to learn more?

Suppose you want to learn more about how influence works. In that case, you might want to consider joining our Behavioural Design Academy, our officially accredited educational institution that already trained 2500+ people from 45+ countries in applied Behavioural Design. Or book an in-company training or one-day workshop for your team. In our top-notch training, we teach the Behavioural Design Method© and the Influence Framework©. Two powerful tools to make behavioural change happen in practice.

You can also hire SUE to help you to bring an innovative perspective on your product, service, policy or marketing. In a Behavioural Design Sprint, we help you shape choice and desired behaviours using a mix of behavioural psychology and creativity.

You can download the Behavioural Design Fundamentals Course brochure, contact us here or subscribe to our Behavioural Design Digest. This is our weekly newsletter in which we deconstruct how influence works in work, life and society.

Or maybe, you’re just curious about SUE | Behavioural Design. Here’s where you can read our backstory.

sue behavioural design
07/12/2018