Tag

irrationality

When Accountants rule the country

When accountants rule the country – irrationality and politics

By All, Citizen Behaviour

The dangerous economic myths
underlying political decision-making

When Accountants rule the country

Picture by Neil Moralee, shared under a Creative Common license

This is going to be a slightly longer post than usual. I want to share a couple of thoughts on a subject that fascinates me: irrationality in governing. I want to argue that billions of Euro’s are being spent by governments, based on bad economic ideas. These ideas are very pervasive, because they provide politicians with the illusion that they’re working very hard. But in reality, they’re making things worse.

How do you want your tax money to be spent?

As a tax-payer, you want to assume that your government uses its tax-income to make smart, rational decisions. You would like political debates to be about which investments would yield the highest societal return. Should we invest more in education? In infrastructure? In the military? Should we invest more in stimulating entrepreneurs to develop thriving businesses that generate jobs? Or should we focus more on redistributing wealth to encourage the poorest to get out of poverty? Should we accelerate spending in green energy, or is it better to remain addicted to burning cheap fossil fuels?

Spending billions based on irrationality

Your average Western government has to make a yearly decision on how to spend billions of Euros, Pounds or Dollars. So you want that decision to be based on evidence and facts. You don’t want it to be based on irrationality. 

The problem is: this is how governments think. 

In the book “Money and Government: The past and future of economics“, History Professor – and Keynes biographer – Robert Skidelsky argues very eloquently that governments worldwide use bad economics to make big decisions on government spending. And some problematic myths form the foundation of these lousy decisions.

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Myth 1: Whenever possible, leave things to the market. 

The underlying idea is that governments are not productive and bureaucratic, whereas markets tend to create increasingly better service for less money. This cliche is very pervasive and very wrong. Mariana Mazzucato demonstrates in “The Entrepreneurial State” that every piece of innovation that sits within an iPhone has been funded and developed with governmental funding. And vice versa: Markets have a deep tendency towards monopolies, profit maximization and obsession with shareholder value. This market tendency becomes problematic when it concerns critical services like health care and public transport. 

Myth 2: Governments need to be prudent with money

Our Dutch government loves to compliment itself with having one of the best budgets in the world. Our national debt is rapidly decreasing due to the disciplined cost-cutting efforts of our government. Every European government decided that the best answer to the financial crisis was austerity. Sounds reasonable. If you’re in debt, you have to stop spending and start paying back. But ‘reasonable’ is not the same as ‘rational’. The rational thing to do to prevent the economy from further contracting, as many economists have argued, is precisely the opposite: increase spending. Economies are not the same as households. The reason why this myth is so powerful is that there’s a lot of signalling power in it: Being strict on the budget allows politicians to signal that they are working hard and responsible. 

Two fascinating stories illustrate the point how wrong this myth is: 

  • Belgium suffered far less from the financial crisis than other Western-European countries. The Reason: They weren’t able to form a government for more than 1,5 year – rewarded with a Guinness World Record mention – so they didn’t have the opportunity to make stupid decisions.
  • Portugal, one of the worst economies in Europe defied the European Austerity-doctrine and started investing in wages, pensions and work. To everyone’s surprise, it quickly became one of the best-performing economies in Europe. Read this background article: “No Alternative to Austerity? That lie has now been nailed“.

Myth 3: There’s no magic money tree (spoiler: there is)

In an excellent essay on Robert Skidelsky, David Graeben shares a shocking statistic: Almost 85% of all Members of Parliament in the UK has no clue about how money is created. And yet they have to decide upon billions, even trillions of Pounds/Euros/Dollars. He writes:

 “There is no magic money tree,” as Theresa May put it during the snap election of 2017—virtually the only memorable line from one of the most lackluster campaigns in British history. The phrase has been repeated endlessly in the media, whenever someone asks why the UK is the only country in Western Europe that charges university tuition, or whether it is really necessary to have quite so many people sleeping on the streets.

The truly extraordinary thing about May’s phrase is that it isn’t true. There are plenty of magic money trees in Britain, as there are in any developed economy. They are called “banks.” Since modern money is simply credit, banks can and do create money literally out of nothing, simply by making loans. Almost all of the money circulating in Britain at the moment is bank-created in this way. Not only is the public largely unaware of this, but a recent survey by the British research group Positive Money discovered that an astounding 85 percent of members of Parliament had no idea where money really came from (most appeared to be under the impression that it was produced by the Royal Mint)”

Because nobody knows how money is created, Richard Werner, a German Economist, decided to go and find it out for himself, by applying for a job at a bank. To his disbelief, he discovered that bank tellers don’t balance out the loans and mortgages they issue against a reserve. They simply create the money out of thin air and expect it to be paid back with interest.

What happens when accountants rule the country

So, if banks can create money out of thin air, purely based on the confidence that it will return one day with interest, why couldn’t governments do this? It’s called investing. The big crisis of today is a crisis of imagination. Governments have come to think of themselves only in terms of accountants, or as the instance that only takes money and prosperity away instead of creating it. 

It reminds me of my own experience with accountants years ago. Our accountants always used to be very proud and satisfied when they looked at the quarterly numbers. In the mind of the accountant, a great company is a company that performs well on a balance sheet. I hated these conversations. I still do. Because what accountants don’t see is that an excellent looking balance-sheet can mask all kinds of deep problems: terrible clients, 80-hours work weeks, a significant dependency on junior staff, unhealthy competition, etc.

An accountant could be looking at a company that is terminally ill, and still think it’s doing great. And since they talk numbers and spreadsheets, I tended to think they knew what they’re talking about. You don’t need much imagination that the same thing is going on on a government level. Dutch politicians recently lamented that they are performing well, and yet people keep being dissatisfied and disappointed. Voters are such ungrateful bastards. 🙂

Tom De Bruyne, February 2020.

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Pitcture depicting the Kock Brothers

The behavioural design of the economy. On incentives and rewards

By All, Citizen Behaviour

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 All, Customer Behaviour

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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Kahneman fast and slow thinking explained

By Behavioural Science Insights

Excerpt: this is a reference page. Here you can find the fundamentals of Kahneman’s breakthrough work on human decision making. Firstly, it will address his discovery of fast and slow thinking. Secondly, the importance of our unconscious mind in making decisions and influencing behaviour will be discussed.

1. Kahneman Fast and Slow Thinking

On this page, we want to give you a quick guide to Daniel Kahneman’s groundbreaking work about decision making. Maybe you’ve already heard of system 1 and system 2. Or you’ve heard Kahneman was the first psychologist to win the Nobel prize for economics in 2002. Could be you’ve heard about cognitive biases and heuristics. Enough to be intrigued. He is one of our heroes and the godfather of behavioural economics. We’ll give you the highlights of Kahneman’s thinking which he published in his best-selling book ‘Thinking Fast and Slow.’

Therefore, this isn’t so much an article as a reference page that you can consult whenever you want to know more. Or reread about Kahneman. To make your life a bit easier, we have created page sections so you can easily jump to the subject that is of particular interest to you. We also have included shortcuts links for this page as well as links to more detailed information if you want to dive a bit deeper. The page sections:

System 1 and 2
The power of your subconscious mind
Heuristic: definition and meaning
Cognitive bias

System 1 and system 2

Most importantly, the groundbreaking research of Daniel Kahneman showed that our brain has two operating systems. Which he called system 1 and system 2. These are the differences between the two systems of our brain:

System 1

  • FAST
  • DEFINING CHARACTERISTICS: unconscious, automatic, effortless
  • WITHOUT self-awareness or control “What you see is all there is.”
  • ROLE: Assesses the situation, delivers updates
  • Does 98% of all our thinking

System 2

  • SLOW
  • DEFINING CHARACTERISTICS: deliberate and conscious, effortful, controlled mental process, rational thinking
  • WITH self-awareness or control, logical and skeptical
  • ROLE: seeks new/missing information, makes decisions
  • Does 2% of all our thinking
How do you influence minds and shape behaviours? How do you change other people’s, as well as your behaviours? How do you help people to make better decisions? Isn’t it strange that the majority of all of our behaviours and communication aims at influencing other people? Yet, at the same time, we have no clue about the principles and laws that govern influence?

System 2 is a slave to our system 1

To summarize, you could say that our system 2 is a slave to our system 1. Our system 1 sends suggestions to our system 2 which then turns them into beliefs. Do you want to know more about the differences between system 1 and 2? We’ve created a more elaborate overview of the main characteristics of system 1 and 2. Or maybe you’d like to hear Daniel Kahneman himself explain the concept of system 1 and 2? This is a good video to watch and is only 6.35 minutes long.

 

 

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The power of your subconscious mind

Kahneman’s additional discovery of the bandwidth of each system was what made this research so significant. It was a breakthrough into the lack of reasoning in human decision-making. He showed how the two thought systems arrive at different results, even though they are given the same inputs. Foremost, however, he revealed the power of the subconscious mind; where we all tend to think we’re rational human beings who think about our decisions and about the things we do. Kahneman demonstrated that we’re (almost) completely irrational. But that’s a good thing. It’s our survival mechanism.

35,000 decisions a day

On average we all have about 35,000 decisions to make each day. These differ in difficulty and importance. It could be taking a step to your left or right when talking. Or deciding to take the stairs or elevator. But they all hit you on a daily basis. If you had to consciously process all these decisions your brain would crash. Your automatic system’s primary task is to protect your system 2 in order to prevent cognitive overload.

There are a few ways our automatic system lightens the load on our deliberate system. First, it takes care of our more familiar tasks by turning them into autopilot routines, also known as habits. But what system 1 primarily does is rapidly sift through information and ideas without you even noticing it by prioritising whatever seems relevant and filtering out the rest by taking shortcuts. These shortcuts are also called heuristics. We’ll explain them in the next section.

We are all irrational human-beings

Above all, we all have to accept that we are irrational human beings almost all the time. Even if you think you’re not. Somehow we can accept our irrationality, or at least understand it when it’s explained to us, but we keep making the same mistake with others. When trying to influence someone, we tend to forget they are irrational too. We often try to convince somebody with rational arguments or facts. We love to tell someone about the benefits of our products or services or ideas.

Decisions are based on short-cuts

However, the decision of the person you’re trying to convince isn’t based on this rational information. It’s based on system 1 shortcuts. Kahneman’s work demonstrates that people struggle with statistics and cannot reason the probable outcomes of their decisions. A second very important insight from his work is that our decisions are driven by heuristics and biases. We’ll dive deeper into those in the next two sections.

Heuristic: definition and meaning

The shortcuts our system 1 makes are heuristics. The definition of a heuristic, as can be found on Wikipedia, is:

Any approach to problem-solving, learning, or discovery that employs a practical method, not guaranteed to be optimal, perfect, logical, or rational. But instead sufficient for reaching an immediate goal. Where finding an optimal solution is impossible or impractical. Heuristic methods can be used to speed up the process of finding a satisfactory solution. Heuristics can be mental shortcuts that ease the cognitive load of making a decision.

A heuristic is our automatic brain at work

If we bring it back to Kahneman’s thinking, a heuristic is simply a shortcut our automatic (system 1) brain makes to save the mental energy of our deliberate (system 2) brain. This is our survival mechanism at play. You’re probably already familiar with the experience of heuristics. We sometimes refer to them as a gut feeling, guestimate, common sense, or intuition. We use heuristics for problem-solving that isn’t a routine or habit. The way we ‘build’ heuristics is by reviewing the information at hand and connecting that information to our experience. Heuristics are strategies derived from previous experiences with similar problems. The most common heuristic is trial and error, trying to solve a problem based on experience instead of theory.

The availability heuristic

Another example is the so-called availability heuristic. When making a decision, this heuristic provides us with a mental short-cut that relies on immediate cases that come to our mind. Or easier put: we value information that springs to mind quickly as being more significant. So, when we have to make a decision, we automatically think about related events or situations. As a result, we might judge those events as being more frequent or more probable than others. Therefore, we have a greater belief in this information and tend to overestimate the probability and likelihood of similar things happening in the future.

Heuristics can be wrong: biased

The problem with heuristics is that sometimes they’re wrong. They are nothing more than mental shortcuts that usually involve focusing on one aspect of a complex problem and ignoring others. Therefore, heuristics affect our decision-making and, subsequently, our customer’s behaviour.

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Cognitive bias

With all this in mind, you could say that Kahneman discovered something very interesting about our cognitive abilities as human beings. To be clear about the meaning of cognition, let’s take a look at how the dictionary defines it.

“The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.”

What Kahneman discovered is truly paradigm shifting. It is breakthrough thinking that can even hurt egos. We are far less rational and far less correct in our thinking than we’d like to give ourselves credit for. The side-effect of heuristics is that we all suffer from cognitive bias. A cognitive bias refers to a systematic pattern of deviation from norm or rationality in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion. Individuals create their own ‘subjective social reality’ from their perception of the input.

List of cognitive biases

There are a lot of cognitive biases. You can take a look on Wikipedia, at their extensive list of cognitive biases or check out an overview we made of the most common ones. The most important thing to remember is that we all base our decisions on a heuristic, and we all are influenced by our cognitive biases. By being aware of the most common biases, you can anticipate them.

Cognitive bias in recruitment

To round things up, here is an example that ties up all the concepts of Kahneman discussed in this post. Think about recruitment. If you have to interview a person for a position for your team or organisation, the chance of this person is getting hired is proven to be established in the first 10 minutes. What happens? A person steps into the room and your system 1 makes a fast, mostly unconscious judgment based on heuristics. This leads to certain biases in your judgment. If the person is similar to you, your system 1 instantly likes him or her (liking bias). If the person wears glasses, your system 1 thinks he or she is smart (stereotyping bias). It all happens fast.

Lowering mental stress

In conclusion, your system 1 has sent these suggestions to your system 2 without you even noticing it. And your system 2 turns those into beliefs. The rest of the interview your system 2 looks for affirmation of the system 1 suggestions. To recap, our brain simply loves consistency. It lowers our mental stress or cognitive overload. And there you go. You base your final judgment on the two operating systems of your brain. Helped by heuristics and skewed by cognitive bias. We do this all day, in all kinds of situations.

BONUS: How to become a better recruiter by understanding your biases'

Especially for you we've created a free cheat card to make sure you avoid these biases in HR situations. For you to keep at hand, so you can start using the insights from Kahneman whenever you want—it is a little gift from us to you.

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To sum it up

To sum it up, by understanding Kahneman you can understand human decision-making. Because if you understand human-decision making, you can understand human or customer behaviour. You can see how we are predictably irrational. Dan Ariely wrote a beautiful book with this title, which we highly recommend. However, we just have to accept our own irrationality and understand that if we want to convince someone or try to nudge them into a certain behaviour, they are just irrational too.

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How to change behaviour by design

By All, Citizen Behaviour

This blog post shows how we can change behaviour by design. 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.

 

Behaviour change: It’s a framing game

We are all facing a serious challenge when it comes to the planet we all live on. 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.

Behaviour change: 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.

Behaviour change: 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?

Want to learn how to use behavioural science to tackle societal challenges?

The Fundamentals Course is perfect for you. You will master a hands-on method to tackle even wicked challenges using applied behavioural science. Mind-shifting know-how that is made 100% practical.

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Changing behaviour: 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.

Behaviour change: 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 Groenewegen

 

 

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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.

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Rediscovering the Unconscious

By All, Behavioural Science Insights

“When you try to answer a question,” said Kahneman, “you sometimes answer a different question.” In a seminal 1979 paper, he and Tversky described a series of experiments that questioned the classical economic assumption of “homo economicus,” a rational actor motivated by self-interest. In its place, they defined what they termed prospect theory, a description of the mental shortcuts, or heuristics, that guide people’s everyday decisions, as well as the systematic biases that could result from them. “A heuristic,” Kahneman explained, “is just answering a difficult question by answering an easy one.” When asked, for instance, the number of divorces at one’s university, one might substitute the question of how easy it is to think of examples of divorces, a heuristic Kahneman and Tversky dubbed “availability.” “Evaluation happens in a fraction of a second,” Kahneman said. Reflecting on this theory’s place in the history of psychology, he noted, “In the last 20 years, [psychologists] have rediscovered the unconscious…but it didn’t come from Freud. It came from experimental psychology.”

Read the whole article here

 

Cover image as published by Harvard Business Review.

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