3BI: Applying behavioral science in organizations
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Hello and happy Friday!
Recently, my friend and podcast co-host Zarak Khan teamed up with Laurel Newman and released Building Behavioral Science in an Organization, a guide on how to integrate behavioral science into your work written by a group of expert practitioners - including me!
I wrote a chapter on behavioral science and marketing, but there are sections on every phase of business, including product design, marketing, communications, employee engagement, and strategic decision making.
This week, I’ll share some insights from the book, but be sure to download a free copy for yourself (or, if you prefer a physical book, buy it for cheap).
Check out our latest podcast with Zarak and Laurel, too:
Why use behavioral science?
Behavioral science has become mainstream with its surprising insights into humans, but what does that mean in practice? And how can it be applied in companies?
Per Charlotte Blank, Chief Behavioral Officer at Maritz:
Fundamentally, behavioral science is a methodology for better understanding your stakeholders. Be they customers, employees, or partners, the people you need to influence are all, well, people. Behavioral science gives us the tools to uncover honest insights into how people actually behave. Not how they necessarily should behave to maximize their economic utilities, but how they really behave, in all their nuanced psychological glory.
Understanding customers
The most obvious stakeholder for a business is its customer base. What does a behavioral methodology for improving that understanding look like?
From Namika Sagara, Co-Founder and Chief Behavioral Officer at Syntoniq, Inc.:
There are two major ways behavioral scientists can contribute to understanding of consumers and other stakeholders. One is to apply behavioral frameworks and principles to ‘traditional’ market research. Another is to leverage existing behavioral science literature to better understand consumers, without conducting primary research of your own.
For the former, behavioral frameworks can improve market research insights:
For example, Regulatory Focus Theory has shown that people tend to have two different motivations: promotion mindset and prevention mindset. Consumers with a promotion mindset are more motivated to achieve their goals and desires and to become their ideal selves (e.g., the best version of yourself). In contrast, a prevention mindset is when consumers’ motivation is centered around fulfilling their duties and obligations, and they are more motivated by their ‘ought’ self (e.g., the kind of person who you think you should be). These underlying motivations can influence desire for different products and services, but also how they experience these products and what they remember about the experiences.
By understanding deeper motivations, you can gain insights not only into what consumers say they do but also into why they behave the way they do.
On the latter, research from behavioral science can inform how customers process information:
…behavioral science can tell you a lot about how people process information. For example, we know that framing can lead a consumer to be more loss averse. It is true that the intensity of loss aversion differs for each individual, and that there are contextual effects. However, the guideline that certain framing leads consumers to be loss averse generally holds across different contexts. This is one example of knowledge that behavioral scientists can provide without additional primary research. Because behavioral science literature can teach you about how consumers process information, and what drives consumers’ behavior, it can guide you towards a deeper and more nuanced understanding of consumer behavior.
Understanding employees
An organization’s biggest internal stakeholders are its employees. Laurel Newman, Behavioral Scientist at Edward Jones, covers how behavioral science can improve human resources programs:
Most people’s assumptions about human behavior and decision making are outdated and incomplete. This leads to the design of programs that are well-intentioned, but that fail to capture people’s attention, that overlook constraints on people’s time or ability, or that tap into the wrong kind of motivation. Behavioral scientists can help here by guiding the design of programs to ensure that they work for “real humans” (who are often busy, overwhelmed, and “predictably irrational”). Behavioral scientists are also well-in- formed of the literature surrounding motivation and behavior. We can draw from hundreds of behavioral science principles (think loss aversion, social proof, ego depletion, etc.) to help improve programs by infusing behavioral design.
This is most effective when applied to structural changes in the organization:
To influence longer-term patterns of behavior, we must go beyond nudges and either make lasting, structural changes to the environment or change something within the person (e.g., by creating a habit or increasing their intrinsic motivation to do it). Behavioral scientists help design environments that do this. For example, a technology company who wants their employees to take a new approach to customer service might redesign their environment to include more autonomy (choice of how to resolve customer complaints), mastery (recognition for their successes), social connection (small group meetings to support one another) and purpose (how their services allow customers to accomplish their own important business), all of which have been shown to increase intrinsic motivation. We simply cannot nudge people into being more intrinsically motivated.
Check out the book for more and have a great weekend.