How to make behavioural economics a habit
Category: Blog & News
If you know about behavioural economics, want to integrate it in your work but find yourself reverting to the old ways of doing things, awaiting the perfect project to apply it to, then it’s time to rethink your approach. Procrastinating means you are missing opportunities each and every day to become a more effective influencer. Here’s a two-step approach to make behavioural techniques a habit.
Step 1. Overcoming your own resistance
Adopting a new approach to how you do things, like intentionally applying behavioural economics (BE), is an exercise in behaviour change.
That means we can anticipate three potential barriers that stand between you applying BE and not applying BE:
- Apathy – you can’t be bothered
- Paralysis – you are confused
- Anxiety – you are scared of getting it wrong
Embedding new knowledge and skills like BE is a brain-intensive exercise, requiring deliberate, System 2 thinking to displace System 1, habituated pathways. In other words, you have to slow yourself down and interrupt your usual approach to writing emails, thinking about your customer, designing a presentation, interacting with colleagues and so forth.
I know because despite being an expert in the field, I still have to pause and deliberately apply BE to how I interact. The habits governing how we write and speak are so entrenched it takes effort to do it differently.
The good news is that by slowing down up front, you get a better return on your efforts. For example:
- Reformatting the way you invoice will take some time up front, but improve your rates of on-time payment from there on.
- Rethinking the approach you take with a stakeholder may feel more effortful, but will mean a more successful (and less stressful) meeting.
- Redrafting pro forma letters to customers will reduce the number of in-bound complaints you receive.
With so much to know about behavioural economics, it can feel overwhelming. Where to start? What principles should you use in the email you are about to write?
When I am training people in how to adopt BE, I recommend narrowing choices by focussing on three things:
- Clarifying your behavioural objective – Who are you trying to influence? In what context? What are they currently doing? What would you like them to do?
- Anticipating why you may get resistance – Is Apathy, Paralysis and/or Anxiety most likely to be a barrier?
- Use one of two key BE principles per barrier – For Apathy, ensure there’s a benefit for Now Me (Short-term Bias); for Paralysis, signal the most popular choice (Norms), and for Anxiety, give them nothing to fear if they do take action and something to fear if they don’t (Loss Aversion).
Being nervous about applying BE is entirely understandable; it’s like any new skill. Remember when you were learning to ride a bike? You were probably taken somewhere safe, away from traffic where falling wouldn’t hurt too much. You may have even had training wheels to keep you on track. Even if it felt like you’d never get the hang of it or you fell off, you persevered because not riding a bike was worse than these short-term tribulations.
In short, you had nothing to fear if you did try riding a bike but something to fear if you didn’t. So it is with applying BE.
- Give yourself nothing to fear – The key benefit my clients receive through BE coaching is less an understanding BE principles, and more about building confidence. Start with small scale, low risk applications. Try sending colleagues a BE optimised email, or rework a webpage that can be monitored for impact. Make sure your manager and/or peers are on-board so you feel comfortable trying something new.
- Give yourself something to fear – If you are serious about embedding BE in your daily work, put something on the line. As a start, list the downside of doing what you’ve always done and missing the upside of BE, and commit to sharing your results with the leadership team.
Step 2. Creating a habit loop
Habits are created when behaviour is repeated and reinforced on a consistent basis. Using the habit loop model devised by MIT researchers (and popularised in The Power of Habit), we can break the anatomy of a habit down further as:
- Trigger – what and when you are reminded to apply BE
- Routine – what you actually do to apply BE
- Reward – why you bother
In my experience, the biggest culprit in the failure to apply BE is an absence of a trigger. If you are not reminded to think and act differently when faced with a task, you simply won’t bother.
The secret to developing a BE habit therefore relies on identifying and/or creating triggers. Here are some to get you started.
Apply behavioural economics when:
- Writing an email to colleagues
- Creating a new website
- Conceptualising or drafting a marketing campaign
- Sending an EDM to customers
- Writing a letter to customers
- Preparing an invoice
- Developing a letter of engagement
- Responding to a pitch and proposal opportunity
- Making a sales call
- Considering market research
- Preparing for an important stakeholder meeting
- Participating in a strategy session
- Navigating budget constraints
There are also some emotional triggers, for instance:
- You’re not 100% certain all the bases have been covered
- You’re frustrated that you are not getting the answers you need
- You are sick of the same old, same old
- You’ve noticed colleagues are all talk, no action
- You’ve just lost a big account and are looking for answers
- There’s a sense of dread or panic in the business
- Your industry is changing and you feel out of control
Behavioural economics is an amazing opportunity to get better outcomes from every single interaction you have with other people. Don’t you think it’s time to get on your bike?
This article also appeared in Smartcompany.