I’ve made it pretty clear that I’m a nerd of many facets. Recently I listened to an episode of Freakonomics on behavioral science and really enjoyed it, so I listened to it all over again, took notes, and created lessons for you guys from them since it was just that good. Enjoy!

  1. We need to make it safe to have conversations others won’t naturally have. That’s how you make innovation an integral part of what you do, not an after the fact, bolt-on, clunky process. The more comfortable people are in making innovative comments, the more innovation you’ll have. The more “danger” people face in making innovative comments, the less you’ll have.
  2. Economics focuses on a perfect world. Behavioral economics focuses on real behaviors from real people in an imperfect world. Don’t assume all else will remain the same when you make a change in the workplace. There will be some unintended consequence, either for good or ill.
  3. Don’t assume cash is the answer to motivating people. They highlight a newspaper losing customers that brought in an agency to help them use non-cash incentives to retain subscribers, and they were incredibly effective (see #6).
  4. Use role playing to demonstrate new techniques. Don’t rely on PowerPoint or even something as interactive as employee video communicatins just to get the point across, especially when the interaction requires dialogue. Role playing might be a bit uncomfortable at first, but it’s better than facing a new situation unprepared.
  5. Behavior trick #1 to get what you want: get some background on the “why” when you get a question/complaint. Use that in your counter. For example, “I want to cancel this subscription because I’m busy, have a full time job, and my kids are growing up so they need my attention” would warrant a response such as “Oh! Did you realize you could get reduced price movie tickets for you and your children with this subscription?”
  6. Behavior trick #2 to get what you want: using social norming (peer pressure) to help drive behaviors. “Many people in similar situations do xyz.” That pressures us to follow the norm and not take our own path, even if the norm seems to be against our own best interests at the time. “Most people choose x, but you can choose y or z” led to triple the conversion rate.
  7. Behavior trick #3 to get what you want: loss aversion is powerful. Basically, this means that it hurts us more to lose something than the pleasure of gaining something of equal value, even if we don’t particularly like what we have! Script: “I’d hate to see you miss out on that…”
  8. Reframe statements to be positive. Calls using positivity and the techniques above were 3x more successful with an 80% save customer/avert loss metric. Wow!
  9. More on social norming: we feel a sense of comfort doing what others do and mild anxiety of doing what others don’t. It’s the “herd mentality” at work.
  10. Human beings survive on inference (guessing about a situation based on known facts), so copying others is a fairly safe bet. people pay for big brands because they think there’s less chance of it being catastrophically awful.
  11. If you can play these emotions in other people you can get them to do what you want. In a position with a lot of influence opportunity but little hierarchical position power, this is a big deal. We are extremely irrational creatures, even though we like to think we are good at rationalizing things. Newsflash: we’re not. (click to tweet)
  12. The funny part is that these ideas aren’t new, they’re just being rediscovered and proven with empirical data. Shakespeare, Solomon, and others throughout history have used ideas like these to get their points across.
  13. Plus, advertising firms have been using these techniques for years–now they are gaining exposure elsewhere and for other types of situations.
  14. Moment of joy! They turn to HR/employment and bring on the Chief Analytics Officer from Cornerstone OnDemand, Michael Houseman. He talks about his mission to help companies hire and keep the best employees by analyzing all the potential factors of employment:  prehire assessment results, when the person was hired (or left), supervisor, shift, wages, overtime, etc.
  15. There is some correlation of pay vs longevity: pay enables people to stay longer. Data shows that a 10% increase in pay delivers a 5% decrease in quitting behavior.
  16. You know that “warm fuzzy” feeling someone gets from a raise? Research shows that feeling only lasts 1-4 weeks. (click to tweet)
  17. Wages are a lever you can use to drive behaviors, but other things keep your turnover low, and are less costly. For instance, finding better supervisor fit is a great opportunity.
  18. But seriously, how important is a supervisor in the employment relationship? The supervisor accounts for about as much reason someone will stay as all other factors (culture, job, wages, etc.) combined. Huge.
  19. Research shows that raw talent only predicts about 10-15% of success. This is the myth of “A players.”
  20. Measuring honesty in employment–people claiming honest were 33% more likely to be fired for policy violations. (click to tweet)
  21. The issue is in asking people if they are honest. Dishonest people are likely to answer falsely, and honest people are more likely to admit when they have faults here, skewing the numbers.
  22. The real way to measure honesty: applicants were asked about computer skills and level of tech savvy, then a couple screens later they were tested. Researchers compared the results of both data sets. In the end two groups emerged: one was honest and one was “creative” in their responses (cheating/lying, in other words).
  23. Honest employees tested better on virtually every performance metric, except for one: sales.
  24. And my personal favorite: employee web browser choice can indicate job proficiency. In their studies Chrome/Firefox users are better employees on every metric. They can’t speak to why that is or what the cause is, but the simple answer is they suspect users that are informed about technology and concerned with productivity will actively choose another browser and not rely on the built in (and poor overall choice) of Internet Explorer.

 So, what was most interesting for you? Anything truly surprising? 

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