April 15, 2020

There are some behavioural insights you cannot afford to ignore

Behavioural insights combine psychology, neuroscience and behavioural economics with empirically tested results to understand and influence how people behave. These insights can be used to implement new policies more efficiently and successfully by nudging individual’s behaviour and shaping collective norms.

Its application is rooted in an understanding of the large number of cognitive biases people have and how they often short cut cold logic. There are many behavioural insights that all senior leaders need to be aware of. Here are just six of the most important:

Distance and in-group bias

These two biases are amongst the most difficult for any business to overcome. This is because our brain is hardwired to place more importance on things and people closer to us. As workplace culture evolves to feature more flexible policies, such as working from home and hot-desking, this bias can potentially become more problematic. Even if teams are only split across different floors, this can still present potential issues.

To overcome these issues, businesses must become hyper-aware of any communication breakdowns and veer towards over-communication. Regularly discussing strategy, values, daily actions and team roles can ensure everyone is on the same page and feel valued.

Hard easy effect

In behavioural science “hard easy effect” occurs when staff do not have the necessary understanding of the methods and details needed to properly implement a project. This can result in over-confidence and the tendency to overestimate the probability of success in hard tasks. This coupled with “pro-innovation bias” sees many businesses taking on more than they can successfully cope with versus the business’s institutional experience.

To properly estimate which projects their teams have the capability of fulfilling senior leaders should actively seek a variety of perspectives and be ready to adjust to what is feasible.

Adrenaline bias and planning fallacy

Traditional leadership styles of companies are often top-down and while this can be successful in many situations, there are potentially several downsides. One of these is the lowered appreciation of the pitfalls on complicated or exciting work – stuff that gets the adrenaline going. Senior leaders, especially committees, are prone to giving orders but often don’t consider cautionary or negative feedback.

Senior leaders also tend to feel that anything is possible if they order it, but don’t need to do it themselves. This means the team doing the work is often left under-resourced. It is a psychological phenomenon that senior leaders will expect their directives to be completed without the need for further planning or proper preparation.

To prevent these issues from occurring, mandatory ‘pre-mortems’ should be put into working practice, where you must imagine the project is over and went awfully so any issues can be pre-empted. Using external advisors with on skin in the game can help by providing different perspectives.

Motivation conflict

People have lives, drives and motivations beyond the narrow remit of what their company or manager needs from them, which will ultimately impact productivity. These “motivation-blockers” can crop up due to home-life issues, a manager not keeping a commitment to them or a fear of learning something new.

A frequent blocker is when an employee feels their manager simply doesn’t care about them. The mistake made is that these blockers can be approached using logic, reasoning and a manager pep-talk. Managers should approach the person and confront the issue very directly and frankly. A simple pep-talk will rarely if ever make a significant and lasting impact on the employee.

Loss aversion

Did you know, when golfers are putting for par they are more accurate than when putting for a bogie? Golfers perform better when trying to get a good score, rather than when trying not to get a poor score. The same applies to business.

We know people feel the hurt of loss far more than the joy of a win – this is called “Loss aversion”. Other research shows us when faced with the prospect of failure, ethics become muddied as employees tend to focus on the consequences of perceived failure and over-react in response. Lowering the pressure and personal cost of failure will help employees work towards the overall good of the company rather than acting less ethically for fear of missing targets.

Anchoring during new hire interview processes, hampering recruitment diversity

It is not as simple as people hiring what they are familiar with, it is more often the case that people are influenced by a line-up of interviewees they selected and auto-discount other candidates. It has been shown that even just wearing a hat, if the other candidates do not, is enough to cause an interviewer to subconsciously rule someone out.

A difficulty here is that unconscious bias training for interviewers makes almost no difference over the medium term (0.1%) to changing behaviour. Some studies show that this training can actually make it worse, as those trained then have “license effect” e.g. “I can’t be biased now, because I have had the training”. Our brains are hard-wired to reduce diversity (as, in our primitive brains, this equals risk), so we must trick our brains, not try to rationalise with them. This can be achieved by:

Using software to strip age, gender, educational and socioeconomic background, and other information out of CVs.
At interviews ask the same questions in the same order to every candidate.
De-triggering the language in the job posting from words that may put off men or women, such as, “competitive” or “supportive”.