Behavioural economics - researched approaches to managing change
Leading change and its challenges have long been discussed. Texts (including our own!) cite the high percentage of change failures. People talk about resistance to change and how it is so easy to fall back on old ways of doing things and get stuck.
More Than Training Company is one of many companies in the industry helping clients to make that change happen. Our tools include tried and tested observations from our own experience, models from the non-fiction literature and researched data. One of the scientific disciplines from which we draw ideas and thoughts is behavioural economics (behavioural economics).
We won't go any further than defining the discipline itself - those interested will quickly find it in their chosen search engine or AI tool. Instead, we would like to present one tool in behavioural economics to streamline change: the nudge principle (nudge).
Nudges: small changes can have a big impact
The nudge principle (nudge) is based on the idea that people's decisions can be subtly influenced without coercion. In practice, this means that people will unobtrusively make different choices when their environment is designed to support the desired behaviour.
A practical example: you may remotely remember the media ’hype’ in the early 2010s about the City of Helsinki's Vegetarian Day. In a nutshell, the story was that the Helsinki City Council decided in 2010 that schools should have one vegetarian day per week. This caused something of a political stir, and vegetarianism still comes up in politicians' speeches from time to time. So the change was and is resisted, despite the idea of promoting health and environmental friendliness.
In 2019, the University of Cambridge studied how to increase vegetarianism without political upheaval. The research team's simple method was to increase the number of vegetarian options in the canteen and place the vegetarian option in the first or most central position. The finding of the study was that the change did not reduce overall food consumption or canteen sales, but people shifted to eating more vegetarian options without being forced to simply by changing the order of presentation - and the proportion of vegetarian food in the total increased by around 40 %. (You can read the study here: https://pubmed.ncbi.nlm.nih.gov/31570584/)
What does this have to do with change management?
Many change projects fail because people continue with their old ways, even if the new model is clearly better. To make change successful, it is worth considering how small changes in the environment and processes can steer employees in the right direction without them noticing.
Applications in the business world:
- Communication and visual cues: If you want employees to use the new IT system, make sure it is made easy and attractive to use. Place the new system on the intranet where it's easiest to find, and minimise the hassle of opening and logging in. It's OK if you also start to make the old system a little more difficult to use 😉
- From telework to the office: Could people be nudged into the office not by force but by sensible and holistic design of the working environment. If you can get things done in the workplace that should be done anyway, and it's easy to get there, why not come? For example, you can wash your car in the car park during the working day, the laundry service will pick up dirty collared shirts and suit jackets from the office and deliver clean ironed clothes back to the workplace, or you can buy your child a snack from the workplace canteen kiosk before you take the child to the playground. All conveniently under one roof!
- Changes in meeting culture: If you want efficiency in meetings, you can try stand-up meetings, which are inherently shorter than traditional seated meetings.
Conclusion: take advantage of people's natural ways of making decisions
Leading change is made much easier when you consider how people actually make decisions. The nudge principle can be used to create small but effective changes in the employee environment so that desired behaviours become natural. In turn, harnessing the power of default choices helps to ’drive’ change rather than resist it.
Rather than trying to force change from the top down, it is worth focusing on how people already act and how their natural behaviour can be steered in the right direction.
