An Interview With Steve Shu: Nudging, Behavioral GRIT & The Effort It Takes

It’s safe to say that our ears perked up when we heard that Steve Shu‘s new book Inside Nudging: Implementing Behavioral Science Initiatives is a “must-read for any company interested in behavioral science initiatives”.

Here at Wilde Agency, we specialize in putting behavioral science to work for our clients, so naturally, we rush-ordered a copy of Inside Nudging and reached out to schedule a quick chat with Steve.

Although he was traveling internationally at the time, Steve agreed to answer 10 questions via email. We took this opportunity to further explore key points from his book, including the importance of framing and the definition of Behavioral GRIT. Below, you’ll find his answers.

Nudging involves making small design changes to the environment that people make decisions in. These small changes can have big impacts on decision outcomes.

For example, in the area of getting people to save for retirement, if one were to present a person’s savings as $100,000 in wealth versus $4,000 per year versus $11 per day to live on during retirement, behavioral science research informs us that there will likely be different outcomes in people’s savings decisions because of the way the equivalent information was framed.

In this case, people who see the wealth number may end up saving less in the future, because they see a big dollar number; they overestimate how much their accumulated wealth means in retirement. On the other hand, if we lower the thinking obstacles a bit and do the math for people to show them that their current savings means that they will only be able to spend $11 per day in retirement, then that framing hits closer to home as to whether a person is saving enough.

So nudging can involve modifying the information, choice, and process architecture that people face. Unfortunately, many businesses design their environments without proper attention to behavioral science, and they wind up with what I called an accidental architecture. It is much better for businesses to factor in behavioral science and pursue deliberate architecture in their designs.

Your book Inside Nudging introduces the Behavioral GRIT framework to readers, which of course, isn’t the same as the “grit” popularized by Angela Duckworth‘s widely-viewed TED Talk.

There are a number of popular science books out there about behavioral economics and nudging. However, the flip side of their popularity is that by making science accessible through popular books, people tend to perceive the implementation of behavioral science as easy business. A shortcut way of thinking is to just take the laundry list of behavioral toolkit interventions in the pop-sci books, and start applying things.

In my book, I introduce another perspective that behavioral science implementation requires discipline, Behavioral GRIT. People have often got a taste of the behavioral side; they’ve read great books like Thinking, Fast and Slow. But they are missing the second part, which is the GRIT to get things done.

GRIT stands for Goals, Research, Innovation, and Testing with the twist of how it relates to behavioral science.

So for example with respect to Goals, through case studies and other methods, I illustrate how companies need to think deeply about needs and values of constituents. For example, how will nudging in a specific scenario be aligned with a business, its partners, and consumer interests? What about ethics?

I shed some light on how different interventions have varying levels of control, resistibility, trust, fairness, acceptability, and moral grounding. The bottom line is that the book focuses on the business discipline required to implement behavioral science.

Structurally, the summaries you provide at the end of each chapter make it easy for readers to zero in on actionable insights. What are ways that other writers can increase cognitive fluency and help readers achieve their goals?

Checklists are one of the greatest inventions related to behavioral science. If one does a web search on the Boeing’s B-17 Flying Fortress and aviation checklist, one will get a sense of their power.

In a nutshell, the B-17 played a key role in helping to win World War II, but there were literally problems in getting that plane off the ground. In the first test flight of that plane, the pilot forgot to release gust locks on the plane before takeoff. That oversight destined the plane to crash, and the very experienced pilot and co-pilot were killed.

Boeing had to figure out what to do in order to save the B-17 program. In their subsequent analysis, they essentially found that the pre-flight procedures for the B-17 were too extensive, even for experienced pilots.

Stemming from that analysis, they invented the aviation checklist, argued by some to be the father of all checklists. A checklist is an invaluable tool for coping with cognitive load and increasing fluency.

There are many other tools for helping garner people’s attention, capacity for deep thinking, and emotional connection. These can include vivid illustrations, supplemental videos, exercises, or other tools for readers.

Let’s talk a bit about framing. The anxiety associated with growing older can lead some people to avoid thinking about their retirement plans. How would you recommend putting a positive twist on this topic, especially when it’s so essential for the future?

Retirement is part of one of the case studies I address in the book. I like that case study, because retirement is something that many people will have to go through at some point in their life.

But just starting to plan can be a difficult, stressful thing to think about, especially as one gets closer to retirement. And there can be many obstacles and hazards encountered during retirement. So while starting to plan can be difficult, the quality of the retirement planning is also something of concern.

Let’s go back to the original question, which I really think is around the goal of helping people to start the planning process. A key approach in behavioral science is that one has to identify and prioritize the obstacles that people encounter. From there, one can design solutions to address the prioritized obstacles.

If the primary hypothesis is that people perceive retirement as the enemy and something to be avoided, then we need to innovate and change the dialogue. We should consider explicitly giving people the option to get help and support, such as from an advisor, peer, or family member.

In a solution, we should also consider changing the dialogue to be about what the retiree wants, such as in terms of happiness for retirement. Put less initial focus on the external factors, which are perceived enemies. Focus on friends.

As a parting thought, with some clients, my colleagues and I have introduced concepts from hedonomics into products and approaches. Hedonomics is essentially a growing body of research that ties behavioralist perspectives on happiness into the traditional picture of economics.

Framing can also be important in articulating problems. What’s the key to pinpointing an issue, in order to determine the fastest, most effective solution?

Framing and articulating problems statements are important considerations and very tied to the notion of goals. For example, consider the problem statement of trying to find the best nonstop flight between two cities.

What if the problem statement was instead framed as finding the cheapest flight between two cities? Or what if the problem statement was to find the most enjoyable flight? Or forget planes altogether, what if the problem statement was about finding the most enjoyable way to travel with a significant other to another city?

Pinpointing requires us to deeply think about goals and to get to root of things. As part of identifying goals, until we identify the root goals we must ask questions like, “why is this important?”

Let’s revisit the problem statement about flights. Why nonstop flights? Why best flights? Why flights at all? Being fast at developing a solution doesn’t matter if we are focused on the wrong things. Goal planning and articulation are critical activities, especially for implementing behavioral science initiatives.

It is inherent human behavior to take more risks when you are already at a loss. In your opinion, is there an ideal point to settle for current losses and stop taking risks?

I think this is a bit situational. That said, people do tend to seek risk when faced with losses. Decision science generally prescribes that people should ignore sunk costs, try to set aside emotions, and look at decisions going-forward on their own merit.

There’s a related nuance with decision making, however. People should also look at portfolios of decisions as opposed to decisions in isolation.

For example, I have homeowners insurance. If I look at that decision in isolation, it is generally a loss terms of cash premiums. But I also have purchased a house.  If my house were to burn down, I would be compensated for my loss via the insurance.

The decisions to purchase either or both house and house insurance complement one another. The decisions should not be viewed in isolation, and the decisions should be made regardless of past sunk costs.

This is highly related to how companies should invest in behavioral science initiatives. Some projects will pan out. Some will not.

Generally, I advocate that management should not lose sight of the portfolio view for their behavioral science project investments. The objective should be to manage the overall portfolio toward gains and worry less about losses for individual investments within the portfolio.

What factors influence whether a person fights for what they believe to be fair versus accepting an outcome that can be perceived to be a compromise?

When fairness has been violated, it can invoke very strong negative feelings. As I mention in my book, if you do an Internet search for the terms “fairness Capuchin moneys unequal pay,” you should find a very enlightening video that shows how monkeys react when fairness has been violated.

But fairness is a complicated thing. In the book, I suggest that companies at least look at situations through procedural, distributive, interpersonal, and informational justice lenses.

For example, procedural justice includes the fairness of processes used to make determinations and whether people can express their perspectives and feelings during and after the process. It might also include whether people have access to a process for appeals.

Looking at situations through the four organizational justice lenses I mention above can help inform whether people will find situations to be fair. This in turn can presumably be used to predict to some extent whether people will fight or compromise.

You discuss Facebook’s infamous emotion study in your book, which many researchers considered a breach of ethical guidelines. With that in mind, do you think that trust between a corporation and the public can only be earned through 100% transparency? 

I won’t be able to do this topic the proper justice in an interview, but I will say that trust is not an absolute yes or no thing.

Trust can be measured along a continuum, and trust is something that has to be earned. One aspect about trust relative to nudges is how well goals are aligned (both perceived and real) between the nudger and nudgee. To that extent, transparency helps to ensure that goals are aligned as much as possible.

In any case, I suggest as part of Behavioral GRIT that companies fully explore the goals of all constituents. This will help inform design objectives, guardrails, and degree of transparency desired.

If a company is going to invest their time and money into research, what are the key deciding factors that they should be thinking about?

I see a number of ways of approaching this question. One aspect is to look at the overall strategy for incorporating behavioral science. What is the predominant organization model that the company wants to use?

For example, is the company looking for broad integration of behavioral science into the business with ties to innovation? Or is the company looking for something narrower, like integration with marketing or a specific functional area?

A second aspect is to think about organizational elements that might be needed to execute a strategy relative to research. These organizational elements might include a behavioral science officer, a scientific advisory board, research scientists, consultants, testing platforms, data analysts, and the like. Having a way to tap into scientific papers in the behavioral science space is also highly desirable.

A company should basically look at both its strategy and required resources.

To wrap things up, what’s the one major takeaway that you hope readers get from your book? 

Part of my goal is to bust some myths. People have a misconception that one can read a book about behavioral economics, instantly become an expert, and start to apply things.

Perhaps it can be done, but true success in applying behavioral science requires GRIT. There is no free lunch, yet the kitchen is open to all who are willing to put in the effort.

He is the author of Inside Nudging, as well as The Consulting Apprenticeship: 40 Jump-Start Ideas for You and Your Business.

To learn more, head to his website. He can also be reached on LinkedIn, Twitter or via email at steve@steveshuconsulting.com.

The post An Interview With Steve Shu: Nudging, Behavioral GRIT & The Effort It Takes appeared first on Wilde Agency.