rotmanmagazine.ca / 73Sarah Reid directs the leadership and organi-
zational change research portfolio at the
Conference Board of Canada. Previously,
she worked at the Ontario Securities Com-
mission, helping to establish its behavioural
insights unit, and at Doblin, an innovation consultancy within Deloitte.
Ruth Schmidt is a Visiting Industry Professor at the Institute of Design in
Chicago. Prior to this role, she was a senior leader at Doblin, an innovation
consultancy within Deloitte. This article originally appeared in Nudge
Turns 10, published by The Behavioural Scientist. The complete issue can
be downloaded online.only thing we absolutely know about the future is that we will
be wrong about it. But despite a bias towards testable, empirical
hypotheses that deliver present-tense proof of efficacy, behav-
ioural science is actually unusually, if not uniquely, qualified to
shine a light on designing for the future.
Our ancestors were just as ‘predictably irrational’ as we are,
and cognitive heuristics and biases will persist into the future,
even if they manifest differently as contexts change. By partner-
ing with design and framing behavioural science as a speculative
tool in addition to an evidence-based one, we can collectively
better envision the new, in addition to testing the known.
Why Behavioural Science is Good for Business by Erik Johnson
Delicious, perfectly portioned and ready-to-cook meals
delivered to your doorstep. Easy-to-use tools to significantly
increase your retirement savings. Systems for de-biasing your
hiring process. These ideas might seem unrelated, but in fact
they are tied together by a common thread: they were all made
possible by insights from behavioural science.Such innovations are possible when behavioural science
is applied to companies’ three primary functions:- creating the best product or service;
- reaching users who want that product or service; and
- managing an efficient and ethical organization.
In each of these processes, smart companies are infusing
behavioural science to improve their bottom lines. It only took
Blue Apron about three years to join the ranks of the rarefied,
so-called ‘unicorns’ — start-ups valued at over a billion dollars.
Driving this success is a simple, smart business idea: Send
people everything they need to cook tasty, healthy recipes
right to their doorsteps.
The vast majority of millennials— 80 per cent—think
cooking meals at home is a good thing to do; and yet they eat
out more than any previous generation. Why? Cooking can be
intimidating, hard to plan, and it can just feel like too much work
after a long day. Whatever the obstacle, millennials have a hard
time turning their good intentions into, say, fontina-stuffed pork
chops with potatoes and pizzaiola sauce. By making cooking
easy, Blue Apron makes cooking at home an intention people
will actually follow through on.
Another behavioural insight baked into the Blue Apron busi-
ness model is that it removes the temptation to eat out by nudg-
ing its subscribers to plan ahead. You subscribe to Blue Apron
when you are motivated to follow through on your intentions, and
groceries arrive when your motivation to shop may have been
waning: when you get home from work, tired and hungry.
Great companies know how to get their customers’ atten-
tion. At Morningstar, we partnered with a company to provide
a tool to help its employees plan and save for retirement. We
liked the tool, but the problem was that our direct mail communi-cations to the company’s employees were falling on deaf ears.
A member of our team came up with a hypothesis: The recipients
had no idea who we were and thought we were spam. Ouch.
To test this, we ran a simple randomized control trial
(RCT). Some employees got the same letters as before, while
others received the communication with their company’s logo
positioned right next to ours. The result? Simply adding the
employer’s familiar logo boosted uptake of our product by
300 per cent.
Consider one of the most important and frequent deci-
sions companies make: hiring new employees. Typically,
candidates are evaluated through interviews, where they show,
well, how good they are at interviewing. That’s not a super
relevant skill for most jobs. Daniel Kahneman recognized this
during his time in the Israeli army and proposed a new process.
Instead of interviews that rely on intuitions or gut feelings, sim-
ply select key traits or skills needed for the role (no more than
six) and then grade candidates using questions that evaluate
those traits and skills. After interviews are completed, add
up the scores for each trait and select the candidate with the
highest score.
Organizations — like the UK’s Behavioural Insights
Team (BIT) —are offering platforms that make these more
objective hiring practices easier to implement. For example,
since we know names can bias our perception of candidates,
the BIT’s hiring platform makes it easy to anonymize résumés.
They also allow blind scoring of different candidates’ respons-
es to the same question at once, ensuring candidates are not
judged differently on the second question because of their
response to the first.
Although managers may be reluctant to surrender a part
of their hiring autonomy to a platform, these tools can remove
bias and help them hire people with the skills their organization
really needs.Erik Johnson is the Marketing Optimization Manager on Morningstar’s
Behavioural Insights Team, where he applies behavioural science prin-
ciples and experimentation to marketing processes and communications.