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Chapter 4: How to Create a Behavioural Business

What to Do Now

In this part, we have seen how behavioural science demonstrates that:

 much of human decision-making is more emotional, less rational, and more instinctive than we assume;

 as a consequence, much of our behaviour is heavily influenced by context and our innate biases and heuristics;

 changing that context (the choice architecture) even in very small ways can have a significant impact on behaviour;

 a scientific, evidence-based approach to applying behavioural science has helped governments address a number of important issues, such as smoking;

 to determine the most effective ways to change behaviour, it is important to test, in as close to the real-world context as possible, and collect data on actual (not claimed) behaviour;

 to effectively do this in business requires a growth mindset, i.e. recognising that we can learn as much from failure as from success;

 for businesses, doing this has been proven to generate marginal gains (in terms of both efficiency and effectiveness) and achieve competitive advantage.

Consequently, there are a number of things you can do to make effective use of the science to become a behavioural business:

 ensure you understand that people are most often in Homer mode, i.e. will not think unless they have to, and so create processes, systems, products and services that make it easy to achieve a desired behaviour;

 focus on collecting data on actual, not claimed, behaviour based on the desired outcomes;

 make hypotheses based on data and create infrastructure to conduct experiments to verify them, i.e. science the shit out of problems;

 encourage test-tube behaviours – promote continuous testing and learning, building of new hypotheses, and testing creative, counter-intuitive solutions;

 be prepared that some of these experiments may fail, and that learning from these failures is an important part of a growth mindset that delivers marginal gains in both efficiency, and effectiveness.