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Update on Inside Nudging and Other Behavioral Science Efforts


I’ve published an update to Inside Nudging: The Excerpts (in paperback form for talks, workshops, and academic inquiries). The update includes:

  • Chapter 2: Organizations Can Package Behavioral Science for Good – This chapter describes a case of using behavioral finance in the retirement plan design space. I use this case to demonstrate one example of what a successful innovation center might look like. I also provide a summary using the Behavioral GRIT™ framework, where GRIT stands for the business functions related Goals, Research, Innovation, and Testing.
  • Chapter 8: Nudges Refined, Ethics Examined, Acceptability Explored – This chapter introduces Nudge Psyche, a checklist of things to think about so that you can be deliberate about how you approach nudge design and ethics. It attempts to help design by thinking about things from two broad perspectives: nudge design and nudgee attitudes. This chapter has been one of the most difficult ones for me to write as it draws from  a diverse set of research and literature areas including decision science, medical ethics, government, organizational behavior, behavioral science, and moral psychology. I have found the Nudge Psyche checklist to be very helpful though as implementation in the real world can get grey at times. The Nudge Psyche checklist can help one to tease apart the underlying issues.

The chapter excerpts are also complemented by Appendix A: Ideas to Introduce Behavioral Science Initiatives, which I quietly published earlier based on increasing interest by companies in learning about how to get started with behavioral science. I argue that first a company needs to identify its goals and identify what type of predominant organization model it wants to pursue. This may be an innovation center like I describe in Chapter 2. I also define four other predominant organizational models I’ve seen. I also offer that a company should consider a number of implementation elements that may play a role during execution. Example elements include an advisory board and a behavioral science officer.

As a final update, I plan to give a limited number of talks on Inside Nudging and co-host Behavioral Economics Workshops in conjunction with one of my colleagues and partners, Namika Sagara at Sagara Consulting. More information on the workshops can be found here.

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Behavioral Economics and Innovation Workshops


I am co-hosting Behavioral Economics and Innovation Workshops in conjunction with one of my colleagues and partners, Namika Sagara at Sagara Consulting. The goals of these workshops are twofold. First, the workshops teach and demonstrate key behavioral economics (BE) concepts to participants. Second, the workshops provide an introduction to how companies can implement BE initiatives. In-class exercises and a mock innovation setting provide an experiential learning process for internalizing BE knowledge and skills. More information on the workshops can be found here.

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A Perspective on How Behavioral Economists Think We Should Deal With Reason and Emotion in Decision Making

I thought I would re-post an answer to a question I was asked to answer on Quora, as it illustrates a conceptual flavor of how knowledge of behavioral economics can be applied to help navigate behavioral obstacles and opportunities.

The question:

How do behavioral economists think we should deal with reason and emotion in our decisions?

My answer:

The balancing act is tricky, and I think context and desired outcomes matter. For example:

  1. A thirty-year old might have problems saving for retirement because they think of savings as being for stranger. The solution might be to increase emotional connection between the thirty-year old and their future self so that the right behavior of saving can be achieved.
  2. A person might be emotionally attached to their home, and as a result, they might try to sell their home at too high of a price. It might be better if they can loosen their emotional attachment and feelings of endowment. Getting 3rd-party perspectives might be helpful to the seller in terms of distancing themselves so they can set a reasonable market price.
  3. Sometimes it’s hard to control emotions and desire, and people may try to precommit to a state so that proper decisions are more likely to be made in spite of the situation. I have heard of behavioral economists pouring salt over desserts at dinner (after they’ve had a few bites to get the taste) so they are less inclined to eat the whole thing.

The main takeaways are that there are essentially “two minds” at work, and they work in concert in different ways. Sometimes you need emotion. Sometimes you want less of it. Sometimes you can’t really change your emotions so you need self-control devices and external perspectives. Other times you need to try to slow down thinking. There are many different approaches to applying behavioral economics concepts.

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Please take a quick, 30-second survey for my book – Inside Nudging

I am writing a book for management professionals and those interested in implementing behavioral science (which includes behavioral economics and finance) in business settings. Situations include the incubation of innovation centers, behavioral science overlay capabilities, or advancement of existing organizations. I’d love your input on what challenges you see and what you’d like to see addressed!

 

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What Are The Best Management Consulting Books?

There are four books that I recommend as core to the generic practice of consulting. These are:

  1. The McKinsey Way by Ethan Rasiel
  2. Process Consultation by Edgar Schein (dry read)
  3. Flawless Consulting by Peter Block (optional and highly recommended for those coming from engineering versus consulting backgrounds)
  4. The Pyramid Principle:Logic In Writing and Thinking (for managers & consultants especially) by Barbara Minto

Beyond the generic core, there are three major dimensions that come to the top of my mind when considering practitioner-level knowledge of the management consulting space:

I have developed a working reading list that attempts to cover many of the areas above. It is a list for entry-level to advanced management consultants. It can be found here.

And for those readers seeking books and information on getting a job with a consulting firm, there are a number of other books out there. One site that sells such a book (“The Consulting Interview Bible“) is ManagementConsulted. As an aside, back in 2009 Kevin Gao (ex-McKinseyite) interviewed me for ManagementConsulted’s Life as a Consultant series.

The best historical account of the consulting industry I’ve read is The Lords of Strategy: The Secret Intellectual History of the New Corporate World by Walter Kiechel

Finally, I just released a book entitled The Consulting Apprenticeship. The book focuses on nuances passed on during apprenticeship and complements the four books I mention at the beginning of this post or can be read standalone. More info at ConsultingApprenticeship.com.

The Consulting Apprenticeship is available for purchase at Amazon.

Edit (November 28, 2017): I just completed a new book, So What Strategy by Davina Stanley and Gerard Castles. The two authors began their consulting careers at McKinsey & Company (communications specialists). The book is thematically aligned with the books above, and I’ve written a review of the book here: The So What Strategy – A Highly Recommended Book for Business Communications. I also recommend considering their online courses here.

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My Behavioral Science, Design, and Business Book Reading List

As I was gathering my thoughts for my Inside Nudging project (www.InsideNudging.com), a project that I envision tying together the application of behavioral science in business contexts and providing more of an inside look at innovation, strategy and implementation, I wanted to take stock of books that have probably influenced (liberally interpreted) the way I look at behavioral science.

Perhaps you’ll find something of here of interest to you for your weekend read. I am also open to getting more book recommendations. Thanks!

Psychology, Behavioral Economics and Finance

  • Phishing for Phools (Akerlof and Shiller)
  • Drunk Tank Pink (Alter)
  • Predictably Irrational (Ariely)
  • The (Honest) Truth About Dishonesty (Ariely)
  • The Upside of Irrationality (Ariely)
  • Save More Tomorrow (Benartzi and Lewin)
  • The Smarter Screen (Benartzi and Lehrer)
  • Thinking Smarter (Benartzi and Lewin)
  • The Foundations of Behavioral Economic Analysis (Dhami)
  • Risk Savvy (Gigerenzer)
  • Stumbling on Happiness (Gilbert)
  • The Why Axis (Gneezy and List)
  • The Happiness Hypothesis (Haidt)
  • The Righteous Mind (Haidt)
  • Inside the Nudge Unit (Halpern)
  • Decisive (Heath and Heath)
  • Made to Stick (Heath and Heath)
  • Thinking, Fast and Slow (Kahneman)
  • The Undoing Project (Lewis)
  • Dance with Chance (Markridakis and Hogarth)
  • The Irrational Economist (Michel-Kerjan and Slovic)
  • Scarcity (Mullanainathan and Shafir)
  • Democracy Despite Itself (Oppenheimer and Edwards)
  • Irrational Exuberance (Shiller)
  • The Last Mile (Soman)
  • Simpler (Sunstein)
  • Misbehaving (Thaler)
  • Nudge (Thaler and Sunstein)

Design

  • Hooked (Eyal)
  • Designing with the Mind in Mind (Johnson)
  • The Design of Everyday Things (Norman)
  • Envisioning Information (Tufte)
  • Designing for Behavior Change (Wendel)
  • Design-Driven Innovation (Verganti)

Business and Strategy

  • Negotiating Rationally (Bazerman and Neale)
  • Freakonomics (Dubner and Levitt)
  • Blink (Gladwell)
  • The Tipping Point (Gladwell)
  • Yes! (Goldstein, Martin, and Cialdini)
  • Blue Ocean Strategy (Kim and Mauborgne)
  • Insurance & Behavioral Economics (Kunreuther, Pauly, and McMorrow)
  • Behavioral Economics and Policy Design: Examples from Singapore (Low)
  • Drive (Pink)
  • Absolute Value (Simonson and Rosen)
  • Wisdom of Crowds (Surowiecki)

Communication

  • The Pyramid Principle (Minto)
  • The Sense of Style (Pinker)

On My Future Reading List

  • The Power of Noticing (Bazerman)
  • Happy Money (Dunn)
  • Switch (Heath and Heath)
  • Irrationality in Health Care (Hough)
  • The Art of Choosing (Iyengar)
  • The Organized Mind (Levitin)
  • King William’s Tontine (Milevsky)
  • The Marshmallow Test (Mischel)
  • Antifragile (Taleb)

PS. Here is a teaser video based on Chapter 1 of my book, Inside Nudging.

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