A nudge is a gentle push to improve behavior. Your spouse nudges you under the table when your dinner-party conversation begins to drift into “don’t go there” territory. This differs from being a noodge– a Yiddish expression for someone who is a constant nag. Inexperienced managers can be noodges. Nudging is the art of subtly influencing positive change. It is one of the highest management arts. And the subject of a delightful book and accompanying website about the art of a well designed nudge.
I recently read Nudge, a book about Behavioral Economics by Richard Thaler and Cass Sunstein. Behavioral Economics is a relatively new field that studies how people make decisions about money. Traditional economic theories rely upon the rational man who, when given the right information, will make reasonable self-serving decisions. In reality, most people do not fit this archetype. We are swayed by hidden emotions and biases. Behavioral Economists study how real people make decisions — and how that should inform such things as web design, public policy, and marketing. There’s a lot of science behind it, journal articles, experiments, even neuro-economic brain scan experiments (which track which parts of the brain associated with pleasure zones get active when you discover the item you were searching for on Amazon, and which parts, associated with pain zones get active when you click on the “Proceed to checkout” button). Thankfully, this book stays out of the nitty-gritty science, and instead takes a more intellectual look at the issues of freedom and choice — especially as it relates to public policy.
If you are interested in people, ideas, public policy, economics, freedom, choice, democracy, or social welfare, then you should read this book. It will help you frame and inform your existing ideas, and more importantly, provide you with new ways of thinking about these issues. Even if you don’t agree with the authors, it’s a very stimulating read. If you read the book and agree or disagree — feel free to express so below in the comments.
Enterprise 2.0 and Behavioral Economics both seek to understand and improve choice behaviors within the context of an economic system. Both fields can help understand under what conditions an employee might share information at work to people who are not on her team? When would an employee withhold potentially information in the workplace (but might otherwise share that same information on Facebook to her friends and family)? A common issue I hear from senior management in some firms is that they don’t know how to get employees to update records – one of the underlying issues of Knowledge Management. And I ask them if their is any motivation for employees to do so. Um, no. They are tasked with closing deals, delivering content, or doing something more valuable than filling forms – and thus the forms don’t get filled out.
Many people assume that people who are very active on the social Internet will bring those very behaviors to the workplace. However, my experience and customer feedback tells me that reality is not so simple. Sure, some people are naturally social, extroverted, and take the Facebook/Twitter type behaviors they picked up at home and bring them to work. But most workers realize that behavioral implications at the workplace have huge stakes. Unless you are the big boss, don’t throw sheep in the boardroom. Most people behave very differently at work, and appropriately so.
Nudge’s message is to present a third approach to the traditional, polemic question about the balance of governance and freedom. One approach, which the authors attribute to the more extreme ends of the libertarian end of the political spectrum, is to offer maximum choice and freedom, and that governance should be limited as much as possible. The other end of the spectrum is to be paternal, where government (or management) dictates and limits choices. This is the great public policy debate that underscores many important debates, and the book addresses many examples. Nudge offers a model that blends libertarianism and paternalism into something that many people would find quite reasonable.
For example, helmet laws: Some people believe that motorcycle riders should have the right to ride without a helmet — it’s their lives at risk, adults can choose if and how they want to protect themselves. Others support laws (enacted in many states in the US) that require helmets. They provide many arguments ranging from the role of government to protect her citizens, to the public health costs that helmet-less riders incur. Assuming that helmets save lives (which some argue, but let’s not go there now), most debates are about the role of government as applied to freedom and society. The authors suggest an approach that addresses these polemic issues. Rather than the binary debate of “yes-helmet” vs. “no-helmet” laws, they imagine a structure where riders could choose to ride without helmets if they meet certain conditions — for example: to ride without a helmet, a rider must 1. pass an extra set of driving safety instructions and tests (at their expense), 2. display a decal on their motorcycle indicating their completion of this certification, and 3. complete their organ donor cards such that society can benefit from their potentially reckless demise. The approach suggests that with the right set of nudges, one can provide both the freedom of behaviors, as well as the push toward preferred behaviors. The debate shifts into a discussion about the right set of nudges under which circumstances. (OK, we can debate if the insurance companies have data rights here too — but that’s not the point.)
The corporate workplace is as different from the world of the consumer Internet as it is from government policy — but there are lessons from both. Managers may choose to mandate behaviors via uncomfortable edicts. We hate those. Managers might choose to live and let live, waiting to measure output and reward (or fire) us for our achievements. Managers have a role in participating in the creative act of work. But when they micromanage, we want them to get out of our hair. What if they were skilled in the art of nudging?
Collaboration software inspired by Web 2.0 helps. Some have clever nudges built in (like a progress bar on your profile). I think that software nudges and management incentives need to work hand-in-hand. Together they can help transform enterprise behavior.
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