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Behavior Change Can Be Difficult – Use the ‘Nudge’ For Real Results

What makes things work? More specifically, what is the final push, shove, jerk, bump, prod or jolt that must occur to see a project completed or to convince your team or customers that you would like them to change their behavior so that it lines up with your goals?  My professional writer friend knows the perils of pausing when writing a book. He halted for months, and his book risked stillbirth. A conversation with another fine writer embarrassed him, and he finished. His conversation is emblematic of my new favorite word — nudge — that propelled him past the finish line. The reverse is the Ph.D. candidate who is still allegedly writing that dissertation 10 years later.

The nudge idea is fascinating because of the complexity of decision making.  Behavioral changes can be seemingly difficult and in business, expensive. It’s no wonder that the nudge concept is popular with behavioral economists.

Richard Thaler (a University of Chicago professor and Nobel Prize Economics winner) launched the idea with co-writer Cass R. Sunstein, a Harvard law professor. His book, Nudge, gained steam during the economic crisis of 2008 when our banking and mortgage industry began to slope southward. I liked the notion that a nudge rests on easy choice, rejection (you might not agree with it) and a free market approach. Thaler says that a nudge “is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.” You might disagree with Thaler, but the 2008 book is still in print, which would suggest its publishing (and idea-producing) durability.

Need a few examples? Thaler points to efforts at improving employee participation in employer-sponsored retirement plans. The nudge? Auto-enrollment. Simple, elegant, low cost and so obvious (in hindsight). Recent studies show auto-enrollment participation rates at 87 percent compared with 63 percent without auto-enrollment.

Another example is Texas and roadside litter. The nudge was a slogan, “Don’t mess with Texas.” The motto appears to have a tinge of the “be proud you’re a Texan” attached to it. In its first year of adoption, littering fell 29 percent. Here’s Thaler’s observation: “In its first six years, there was a 72 percent reduction in visible roadside litter. All this happened not through mandates, threats or coercion but through a creative nudge.” Thaler says upward of 95 percent of Texans were aware of the slogan.

But what does all this mean, as a friend of mine often says. How does it translate as an advantage to utility implementers, program managers or executives within the utility industry? 

First, you need a nudge. Everyone, and I repeat, everyone falls prey to the predictable. For the sake of becoming more productive and creative (and giving you the answer when your boss or customer asks, “what’s next?”) it says that some solutions, not all, but some, are solvable by a simple nudge and not a complex engineering of a solution. Don’t think complex, think simple.

Second, the beautiful part of a nudge is that even if it doesn’t work in your case, you won’t have spent half of your budget on the scheme. The best nudges are usually low-cost, and the results are trackable. It allows you to show off to your employer or customers that it works while demonstrating your fiscal restraint. Can there be anything better?

Third, lest I forget, my headline was the nudge.

Ryan Kiscaden's picture

Thank Ryan for the Post!

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