How ‘Nudge’ Theory Can Help You Make Better Decisions
- January 25, 2022
Nudge theory was brought to the public’s attention recently, as the U.K. government instructed the public to protect themselves against coronavirus by suggesting behavioural ‘nudges’ - wash your hands, not touch your face, avoid shaking hands with people.
Before the U.K. entered ‘lockdown’ on Monday 23rd March, rather than strict orders, instead we had been given instructional advice – or nudges. However, as the COVID-19 outbreak worsened, the government were forced to bring in more stringent measures.
But nudge theory is not a new concept, the term was first noted in 1995 and was made famous by the 2008 book Nudge: Improving Decisions About Health, Wealth and Happiness.
The premise behind nudge theory is that positive reinforcement and indirect suggestions can help to influence our behaviour for the better. More importantly, and what I’m going to talk about in this blog, is the idea that nudging can help groups of individuals make better decisions – an essential skill for any team. But first, let me explain what constitutes a ‘nudge’.
What Constitutes a Nudge?
Nudges are defined as small changes in the environment (which are inexpensive and easy to implement) that influence people’s behaviour.
Have you ever noticed how your total recycling bin capacity is bigger than your household waste bin? Your recycling bin is around a third larger to encourage you to recycle more – this is a nudge.
The American grocery chain Pay & Save placed green arrows on their shop floor leading shoppers to the fruit and veg aisles, and 9 out of 10 times the shoppers would follow; fruit and veg sales rocketed.
And not forgetting, every time the cashier asks you if you want to ‘make it a large’ whether you’re buying a coffee at the train station or a G&T on a Saturday night – this is a nudge, too.
A nudge is a way that an individual is positively reinforced to make a particular decision. They are not mandates, they are suggestions, and they usually work. Used correctly, they can help people learn faster and make better decisions – let me explain how.
Nudges for Better Decisions
Why do humans have to be nudged to make better decisions in the first place?
We all know that fruit and veg are good for us, yet many people ignore them when out shopping. Would we still recycle as much if both bins were of equal size? The truth is, probably not.
This is because our minds are wired to take short cuts to save precious brain energy expenditure. We tend to want to do what we think is easy, whether it’s good for us or not. So when we’re at work, we tend to make decisions on ‘autopilot’, especially when we’ve been in the same role for any length of time.
Every decision we make has an impact, but when we behave automatically and intuitively, this does not always produce the best result – the truth is that we need help to make better decisions.
So, how does this translate into your organisation? There are ways that leaders can help nudge their teams into making better decisions – let me explain.
Nudge Theory in Business
Because of the triumphs of nudge theory elsewhere in the world, companies are now adopting nudge theory to help their employee make better decisions, both for their personal development and with the goals of the organisation in mind.
Managers and H.R. professionals can make small tweaks in how options are presented to individuals to help them make better decisions. This behaviour is then learnt and after a certain amount of time, becomes a habit.
For example, some organisations find it challenging to get employees to focus on long term goals. A way to use nudge theory to combat this is to regularly and adequately inform employees about these long term goals; in doing this, it can positively influence their attitude and overall performance.
Visual feedback is another effective way to influence your team positively. As I mentioned earlier, the human mind is always looking for shortcuts. If you want to build positive behaviours, perhaps you want to speed up production in an assembly line or encourage best-practice disposal and recycling procedures, pictures and infographics will help when placed strategically and in high-traffic areas.
Another way leaders can help nudge their employees into making better decisions is by encouraging a support network within your team. Regularly involving all team members in discussions about the future of the business, and letting them be a part of current decisions helps them to understand better how their behaviour and choices can influence significant outcomes.
The critical thing to remember with nudging is that is must be suggestional. When humans are told ‘you must…’ or ‘you shall…’ it is counterproductive; it tends to have the opposite effect.
Organisations across the globe have adopted nudge theory to get better results – it is time you implemented some nudges in your workplace?
Some simple changes can produce incredible results. For further reading, the link to the influential book can be found here.
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