Humans behave better when “nudged”, as opposed to leaving them to do stuff on their own with or without instructions, where they would end up doing things which may not be better either for themselves or for the collective.

Humans are not good at making the best decisions left to their five senses and with two sides of the brain; the rational choice framework would not work as would be predicted by an Economist, not the behavioral kind. Even specific instructions do not yield good results.

Take for example smoking that kills, but left to themselves with specific instructions, the smokers would not be able to kick the habit. Or take the case of wearing helmets for driving, left to the motorists, none would be willing to take it if there are no laws to enforce it, but laws would have limited effect as we have seen that stricter the punishment, the violations not necessarily follow a predicted path.

Humans are difficult people to deal with and when they are a sizeable mass, it would need some “nudges” to move them in a particular direction, only if you mustered the art of doing it.

Many CEOs actually do know how to do it and they can influence large numbers to a particular end; that way they become the Chief Nudge Officer of the company.

Think of the most common behaviors in a shop floor, not wearing a helmet is one of them, whereas the case in point is pretty obvious that the person carries a clear risk if he violates. But humans being humans, this is not so obvious a risk and such behaviors are common. A very common nudge that could work is to make the cost of not wearing appear very high. For example it could be advertized that one who wants to avoid wearing helmet should enroll for a tedious three hour session after work for one month where he would be given a course on safety.

This kind of a nudge did work with motorists who wanted to avoid helmets.

Take for example smoking habits in college campuses. One of the nudges used was to advertize that the College “has 80% non-smokers”, which acted as a positive nudge for individuals to belong to the bigger group than be in the smaller group or outliers. This “nudged” people to avoid smoking in campuses.

Performance is a very key thing that drives a business, individuals and collectives if nudged in the right way could make or break. Some act on the negative nudge, like visible signals of non-tolerance for low performance, some act better on positive nudges like recognition in a scale that was never expected and it could motivate many others in the same direction. But to do this to large cohorts working in different geographies need very powerful nudges, which only CEOs know how to do it better and they excel in that.

Moving large cohorts to task is like keeping a highway clean from litter. The Texas State achieved this by taking out massive ad campaigns using Dallas Cowboys where the videos showed them cleaning highways with the slogan, “Nobody messes with Texas”. Later on shirts and jerseys came out with this message which caught the attention of the entire state. The badly littered highways started to become cleaner and cleaner over time.

Influencing a large group would need an understanding of how the herding phenomenon happens where most people want to avoid the trap of being the outlier. It starts with small numbers of people coming together and that is all it takes to reach a large number over time.

Influencing the first converts to your theme is all that matters and then proclaiming an early victory acts as the nudge to the next group and the group after.

Today technology helps to nudge better; think of the nudge to influence seat belts to be fastened, if we have to ensure 100% compliance on the road for all front seat passengers on cars, imagine if we had to replicate what the air-crew have to do, inspect every seat after the seat belt sign is on. But a simple nudge from the car automation systems makes it so simple with a soft alarm whenever you are missing to fasten the seat belt.

There is a 100% chance of death for the front seat passenger in the event of a collision, but humans will attach an almost zero probability to that.

Econs would perhaps do better here by attaching some probability. But Econs are always not doing better, especially when it comes to risk taking. By assigning the best of possibilities with probability weighting, none of the options would ever look attractive. But the human will still take a risk that is worth taking in his less calculative mind and some will make a profit that would never be predicted.

The Chief Nudge Officer would do better if he had humans and Econs crossing each others’ path with the right nudges that he only could craft.

Thus happens transformation.

 

Being the Chief “Nudge” Officer: Taking a cue from Thaler

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