My guest today is Katy Milkman. Katy Milkman is a professor at the Wharton School of the University of Pennsylvania, host of Charles Schwab’s popular behavioral economics podcast Choiceology, and president of the Society for Judgment and Decision Making. In addition, she is the co-founder and co-director of the Behavior Change for Good Initiative, a research center to advance the science of lasting behavior change.
She’s also the author of a top-rated book called How to change the science of getting from where you are to where you want to be.
When making decisions, we use both emotion and logic. The original economic model of decision-making was dispassionate. It said emotion usually is not a part of the decision, and it’s an optimization problem that we’re solving in life. And then behavioral scientists have come along. Behavior economics has developed and added in the emotion and pointed out, oh, actually, we care a lot about things like inequality and, we’re going to try to avoid outcomes that make other people suffer.
What have organizations done to influence decision-making and judgment and change that consumers probably are not aware of that has ever happened?
Facebook was exploring whether or not their platform could be used to increase that voter turnout metric. And they did an A B test where they randomly assigned some people to see information about their friends, and whether who had claimed to vote, you know, who said, told the site I voted. So either they show you a bunch of your friends, each one voted, or they don’t. And what they found is offering you a bunch of your friends and a message that these other folks have voted, increasing your likelihood to vote because social norms influence us. So it matters to us what everyone else is doing. I should do it too.
Techniques that are being used which are more effective at driving change happen when other people around are doing the same. An example is Hey, did you know that 90% of your neighbors are using less energy than you are? It turns out you’re going to start consuming less energy because you’re like, Oh, my God, I can’t believe I’m the guzzler, I’ve got to start switching LED bulbs and turning off the lights when I leave. So we are an example of something that’s sort of in the toolbox. And there’s a lot of leaders who see something that’s not working in their organization, maybe, not enough people are saving for retirement, nobody’s exercising, no one’s taking their medications, we’ve got an issue with nobody is showing up on time for meetings, and they go to the grab bag, we sort of have a list of successful studies. But it is crucial to diagnose or ask why people do not want to change.
I’m trying to get a change to happen in my company. I want my employees to be more innovative. I want them to be more engaged. And you say, well, first, you have to diagnose why that’s not happening. How do you start that first phase of diagnosing? Is there a specific process that you go through?
Talk directly to them. If you can go, start asking questions of the individuals. What are the sticking points? The conversation often gets you pretty far.
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There are six common internal barriers to change. How we can remove them is a pretty simple set of things. And it’s not that hard once you understand what the problem is. So in the book I wrote recently, that’s actually how I’ve organized it. These are the things that I think are the most common barriers and the solutions that science offers. And they range from the challenge of just motivating people to get started impulsively like it’s not instantly gratifying. Procrastination is the flip side, forgetting, which I think we underappreciated as barriers. Laziness, although that sounds so negative, and I mean it lovingly. Because laziness is an asset, right? In that, you want to take the shortcut whenever you can. In life, that’s how you get to the finish line as fast as you can. So it’s a good thing to look for those shortcuts. It’s just that it can also trip us up believing that you can do it right, having confidence. And then finally, another issue is social. So did the people around you show you it’s possible? It’s related to belief, but it’s the social component. So this is sort of the biggest, most common thing I have seen, and diagnosing it starts with being aware of what they are—and again, having conversations with people about what seems to be the sticking point in trying to map it out.
Everyone has a different opinion on how to get things done and how to drive change.
There is solid evidence that goal setting adds tremendous value. But of course, not always. And I think that’s one of the reasons we get into these debates is because everyone wants the one size fits all solution and skips that diagnosis phase. And so you know, if you look around, you can find examples of times when goals are successful and when they’re not. Goals give us something to strive for and push towards. Goals can be dangerous when the goal you set is the wrong goal, or if it crowds out other things. So they need to be broken down into bite-sized pieces. So it’s not distant and ambiguous. And it needs to be clear what the metrics are. And they need to push you.
Internal barriers to change:
Getting Started problem: I need to make a change; I have some desire to change, there’s some other goal I’d like to achieve. I’ll worry about that tomorrow. I’m not going to get started today. To jumpstart change, we use moments in our lives when we feel like we’re turning the page on a chapter and it’s a new chapter we’re beginning. They can be little fresh starts, so Mondays are a fresh mini start. They can be more prominent fresh starts like a New Year, the celebration of a significant birthday, or I’m moving to a new community or a new role. Leaders don’t do enough to capitalize on those moments, and we’ve shown in research that if we call people’s attention to a fresh start moment that they might not otherwise be focused on and encourage them to make a change at that time, that can be successful.
Impulsivity: The tendency we have to overvalue the instant gratification we’ll get from action and underappreciated and underweight the long-term consequences.
In reality, we get further faster when we look for an enjoyable way to pursue our goals because we keep at them because the experience is pleasant. And we value the here and now. So basically, I think one of the most important things that we can know as leaders and as individuals about ourselves is, we have this misconception we’ll be able to push through the pain and push through unpleasantness. But, in reality, we get our best work done when we’re enjoying the experience.
Procrastination: A Technique to use is the commitment device, which has been studied extensively by actual economists and psychologists. It’s a tool that penalizes you if you fail to achieve a goal. And that creates an incentive structure that will be more costly to procrastinate than it will be beneficial. If you can put money on the line, this is called the cash commitment device that you agree to forfeit. For example, suppose you fail to achieve a particular goal by a specific date. Websites like stick.com and Beeminder, help people create plans. You can forfeit money to a charitable cause if a referee reports that you didn’t achieve the goal. And these kinds of tools have been proven to have effective incentives to work, and you can incentivize yourself.
Forgetting: If we don’t remember to follow through on critical things, that will help us achieve our goals constantly. And there are valuable reminders. A tool that Peter Gollwitzer of NYU has studied is called a planning prompt. That’s a helpful tool when you’re trying to help somebody make sure they actually will follow through on an intention. You walk them through some questions like when will you do it? Where will you do it? And how will you get there? Thinking through those simple things can help remind people to stay on task. You have to break down all of those components; you’re less likely to forget because it’s now concrete; you’ve thought through the obstacles in going through the questions and that’s how memory is structured. And maybe you put it on your calendar and now actually get a calendar alert when it’s time to do it. There are a lot of simple tools that can help with forgetting
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There are 6 trends that are transforming leadership forever do you know what they are and are you ready for them? Download the PDF to learn what these 6 trends are and what you should be doing about each one of them. These are crucial for your leadership and career development in the future of work!
Laziness – There are two big things we can do about laziness. The first is to set defaults wisely. When you set up a system, the path of least resistance, what will happen, if someone takes no effort at all, is a positive outcome, you get great results. The most famous is savings defaults; you join a new employer and they default you into part of a retirement savings program like a 401k. So that a portion of every paycheck is just automatically sent in a savings account. If they opt you in, you see almost 40% more employees start saving and therefore accumulate a decent arsenal for retirement than if you make it easy to opt-in.
Anytime it’s something even that is unimportant, but where it could have consequences for their health or wellness, try to make sure that the default has been set to something that will be advantageous for most people.
Habits: Habits are autopilot for repeated decisions, default actions, and they can be trained deliberately. It’s a straightforward engagement in behavior and making sure there is a reward. You could do this for yourself or encourage someone else to form a habit, repeat, and repeat as often as possible. And that is the formula that tends to put things on autopilot.
A key barrier to change is having good social support and having confidence in yourself built from others relying on you.
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There are 6 trends that are transforming leadership forever do you know what they are and are you ready for them? Download the PDF to learn what these 6 trends are and what you should be doing about each one of them. These are crucial for your leadership and career development in the future of work!
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