Give a Little Nudge

What do you think of when you hear the word nudge? I think of my mom giving me an elbow in the ribs at church for something I did she did not like. 

But Richard Thaler (distinguished professor of Behavioral Science and Economics at the University of Chicago Booth School of Business) and Cass R. Sunstein (Robert Walmsley University Professor at Harvard) defines it a little differently in their book. 

Nudge: Improving Decisions About Health, Wealth and Happiness. They defines it as: 

"Any aspect of the leader that alters people's behavior in a predictable way without forbidding any options."

An example is when a team member has a decision to make among several options, some with obstacles that would have to be tackled first. Assume the team member’s manager has a clear preference for what the team member chooses to do, but they don’t want to get too involved. Instead of mandating what they want, the manager could remove the barrier that would help persuade the team member to make a particular decision they wanted in the first place. 

This comes with the understanding that the leader influences people’s behavior to help make their lives longer, healthier and better (better in the eyes of the person being influenced). 

Even though this book is written for people to “Improve Decisions About Health, Wealth and Happiness,” the range of potential applications is much broader than the book manages to include. If you read it with a leader’s mindset, the power of nudges can lead you to think of creative ways to improve their work environment for the better (in their eyes). 

Thaler and Sunstein go on to explain the six principles of nudge through an easy but rememberable mnemonic device: 

iNcentives: Provide the right incentive for the right person at the right time to enable good decisions. This should be more than just money or materials. It should also include psychological benefits (i.e. celebrating will and giving praise).

Understand mappings: Help people understand the related consequences for different decisions. They recommend another mnemonic device: RECAP: Record, Evaluate and Compare Alternative Prices. 

Defaults: Create the standard or default path you would like people to follow or use from the start where the option is theirs to change. This idea is similar to the default on a phone: not many people change it. 

Give feedback: A good way to influence people to improve their performance is to provide frequent and realistic feedback. 

Expect error: 1700’s poet Alexander Pope said, “To err is human,” which is still the case today. When supporting people with nudges, you have to consider that there may be times they don’t make the decision you expect. 

Structure Complex Choices: Some decisions are complex, or people may be overwhelmed with too many decisions to make. Creating a more structured environment can support their choices. 

One of many takeaways of this book is when giving a little nudge is most beneficial. Thaler and Sunstein explain that there are five different situations that a nudge can be helpful: 

  • When the choice and consequence are separated by time (i.e. weight loss)
  • When there is a high degree of difficulty 
  • When the stakes are high and there is less opportunity to practice
  • When there are fewer chances to give feedback or feedback doesn’t work
  • When the person making the decision has little knowledge of a topic 

Thaler and Sunstein wrote this book for people who want to help—not force—others to make the right decision. They realized that people are busy trying to cope in a complex world and cannot always afford the time to think deeply about every decision. These evidence-based strategies can help give others a nudge in the right directions.

Reference: Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. Yale University Press.

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Here at Lead Read Today, we endeavor to take an objective (rational, scientific) approach to analyzing leaders and leadership. All opinion pieces will be reviewed for appropriateness, and the opinions shared are solely of the author and not representative of The Ohio State University or any of its affiliates.