IT strategies are often associated with big investments and expenses, but when things go well, they generate even bigger profits. Behavior design can help pave the way to successful implementation and profit.
When we tell our clients and colleagues about our mission to improve the success rate of strategies with the help of behavioral design, we almost always end up listening to stories about failed strategic changes, frustrations, useless strategies and a lot of wasted time.
This confirms our belief that combining the best of classic strategic planning methods with the latest research on human behavior has great potential when applied to IT strategy and strategic projects. This is especially true at a time when the pace of change, complexity and workloads are greater than ever before.
One of the main reasons that achieving strategic goals and implementing major changes is difficult is because we do not take human behavior into consideration.
Behavioral design is the art of influencing human behavior with the use of evidence-based insights into how humans make decisions. It’s all about understanding natural human behavior and finding ways to work with it during change processes. If the target goal works against natural human behavior, we will not succeed.
Integrating behavioral design into IT strategies and projects makes a lot of sense, because IT is the driver of technical, organizational, and various other business processes.
Danish writer Morten Münster opened up the eyes of many to the concepts of nudging and behavioral design with his informative books featuring entertaining case studies. There is a big difference between realizing the possibilities of behavioral design and being able to put them into practice, especially in work environments that are already busy. At IT ADVISORY we are dedicated to meeting this challenge.
People seldom act logically and rationally
People tend to see themselves as rational, self-disciplined individuals who almost always behave appropriately and logically. The truth is far from it!
Human biology has not changed significantly since the last ice age. Research in the fields of behavioral economics, neurology, psychology and sociology shows that humans have limited cognitive capacity and perseverance. We are also greatly influenced by the context, by the group and by our emotions, judgements and habits.
In recent years there has been growing awareness that humans behave irrationally much of the time. In 2002 Daniel Kahneman receive the Nobel Prize in Economics for his pioneering research into how humans make assessments and decisions. Since then, a lot of literature has been published on the subject. Kahneman is also the author of Thinking, Fast and Slow, which presented contemporary behavioral science to the general public.
Morten Münster made a name for himself in Denmark with his best-seller I’m Afraid Debbie from Marketing Has Left for the Day and the brand-new successor Debbie Returns. Whatever the context, professional or personal, most of us can learn the basics of behavioral design and relate to the problems, paradoxes and similar situations from our own lives.
“Behavioral design is the art of changing the behavior of others using on evidence-based insights into the ways in which people made decisions.
(I’m Afraid Debbie from Marketing Has Left for the Day)
The Elephant Metaphor
The metaphor illustrated below, featuring an elephant, a rider and a path, shows how behavioral design should be integrated into strategic planning and organizational change processes. The model was originally presented by psychologist Jonathan Haidt.
The elephant represents human instincts, habits and automatic reactions. The rider represents our logical, rational qualities and the path represents our surroundings and the direction we want to head toward. With the rider guiding it, the elephant follows the path to our intended destination.
If you want to get the rider and elephant to move in the desired direction it is essential that:
- The rider understands the purpose and point of the journey.
- The elephant thinks that the journey is attractive and manageable.
- The path is cleared of major obstacles.
In the context of IT strategy, this metaphor has two major points:
- The rider conceives of the strategy, but for the most part it is the elephant that actually does the work.
- The elephant is far more powerful than the rider. If the elephant does not cooperate, the rider will not succeed.
Traditionally, focus has been on the rider – the rational mind. While this is important, it is far from enough. By applying behavioral design and concentrating just as much on the elephant and the path, it is possible to achieve greater success with strategies and changes.
More specifically, incorporating behavioral design includes the following five focus areas:
- Make it easy to do the preferred behavior.
- Make it difficult to do undesired behavior.
- Give positive and clear feedback.
- Create role models and fellowship.
Tell appealing stories that people want to be a part of.
Behavioral design dogmas
At first, behavioral design might seem abstract, difficult, and expensive, but it doesn’t have to be. Start by taking a pragmatic approach. Doing a little is a lot better than doing nothing. With applied behavioral design, making an effort accumulates over time with compound interest. This means that when human behavior is integrated into the planning from the start, there is a huge return on investment.
In order to operationalize the work, we have come up with 4 dogmas of behavioral design that pervade our approach to strategic planning, execution and changes.
Dogma 1: 1. Change requires adequate capacity
➔ If an organization or its key employees are fully occupied with other activities, it is impossible to cross the finish line. Consider whether certain activities can be put on pause or scaled down, or whether it is possible to increase capacity. Do not initiate a change process without ensuring that there is adequate capacity.
Dogma 2: Changes must be attractive, simple and concrete
➔ If a desired change is perceived as being complex, meaningless or abstract, people will not feel motivated to go along with the guidelines. Explain the purpose of the change and break it down into simple and specific actions.
Dogma 3: Little changes lead to big changes
➔ Big changes made over a short period of time are often unsuccessful and are usually not sustained in the long-term. People are better at handling smaller changes that are clearly laid out. Consider whether the change process could be implemented in several small steps over a longer period of time.
Dogma 4: Pragmatic implementation of behavioral design
➔ For most of us, behavioral design is a new and complex discipline. It is important to make it as easy as possible to get up and running. Integrate behavioral design into activities, methods, strategies and execution.
We believe that our dogmas would greatly benefit everyone working with change management, so we have made them available through this Creative Commons license agreement. Download the Dogmas of Behavioural Design here.
Putting the Dogmas into Practice
When we work with strategies within the field of IT, we start off with three phases known as scoping, strategy development and execution.
Here are some examples of how behavioral design can be applied to the respective phases.
In this phase, information is gathered, analyzed, and then serves as the basis of the strategic planning process. We examine the business in its entirety, taking into consideration the ambitions, business goals, pains, current organizational conditions and the portfolio of projects. Then we create an overview.
Focus on behavior:
- People tend to be overly optimistic when planning and tend to forget to look at the big picture. This is why we create an overview of the operational load and the scope of the portfolio of projects. With this information, we can determine whether the organization has the capacity to carry out the strategic process and fully execute the strategy.
- When we choose to do one thing, that means there are other things we do not do. This is easy to forget. That is why we subject each business case to a reality check. The opportunity cost is determined by calculating the total costs of developing and executing the strategy. We address hidden consequences of implementing the strategy, such as projects and business opportunities that will not be realized.
- After completing the processes described above, management can prioritize and plan the strategy process and other general activities and use the overall assessment to generate business value. Management determines which specific projects or activities should be cancelled, scaled down or postponed in order to make room for the implementation of the strategy, as well as which ambitions for the strategy and the deadline need to be adjusted.
In this phase, the strategy is developed and documented. We describe strategic challenges, strategic direction and goals, strategic principles along with the coherent actions for execution.
Focus on behavior:
- If we forget to involve relevant stakeholders in the strategic planning, then we risk creating opponents rather than team players and ambassadors. We make sure that all stakeholders are involved from the start and acknowledge their contributions. Showing our respect for stakeholders ensures that the necessary expertise, input and decision power are available.
- A strategy that is abstract, difficult and takes a long time to complete has a greater risk of not make any significant or lasting difference. We make sure that each strategy is concise, easily comprehensible and action-oriented. This increases the chances that the strategy will be read and remembered, understood and used. See the article: A good strategy is concrete and meaningful.
- We usually want too much too fast. This can lead to overconfidence in our skills and productive capabilities; if that happens, the execution of the strategy can easily end up as a fiasco. We ensure that the action areas and methods have a realistic scope and level of ambition within the specified timeframe. This significantly increases the likelihood of successful execution and enduring changes.
The implementation of the strategy in the organization is carried out in specific ways. It is all about leadership, monitoring progress, structured assessment and adjusting the strategy as needed.
Focus on behavior:
- Strategies represent the broad outlines of plans. It is easy to imagine a strategy that automatically turns into immediate action and changed behavior within an organization. In reality, there is a risk that a strategy will turn out to be nothing more than a paper tiger. We ensure that the strategy is converted into specific action plans and measures with manageable intermediate objectives and executable steps. We increase the chances that a strategy is fully implemented and generates the desired value.
- It can be hard to determine in advance exactly what obstacles might stand in the way of the execution of a strategy. Insights like that cannot be found in the corner offices of top executives. We analyze potential barriers to the implementation of relevant plans and measures. This can be done through interviews with employees and key partners who work closely with the core tasks. By asking the right questions, we discover which barriers to remove, and where to add extra friction in order to achieve the desired outcomes. We make it easy to execute the preferred action, and difficult to do what is not preferred.
- In organizations, most people tend to mirror and follow executives and culture bearers. If they do not do what is being encouraged, then the rest of us probably won’t either. We identify and collaborate with leaders, key people and culture bearers with a positive attitude and clearly communicate the priorities of the strategy execution. Most people observe how these people behave and mirror their actions. Modeling desired behavior is contagious and supports the effective execution of the strategy.
About the authors
Kristian Sørensen is CEO & Sr. Principal at IT ADVISORY. As a trusted management advisor and IT strategy expert, Kristian helps organizations set structure and direction for strategic initiatives and projects. Reach out to him at firstname.lastname@example.org.
Sune Dybdal is Ass. Partner at IT ADVISORY. Sune is a business-oriented digital consultant and strategic advisor. Sune is an expert at facilitation, change management and behavioral design. Reach out to him at email@example.com.