IT strategies that take people’s habits and behavior into account are more successful. Would you like to know why?
Let me say it straight out. This is an article that I have been looking forward to sharing with you, because in many ways it is the culmination of many years of working with IT strategies and IT-related changes.
Whenever we tell colleagues and clients about our mission to improve the success rate of our strategies with the help of behavioral design, we end up listening to anecdotes about vague strategies, business change failures, a lot of frustration and wasted time.
Our own observations as well as the feedback we have received have confirmed our belief that there is huge potential in combining the best of the classic strategic methods with a more holistic business perspective and in applying the latest research about human behavior when we develop IT strategies and strategic projects. This is especially relevant at a time when the pace of change, complexity and task load are greater than ever before. Design based on the understanding of human behavior is the “missing link” in many IT strategies and change processes, without this the human element the project fails to achieve the intended result.
Making behavioral design an integral part of IT really makes a lot of sense, because when it comes to technical, organizational, process-related and business changes human behavior is the key driver. IT strategies are associated with big expenses, which means that when the strategy success there are greater gains on the investments. When developing new strategies, behavioral design can really smooth the path.
In Denmark, Morten Münster has introduced many to concepts of nudging and behavioral design in his entertaining and informative books about creating change through behavioral design. There is a big difference between acknowledging the potential of behavioral design and actually putting it into practice during a busy working day. How this can be done in practice is a question of great importance, and that is why we are excited to share how we operationalize behavioral design in our approach to strategic IT planning.
The essence of our approach can be summed up like this: We apply knowledge of natural human behavior as a force in the change process and reduce any resistance that works against the change.
By including this human element, we improve our advantages and the increase the chances that the business will implement the IT strategy successfully.
People are rarely rational and logical
But before we present the more practical applications of behavioral design to IT strategy planning, we will start with a brief, not comprehensive, introduction to the basics of behavioral design. We have boiled down it down to these five behavioral dogmas.
Behavioral design stems from evidence-based knowledge of human behavior. We tend to see ourselves as rational, determined individuals who usually think logically and act appropriately, but that’s far from the truth. Human biology has not changed significantly since the last Ice Age. Recent research in the fields of behavioral economics, neurology, psychology and sociology shows that humans have a limited cognitive capacity and limited perseverance. People are greatly influenced by the context, by peer pressure, by our emotions, by judgment and by our habits.
In recent years there has been more recognition that we often act irrationally. In 2002 Daniel Kahneman received the Nobel Prize in Economic Sciences for his ground-breaking research in judgement and decision-making. Since then a lot has been written on the subject, including the book Thinking, Fast and Slow, also by Kahneman. In Denmark Morten Münster is well-known for his bestseller I’m Afraid Debbie from Marketing Has Left for the Day (Jytte fra Marketing er desværre gået for i dag) and the just released follow-up titled Jytte vender tilbage. In these books, we read about many all-too-familiar situations, problems and paradoxes from our own lives, whether professional or private.
Here is Morten Münster’s definition of behavioral design:
“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 Rider, the Elephant and the Path
The Rider, the Elephant and the Path is an analogy that represents how behavioral design should be an important ingredient in every IT strategy and change process. The analogy was conceived by Jonathan Haidt and is described in a Danish context in the book Oplagt – at lede adfærd by Alexandra Krautwald and Mettelene Jellinggaard.
System 2 = Rational intention
System 1 = Automatic human behavior
Path = Circumstances that make it easier or more difficult to make progress
The elephant represents human instincts, habits, and unconscious reactions. The rider represents our logical and rational aspects. With the rider on top, the elephant walks on a path that represents our surroundings as well as the direction we want to take.
In order to get the rider and elephant to head in the desired direction, it is essential that the rider understands the goal and the purpose of the journey, that the elephant thinks that the journey is pleasant and doable, and that the path they take has as few obstacles as possible. The contrast in strength between the rider and the elephant is evident, and the journey will not be as successful if the elephant is not willing to cooperate with the rider and willingly move in the desired direction. Naturally, the elephant prefers the path of least resistance.
In the field of IT strategy and change management, focus has been on the rider, which represents rationality and logic. After all, those traits are dominant in this field. They are important, but they are not enough. Only by applying behavioral design can we put the necessary the focus on clearing the path for the elephant so it is more willing to collaborate.
Incorporate behavioral design into strategic planning
When we work with IT strategy and its execution, we juggle with vast financial resources and mission-critical processes. Our work affects the daily lives of many people at home and in the workplace. By integrating behavioral design into the strategic planning process, we can create even better conditions for successful strategies and projects.
Behavioral design may sound like its expensive and demanding to implement. To that, here are three responses. First of all, behavioral design can be pragmatically implemented – a little is better than nothing. Secondly, over time a little adds up, based on the principle of compound interest. Thirdly, there is a big return on investment by integrating behavioral design right from the start.
To operationalize the integration of behavioral design, we have defined five dogmas that pervade our approach to strategic planning.
Dogma 1: Change requires adequate resources
➔ If a business or its essential employees are fully booked with other things, it will be hard to cross the finish line. Consider whether certain activities can be put on pause or scaled down or if it is possible to increase capacity. Do not initiate a change process without ensuring that necessary resources are in place.
Dogma 2: Changes should be simple, attractive and specific
➔ If a change is perceived as being complex, meaningless or abstract, people will not feel motivated to have anything to take part. Translate the desired change into very specific behavior.
Dogma 3: Little changes lead to big changes
➔ Big changes in a short time span are often unsuccessful are not sustained in the long-term. It is easier for people to handle smaller changes that are easy to grasp. Consider whether your change process could be implemented as a series of small steps over a longer time frame.
Dogma 4: Behavioral design must be integrated systematically in methods and activities
➔ For most people, behavioral design is a new and complex discipline. It is important to make it operational and easy. Consider how the specifically and systematically now behavioral design could be integrated into methods and activities.
Dogma 5: Behavioral design is a supplement to traditional methods
➔ Behavioral design helps to ensure effective, sustainable change, but behavioral design is not a substitute for classic methods of strategic development, project management or change management.
Practical application of dogmas in the strategic planning process
In the field of IT, when we work with strategies, we often turn to the three phases known as foundation, strategy and execution. Here are some specific examples of how behavioral design enters the picture and makes a significant difference as an addition to the other elements in the strategic process.
Phase One: Foundation
The first phase lays the foundation of the strategic planning process and offers an overview with special attention on the business as a whole. We examine business cases, business drivers, organizational circumstances, project portfolios and ambitions.
Examples of behavioral design focus areas
- We get an overview of the operational load and the scope of the project portfolio. On this basis, we evaluate whether the organization has the ability and resources to put the entire strategic planning process into action including the following execution of the strategy, which is often neglected or underestimated.
- We put the business case through a reality check and determine the opportunity cost, which is the total expenses of carrying out the strategic planning process. When we make a decision, it always has implications and effects in other areas, such as other projects or opportunities that cannot be realized.
- When the two points above are completed, we advise the management, who take all factors into consideration and decide whether the strategic planning process should be implemented or not, just as the level of ambition and the time frame must be fixed. Furthermore, management is to decide whether other projects or activities should be stopped, adjusted or postponed in order to create space for the strategy.
Phase Two: Strategy
In the strategy phase, the strategy itself is developed. The strategy describes the strategic challenge, the strategic direction, a number of guiding principles and a high-level plan of action.
Examples of behavioral design focus
- We ensure that the right stakeholders are involved. Besides providing the necessary expertise, input and decision-making skills, it’s all about making sure that the key stakeholders are acknowledged, involved and respected so that they act as partners and not opponents.
- We see to it that the strategy is concise, easily comprehensible, evocative and action-oriented.
In this way we increase the likelihood that the strategy will be read, understood, remembered and used. - We make sure that the strategy’s target areas match the level of ambition and the agreed time frame, and thus ensure the strategy is realistic to carry through.
Phase Three: Execution
In the execution phase, the specifics of the strategy are implemented in the organization.
Examples of behavioral design focus
- We ensure that the strategy is transformed into action plans that are specific with manageable sub-targets and executable steps that are in keeping with the overall goal of the strategy. Doing this increases the chances that the strategy will be put into practice and bring about the desired behavior.
- We analyze potential barriers for the execution of the action plans etc. This could happen through interviews with relevant stakeholders. With this information we can determine which obstacles that could be removed or introduced in order to achieve the desired change of behavior. We make it easy for to do “right” things and difficult to do what is “wrong”.
- We make an effort to identify and create leaders, shareholders and culture bearers with a positive attitude and a willingness to prioritize the execution of the strategy. Many will observe and mirror these people, and that is why guiding their behavior is essential to ensure the successful execution of strategy.
