Behavioural Economics: Think Small. Act Small.

Think small. Act small.

This is my renewed mantra.

And it is completely counter to the approach I’ve taken to life and business for the past 22 years. Thinking big has always been my thing. I enjoy it and it energises me. Acting big, however, has not always been as easy.

I find taking big action quite hard. And so when big dreams, goals and ideas are left to me, I often get stuck. I can be overwhelmed by the enormity of some of the actions required. If I let this last too long I feel guilty for the inaction … and so on. It’s great fun.

Unless others get involved, this has nearly always stifled any progress, and made personal change or business change towards a dream, goal or vision much more difficult.

When others get involved however, magic happens. I’ve gotten better over many years at surrounding myself with teams of relentless, action-oriented executors. And in more recent times, leaders who build their own teams of such talent. I think this is only part of the solution.

The idea of forgoing “thinking big and acting big” for “thinking small and acting small’ seems to have merit.

How Behavioural Economics can help

Behavioural economics, and the science that is growing around it, suggests there are ways to make the actions and changes we desire, easier by creating small and simple changes in our environment to nudge us in the right direction - thinking small, and acting small. Sure, have big dreams and goals, but ‘think and act small’ to find ways to make the pathway towards them easier, and thus their attainment more likely.

Evidence is building in favour of such an idea. 

 

Nudge Theory in Practice

In 2010, UK Prime Minister David Cameron piloted a different approach to public policy to help achieve big things. Cameron was partly convinced that behavioural economics had the potential to unlock some of the big changes he was hoping to achieve whilst in government.  

This was based on the emerging field of behavioural economics, which lists Nobel prize winners such as Daniel Kahneman and Richard Thaler as it’s founders. A field brought to prominence with Richard Thaler and Cass Sunstein’s book Nudge: Improving Decisions About Health, Wealth, and Happiness based on the idea of nudge theory.  

A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.”

Cameron gave David Halpern the green light to establish the Behavioural Insights Team – or what famously became known as the Nudge Unit. Behind closed doors, deep inside 10 Downing St and with two years to prove that a team of people using behavioural insights could achieve dramatic change towards big goals in a minimum of two government departments.

‘Would you like anything else?’ - Nudge theory in action

‘Would you like anything else?’ - Nudge theory in action

Examples of Nudges

At the Behavioural Exchange conference this year, Halpern shared several examples of nudges that have, in the years since, achieved significant social or economic impact in the UK.

One nudge resulted in people paying their taxes quicker! HMRC tested various social norm messages in their direct mail campaign to Self Assessment tax debtors. Some people received letters pointing out that the majority of people in their local area had paid on time, and that most people with a debt like theirs had already paid. Others had no such messages in their letters.

Payment rates from the first group increased by 5% leading to £1.2m more being paid in the first month.

Nudge Theory in Learning & Development 

At an organisational level, we use behavioural science, and nudge theory, in the design of our learning and development programs for our clients around the world – and have been for as long as 10 Downing St.

Action Learning Periods were an idea we first tested and then pioneered in the Australian and SE Asian graduate development industry around 2009. An ALP is a set of simple, carefully curated behavioural nudges provided to a learner over a period of time – often in between workshops – to make behavioural change and learning transfer, easier.

Look out for an article shortly on how Behavioural Science can be used to make learning and development programs more effective in creating change by our Chief Behavioural Officer Alice Scott (MSc, Behavioural Science). As an aside, I’m sure Alice will appreciate that very public use of a ‘commitment device’ - which in itself is a behavioural nudge!

Nudge Theory for Personal Growth

So what about on a more personal level? What nudges can we use in our day-to-day lives to help us take action and make change, easier? I can only share from my own experience and I am curious to hear if you have some of your own.

Here are two really simple examples of nudges I have adopted over the years simply by ‘thinking small and acting small’.   

Wallet sized goals

I have found having my vision, goals and affirmations on a credit card size piece of card in my wallet incredibly useful. Our thoughts become our actions, then our habits, and our results. I realized I had on average, over an hour of time each day where my thinking had little focus or value. There was always plenty on my mind but I wasn’t using it effectively. Think waiting for the train to arrive, waiting in a foyer for an appointment, waiting for the barista to make your coffee, etc.  

Opening my wallet, pulling out my vision, goals and affirmations for a quick 3-5 minute read a few times a day, helped ensure what was most important to me was always top of mind, bringing me energy and focus in the noise of day-to-day life.

Running gear ready to go

I’ve spent the past 10 years building a business, beginning and developing our marriage, starting a life on the other side of the world, traveling fairly excessively, and most importantly becoming a father to three children and experiencing everything that three children five years old and under brings to ones life. 

It’s fair to say I haven't always found early morning starts, easy. And it's even more fair to say exercise over the past decade went out the window. At times where I have decided to run quite a lot, early in the morning, I will always put my running gear out the night before, and right next to my bed. This has made it easy to put the feet on the floor and straight into running gear. A shift in physiology that has made it a lot easier to get out the door and trotting off down the street.  

Think small. Act small. Big Changes.

Thinking small and acting small can have a profound effect on our ability to achieve behavioural change with others, and with ourselves.  

What nudges have you seen that have had a great impact on your own life, your industry or the world around you?