A nudge in the right direction

Rory Sutherland is UK vice chairman of world-renowned marketing company Ogilvy. Here he tells Your Ready Business how we all need a little ‘nudge’ from time-to-time in order to do the right thing. This is because we do not always behave in the supposedly “rational” ways which economic models assume we should.

What is a nudge? Nudges are a way of making it easier for people to make better-informed choices, simply by making good choices easier to make. The approach aims to tap into people’s psychology, and to better understand the wider emotional context within which people act, allowing people to make better decisions confidently and instinctively.

Nudges work because humans are not rational calculators, despite what economists would have us believe, and our decisions are based on deep-set, often unconscious feelings and inferences that belie whether a course of action is good or bad when evaluated in terms of narrow economic costs and benefits.

Behavioural science is a study of these idiosyncrasies – the ways in which our unconscious instincts diverge from our conscious deliberations – and there are lots of examples.

People voting in the Scottish referendum on independence were arguably nudged towards exiting the United Kingdom because the vote to stay was a vote for ‘No’. The very framing of the choice in terms of a positive ‘Yes’ or a slightly miserable-sounding ‘No’ affected the vote. If the choice had been between ‘Stay’ and ‘Leave’ then the result would have been markedly more in the UK’s favour. Similarly, had a perfectly well qualified senator fought Barack Obama for the presidency on an austerity ticket using the slogan ‘No We Can’t’, he might have been in the right, but would have lost by a large margin.

(Note that the promised EU referendum on Britain’s exit has avoided the language of the Scottish Referendum, using wording which arguably favours membership of the bloc.)

Nudges in practice

Nudges are at work everywhere we look. We have experimented with them to boost employee wellbeing at my company Ogilvy. In the staff canteen we adapted descriptions of the vegetables so that ‘carrots’ became ‘succulent carrots’. Consumption duly increased.

In retail, products succeed or fail not on the strength of what they do, but how they are presented. I work with the technology company Philips. They have created a great product which cooks food using super-heated air to give it the texture and consistency of fried food, but without using oil. It’s a brilliant invention, but in Britain it suffers from one significant setback – its name. It’s called The Air Fryer, which is fine in Asia where the frying is the dominant form of cooking, but terrible in Britain where middle class people avoid frying as much as possible.

Worse, big home appliance stores may display the product next to deep-fat fryers, on a shelf which health-conscious consumers would instinctively avoid. Sales may have been harmed by the association.

So how do you nudge? First you must understand several counter-intuitive things about behaviour:

Small changes can have a big effect

As we have seen, a small change to the way something is presented or described can make it much more or less attractive to people. Oddly, people often duck making big important decisions because of trivial hurdles: I have never topped up my pension, partly because I can’t be bothered with the paperwork involved. If I could do so using a mobile phone app, I would top up my pension several times a year.

Most behaviour is driven by feelings we don’t fully understand

We only found out about bacteria 120 years ago, but for 100,000 years we have been reviled by the thought of our own bodily waste. Why? It’s because feelings are more powerful than facts; feelings are heritable and intuitive but knowledge must be acquired.

Many reasons we give for behaving in a certain way aren’t true

We take a dimmer or brighter view of a restaurant based on our mood. This is often out of the restaurant’s control, owing more to an earlier argument or not being able to find a parking space than to whether the food or service is good. We can usually answer the question “how are you feeling” but when asked the question “why are you feeling that way” we generally don’t know – often we make something up.

Context is very important

At Ogilvy we needed to come up with a policy on electronic cigarettes. I said I didn’t mind what the policy was as long as it was not identical to that which is applied to smoking. I didn’t want the vapers to end up standing next to the smokers.

Asking vapers to try and give-up smoking while mixing with real smokers in a designated area outside is rather like holding a meeting for reformed alcoholics in a pub.

In the same way, we should probably be aware that giving someone a year’s suspension for driving over the alcohol limit – a year during which they are driven around by friends or take taxis – might dangerously cause these people to drink to levels which cause them to become alcoholic. I have never heard anyone mention this as a possible problem.

Understanding the wider context within which people make decisions and you can start to know what motivates people to act and what ‘nudges’ can overcome inertia and allow people to improve their lives without the need for any coercion. By designing for humans, not for robots, you can get people to eat better, be healthier, drive carefully, avoid debt and any thousands more positive steps – without recourse to the usual bribes and fines.