Behavioural insights offer the building blocks of organisational cultural improvement

Behavioural insights are being deployed in many spheres. Known by many people as “nudge theory”, they are being used in efforts ranging from fostering greater compliance among taxpayers (by letting people know what proportion of people pay on time) to helping people make better choices at supermarkets (by featuring straight-forward nutritional information).

But behavioural insights can also be a powerful tool for building the desired culture of an organisation.

At the heart of any organisational culture change is employee behaviour and decision-making. Behavioural insights offer an array of strategies for helping employees make choices about their behaviour that align with the desired culture and values of an organisation.

Culture is complex and dynamic. In any cultural change or improvement program, it is important to consider the biases at play – for an individual employee and for the whole workforce. Behavioural insights encourage experimenting with possible solutions to identify what strategies work, where and in what context.

Like a grain of sand that sits at the heart of a shiny pearl, behavioural insights strategies can help to make a cultural change effort attractive, resilient and worth celebrating.

Through our work Nous Group has identified three heuristics that influence employee behaviour, and each of them yield three behavioural insights strategies that can help your cultural improvement effort succeed.

Bounded rationality: Good decision-making requires good information

Bounded rationality refers to the fact that employees will make decisions based on the information available to them, even if it is incomplete or ambiguous.[1] Employees therefore need good information to make informed decisions about how to act and where to invest their time during a cultural improvement effort. That is why communication of information is essential.

For example, Nous partnered with a financial services firm to transform its culture in order to improve organisational performance and the experience of its employees, customers and clients. By providing its stakeholders with simple, engaging and consistent information about the initiative, the client debunked some myths about the strategy and supported effective decision making by leaders and staff.

How can we work with bounded rationality to support effective cultural change and improvement?

1. Provide employees with good information: Typically, information cascades from senior leaders, so managers at every level are critical. Effective information-sharing channels include tool-box talks, all-staff stand-ups, CEO or vice chancellor blogs on an intranet and a manager guidance series. The intention is not to flood employees with information, but to deliver information for each stage of the cultural change journey. For example, an organisation focused on its internal culture may find that, in the absence of information, employees wrongly perceive increased staff turnover. Regularly reporting actual turnover against target turnover will combat this misperception.
2. Simplify the messages: Excessive information can harm cultural transformation, as employees lack the time and cognitive resources to process it. The transformation team should agree on a set of key messages each week or fortnight and tailor those for teams. The number of key messages should be no greater than five, because people struggle to remember more than that. Put the most important messages first and last, as these are the most likely to be remembered.
3. Make information attractive: Employees are more likely to invest time in things that gain their attention, including through colour, images and personalisation. Invest in posters and collateral that describe the desired culture or action plan. Tailor key messages to individuals, teams or divisions prior to dissemination rather than issuing generic whole-of-organisation messages. Personalise emails by simply adding an employee’s name to a group or organisational email. [2]

Social norms: People can only be what they can see

Changing social norms is integral to successful cultural change.[3] Social norms (essentially, what others do) have a powerful influence on individual employee behaviour, and therefore need to explicitly inform any strategies or interventions.

Recently Nous supported the integration of two major government departments. In this cultural change and leadership development project, leveraging the power of social norms was critical to driving cultural change across the new department and ensuring the espoused behaviours become a consistently lived experience for all 14,000 staff.

How can we leverage social norms to support effective cultural change and improvement?

1. Focus on desired behaviour: To achieve the desired behaviours, you need to focus on them. Acknowledge challenges but articulate the desired behaviours rather than the undesired one. When leaders focus on problematic or undesirable behaviours, they may inadvertently reinforce that behaviour.
2. Showcase the majority for maximum effect: Show that most people perform the desired behaviour. For example, when sharing back engagement results, frame in the positive: “Nine out of 10 of your colleagues demonstrate respectful behaviour.” Showcase and recognise teams of people who demonstrate the desired behaviour.
3. Translate organisational values into tangible actions: Value statements alone may be helpful for gaining a common understanding for organisational values and behaviours, but they often mean very little to employees. Help teams and employees make the organisational values relevant by translating the desired organisational values into specific behaviours.

Status quo bias: Better the devil you know

Seen as a common barrier to successful culture change, resistance to change can be daunting for organisational leaders and organisational design practitioners. Status quo bias may be critical in perceived resistance because people are hardwired to prefer the current state rather than accepting change.[4]

We should not think of employee resistance as a by-product of poor change management. Instead, behavioural insights suggest we can expect, and therefore plan for, employee resistance. In partnering with a health organisation to shift its culture to improve organisational performance and the experience of employees, customers and clients, Nous tackled status quo bias head-on by redefining the new ways of working.

How can we overcome status quo bias to support effective cultural change and improvement?

1. Help employees plan their personal response: When launching a cultural strategy or introducing new values and behaviours, ensure you have put in place a process to help team members plan their response and translate a good intention into actual behaviour. In recently launching its cultural strategy, one organisation held a launch day that involved breaking into smaller groups to identify what they, as individuals, needed to stop, start and continue doing as a result of the desired culture. People then created individual action plans. Values or behaviours action planning can be done at an individual or a team level.
2. Make aspirational and core values explicit: During cultural change it is vital to identify and make explicit which values are core values and which are aspirational values. Core values are those already ingrained in the organisation and so guide acceptable behaviour, while aspirational values are those the organisation will need but is currently lacking. Understanding the difference and setting this expectation among employees is critical to combatting status quo bias. [5]
3. Enable employees to use commitment devices: Commitment devices help employees enforce intended behaviours and stick to behavioural goals.[6] While existing performance appraisal processes offer an avenue for individuals to commit to key behaviours, other useful commitment devices in cultural change include ‘values and behaviours’ coffee catch-ups, a virtual or physical commitment board where individuals post weekly actions, email-free days to foster collaboration and scheduling meetings walking distance away from the office to improve wellbeing.

None of these strategies on their own are likely to deliver a successful cultural improvement, but in aggregate they can help break through barriers of resistance. Drawing on these techniques can help turn your grain of sand into an exquisite pearl.

Get in touch to find out more about how Nous Group can help make your cultural change a success.

Written by Deanna Paulin during her time as a Nous Principal.

[1] Simon, H. (1997). Models of bounded rationality. Cambridge (Mass.): MIT Press.

[2] Hallsworth, M., et al. (2014). EAST: Four simple ways to apply behavioural insights. UK Government.

[3] Reynolds, K., Subašić, E. and Tindall, K. (2015). The Problem of Behaviour Change: From Social Norms to an Ingroup Focus. Social and Personality Psychology Compass, 9(1), pp.45-56.

[4] Kahneman, D., Knetsch, J. and Thaler, R. (1991). Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias. Journal of Economic Perspectives, 5(1), pp.193-206.

[5] Lencioni, P (2002). Make your values mean something. Harvard Business Review

[6] Rogers, T., Milkman, K. and Volpp, K. (2014). Commitment Devices: Using initiatives to change behaviour. JAMA, 311(20), p.2065