At interstitio we believe that organizations are complex social problems. Invariably, with such complexity comes greater opportunity for blunder. It doesn’t take a PhD to recognize that humans, in their beautiful complexity, often operate irrationally, inconsistently, and in direct opposition with their end goals.
It’s entirely understandable that we act as such, given the sheer (and ever-increasing) volume of decisions we face each day. It would take some serious cerebral hubris for one to believe that they could make the smartest choice every time and in every case. Whether it be from pure laziness or an inundation of information that we don’t have the time and wherewithal to sift through, humans are bound for error. Hence, a well-placed nudge. Thaler and Sunstein define a nudge as “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.” (Nudge, p6) They clearly delineate the difference between nudges and mandates: one enhances your ability to choose wisely, while the other makes the wise choice for you. Nudges can serve as wonderfully pragmatic alternatives to many of the expensive, invasive, and inefficient traditional policies already in place.
Nudges aren’t just for the faint of brain—human nature ensures that each one of us will fuck up with at least some regularity. People who could benefit from a nudge here and there include those who are tired, busy, ill-versed in legalese, or anyone whose brain doesn’t operate like a computer. For a grand total of… everybody. Yet nudges are inexplicably underutilized in a variety of fields, from government and healthcare agencies, to those saving for retirement or college, and even as a part of conservation efforts.
Take, for example, a nudge for better waste management created by the designers of cigarette receptacles. The biggest issue they faced with their product was that people, in their glorious indolence, were choosing to place their cigarette butts directly on top of the receptacle rather than inside the collection slots. The solution? Change the design of the box so that it offers a slanted top, effectually removing the option to place your butts on top of it. This nudge didn’t do much in the way of reducing people's’ freedom (some still chose to toss their cigarettes elsewhere), but it saw resounding success among those who chose to dispose of their trash responsibly.
Okay, so nudges are proven to be effective, but are they actually cheaper to employ than traditional means? In most cases, yes. In fact, some studies have shown the cost effectiveness of nudging to be 100, up to 1,000, times greater than more traditional means. If you want to see a full quantified comparison of the cost effectiveness between several types of nudges and their traditional policy equivalents, check out this awesome paper published by Psychological Science in June of 2017. Of course, there are still many situations where laws and mandates are necessary, but there’s a strong case to be had for the use of laws in conjunction with nudges. It’s highly encouraged that people try to measure the effectiveness of their strategies so we can quantify the true disparity between nudges and traditional modes of intervention. If you don’t happen to be a statistics wiz, though, don’t fret. This is where we can help.
(This is from our intrepid intern, Elizabeth (Libby) Blank).