Behavioral Science Clearly Works, But How Should You Apply It?

There are many ways behavioral science - which is defined by the American Psychological Association as the use of observation and experimentation to study human and animal actions and reactions - can be applied in business.

Improving your understanding of the various factors that drive people's day-to-day decisions and activities can lead to positive outcomes such as:

• More persuasive and effective marketing
• Stronger relationships with your employees
• Greater influence over customer actions and choices

If behavioral science is currently an alien concept to your organization, but you're interested in how you might be able to apply it in the future, it's worth looking specifically at how certain practices could be used and managed within your company.

1. Optimize performance management

Ongoing performance management should be a priority for your business - and the HR department in particular - if you want to get the best out of your people and deliver an enriching, fulfilling experience for your staff.

But getting it right isn't necessarily easy. You need to have a good understanding of concepts like what incentives and goals you should put in place to effectively motivate people, which is where behavioral science comes in.

Exploring this area will introduce you to ideas such as goal-setting theory, which advocates premises such as:

• Goals are more effective and motivational if they're clear, specific and have an element of difficulty, as opposed to being vague and undemanding
• Setting unambiguous and measurable goals with a deadline can help to prevent misunderstanding
• Goals should be realistic but challenging, so people have a sense of accomplishment when they achieve them

2. Encourage innovation

Innovation can help your company become more successful. It can lead to new, more effective solutions to your biggest challenges and set you apart from your competitors.

Research has outlined a clear business case for innovation. Boston Consulting Group has been ranking the world's most innovative companies since 2005, and in 2020, the revenue of a typical 'small' firm on the list was $30 billion - up more than 170% from $11 billion (in constant dollars) in the very first survey.

If you have an ambition to be more innovative, behavioral science can help by improving your understanding of how organizational factors and characteristics can affect people's psychology, and consequently promote or discourage innovative practices. A tolerant, open-minded company culture that helps people feel safe to express new ideas will be more conducive to innovation than one that relies on rigid structures, hierarchies and traditional ways of working.

3. Guide customer behavior

Behavioral science can help you achieve a deeper understanding of why people make certain decisions and take particular actions, which can be highly valuable in terms of customer journeys and choices.

In an article for Behavioral Scientist magazine, Scott Young, CEO of the BVA Nudge Unit, said many businesses fall into the trap of setting broad objectives such as 'getting more people to use our product.’ A better approach is to view your overarching goals through a behavioral lens, and to think about specific changes in customer actions and decisions that you can encourage to make progress towards these aims.

He highlighted the example of a digital payments company that concentrated on the behavioral opportunity of moving people from cash to digital transactions for low-value, everyday purchases. With this in mind, it focused on reminding customers of electronic payment options at newsstands and kiosks, highlighting the benefits available at the moment of decision.

4. Use structures and frameworks

Established structures and methodologies could help you get to grips with behavioral science and take a formal approach to incorporating it into your everyday operations.

One example is the East framework, which states that any efforts to bring about changes in behavior should be:

• Easy: As hassle-free as possible
• Attractive: Accompanied by some sort of incentive or reward
• Social: Connected in some way to peer networks or relationships
• Timely: Delivered at a time when people are most likely to be receptive

Some of these ideas also feature in the Mindspace framework, which focuses on nine forces that can affect behavior in various contexts:

• Messenger: People are heavily influenced by the source of the information
• Incentives: Responses to incentives are based on fundamental priorities such as wanting to avoid losses
• Norms: Individual decisions are often steered by what others do
• Defaults: The tendency to choose pre-set, easily available options
• Salience: Novel things that have a specific relevance to an individual are likely to draw their attention
• Priming: Actions can be influenced by subconscious triggers
• Affect: Emotional associations have a big impact on decisions
• Commitments: People behave in a way that is consistent with their promises to others and reciprocates actions towards them
• Ego: Individuals favor actions that make them feel better about themselves

If you're taking your first steps into the world of behavioral science, these structures could provide a useful starting point and give rise to new ways of thinking about management, marketing, HR and business as a whole.