Behavior Science is starting to transform the way we run organizations

HR for Humans: How behavioral economics can reinvent HR

Nothing for money: A behavioral perspective on innovation and motivation

Behavior Science, according to Wikipedia, is a catch-all phrase for describing

The systematic analysis and investigation of human … behavior through controlled and naturalistic observation and disciplined scientific experimentation. It attempts to accomplish legitimate, objective conclusions through rigorous formulations and observation

For many decades businesses operated under the critical assumption of classical economic theory that people are fully rational. Behavior science adds constraints to this purist approach on three key dimensions:

  • Bounded Rationality – our cognitive abilities are not infinite
  • Bounded Willpower – we sometimes take actions that conflict with our long term best interest
  • Bounded Self-Interest – we are not solely motivated by our economic self-interest. We also care about things like pride, fairness, and the greater good

The existence of these “three bounds” leads people to behave “irrationally”, from a pure rational economic perspective.

The first aspect of business that started incorporating these insights was marketing, using the work of Robert Cialdini and many others. The famous Campbell Soup experiment, using a false sense of scarcity to increase soup cans purchases dates to the early 80s.

But recently, focus started shifting inward, towards modifying organizational practices, policies and programs to reflect our best understanding of human psychology.

This is a topic that a whole website can be dedicated to (and many are). I’ve been watching it closely for the last couple of years and applying insights from it whenever I can.

I’m bringing this up now, because the links above suggest that we’ve reached an exciting milestone on the adoption curve. In the past I’ve seen powerful thought leadership on this front coming primary from behavioral science experts and early evangelist. The fact that a consulting juggernaut like Deloitte is starting to put some pretty compelling materials together on this topic, suggests that we’re one step closer towards broader adoption of these ideas and practices.


Behavior Science is starting to transform the way we run organizations

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