ROT385

A Playbook for Organizations

Some of the smartest organizations are moving
behavioural insights up the value chain and embedding
them into their everyday processes.
by Bing Feng, Jima Oyunsuren, Mykyta Tymko, Melanie Kim and Dilip Soman

WHILE THEY GO ABOUT THINGS -

every organization is actually in the same business: behaviour
switch to its product; a government agency trying to get citizens
to pay taxes on time; or a health agency interested in improving
the consumption of medication, behaviour-change challenges
abound.
Many organizations struggle to make behaviour change
happen due to a fundamental empathy gap. ‘Econs’ — as depict-
ed in Economics textbooks — are hypothetical individuals who
future consequences of their actions, have immense compu-
tational abilities and are unfazed by emotion. Humans, on the
other hand, are cognitively lazy, impulsive, emotional and com-
putationally constrained. The empathy gap occurs when orga-
nizations design products and services for econs, when in fact,
the end-user is a typical human being.
tive laziness, procrastination and social pressure play key roles in
-
sights works to connect the psychology of human behaviour with
economic decision-making to explain these phenomena.
Over the past 10 years, we have seen a great deal of progress
in the application of behavioural insights (‘BI’). With thousands
of trials being run by hundreds of public and private-sector orga-
nizations around the world, human behaviour has become a key
focus of activity in the policy, welfare and business world.
Inspired by the growing interest in BI from all sectors—
as well the absence of any formal guidelines for embedding
them within an organization — Behavioural Economics in
Action at Rotman (BEAR) has published a ‘playbook’ to help
interested leaders navigate the realm of BI. In this article we
will summarize its key messages, beginning with a description
of the four roles that BI can play to create value for virtually
every organization.

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 We can proactively design a ‘choice context’
to nudge users in a particular direction.
ROLE 1: BI as Problem Solver
Behavioural insights can enable an organization to address prob-
lems arising at ‘the last mile’—those moments where an end-user
directly interacts with your organization or its product or service.
Whether your last-mile issue is a low take-up rate, poor sales or
low conversion rates, BI can be harnessed to make subtle chang-
es to better align your product or service with human behaviour.
One of the key tools that enables problem-solving here is
the concept of ‘choice architecture’, whereby organizations pro-
actively design the ‘choice context’ in such a way as to steer or
nudge users in a particular direction. Following are the four main
types of decisions that choice architecture can infuence:
COMPLIANCE. Getting people to act in accordance with a regulation
set by a government or agency (e.g., tax deadlines, regulatory pa-
perwork requirements).
SWITCHING. Getting people to convert from one choice to another
(e.g., brand switching, replacing soda with water at meals).
FOLLOWING THROUGH. Getting people to follow through on com-
mitments that they themselves have made (e.g., completing a
weight loss regimen, or just acting on intentions).
ACTIVE CHOOSING. Getting people to break undesired habits by
converting passive, mindless decisions into active choices.
It is fair to say that the biggest successes for BI to date have
come in the domain of choice architecture. For example, a few
years ago, Ontario’s Behavioural Insights Unit set out to increase
organ donations in the province. Working closely with project
partners Service Ontario and Trillium Gift of Life Network,
the team’s goal was to increase the number of people who regis-
ter as organ donors.
Initially, several ‘barriers to registration’ were identifed,
including the length and complexity of the registration form,
failure to ask every customer if they wanted to register and ask-
ing customers to complete yet another transaction after they
had waited in line and completed other paperwork. The result:
By removing these barriers — and thereby enhancing the choice
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Management - Indore from Jun 2021 to Sep 2021.
architecture — registration rates increased by 143 per cent. The
organ donor registration process in Ontario was redesigned
based on the following choice architecture principles:
• Provide diferent versions of the donor registration form;
• Change the timing of when the form is handed out; and
• Ofer additional information to help people make their
decision.
ROLE 2: BI as Auditor
At the end of every design process for products, services or pro-
cesses, a behavioural scientist can be tasked with auditing the
outcome and evaluating it for human-centricity. In this role, BI
is used to evaluate and provide suggestions for further ‘human-
izing’ organizational outputs.
The federal government’s Impact and Innovation Unit (IIU),
along with BEAR, recently worked with the Canadian Armed
Forces (CAF) on its goal to increase the percentage of women in
its ranks from 15 to 25 per cent by the year 2026. The team used
a BI lens to audit the following stages of the recruitment process:
THE APPLICATION PROCESS. BI-informed changes were made to the
Armed Forces’ application form to increase clarity and under-
standing. Furthermore, the Department of National Defense
(DND) made improvements to the appointment process and
recruitment follow-ups.
RECRUITMENT MARKETING. The IIU conducted a social media mar-
keting trial aimed at understanding ‘what works’ in engaging
Canadian women with a career in the Armed Forces.
POLICY AREAS AND GUIDELINES WITHIN THE CAF. A number of policy
areas, including deployments and relocation, leave without pay,
childcare support and long-term commitments were identifed
for consideration and BI-inspired improvements.
The result: The collaboration was successful and has re-
sulted in changes to the CAF’s marketing and recruitment eforts
and an increased appetite for experimentation in these areas.
Key success factors included buy-in from executives at both the
 CAF and the DND. This was essential in allowing the IIU access
to the relevant information and in implementing recommenda-
tions. In addition, the IIU was equipped with well-rounded staf
that included both quantitative and qualitative researchers. The
relationship between the IIU, CAF and DND has resulted in con-
tinued engagement and testing. The DND has also recently es-
tablished its own BI team: Personnel Research in Action (PRiA).
ROLE 3: BI as Designer
In this role, a behavioural scientist is involved from the outset,
ensuring that the design of a product, service or process is behav-
iourally informed from the start — which means that the process
always begins with observing actual users in a natural setting.
One of the key concepts in this domain is ‘behaviourally-
informed design’, an approach that combines the principles of
BI with those of Design Thinking. The BEAR team has worked
with a couple of government branches to employ BI to improve
consumer protection. At these agencies, BI is now used to better
understand the behaviour of consumers and agents in diferent
marketplaces. The agency continues looking for opportunities
to apply BI to both its policy design and its daily operations.
Three Truths About Behavioural Insights
1. PEOPLE ARE ONLY RATIONAL TO A CERTAIN EXTENT.
We often assume—sometimes implicitly—that people bal-
ance the pros and cons and assess risks on the basis of all the
available information, and thereby make well-considered and
consistent choices. The behavioural sciences teach us that the
choices people make are only rational to a limited extent. One
example of this is that people are more sensitive to a loss than
to a gain. As a result, they put in more effort and take greater
risks to avoid loss than to win the same amount.
People also follow certain rules of thumb or shortcuts in
processing information. One example of this is the availability
heuristic: for events that we can recall more easily—for example
because they were distinctive or emotional or recently in the
news—we overestimate the likelihood that they will occur again.
These deviations from rationality are partly predictable, which
means we can take account of them in policy-making.
2. PEOPLE HAVE LIMITED SELF-CONTROL. It takes
effort to resist temptation and suppress impulses, and people
have limited available resources for this. They want to eat more
healthily, exercise more often or save for their retirement, but
in practice it turns out to be harder than they thought. One
consequence of this is that there is a major difference between
planning to do something and actually doing it — between inten-
tion and action. Everyone has experienced this conflict at some
point: planning to do some chores but ending up slumped
on the sofa; starting a diet but ending up in a burger bar after
just a week; wanting to save but still going out for dinner.
This document is authorized for use only in Prof. Jatin Pandey,Prof. Kajari Mukherjee ,Prof. Sumit K. Ghosh &Prof. Srinath Jagannathan's PGP-I/Term-I/OB-I/AY: 2021-22 at Indian Institute of
Management - Indore from Jun 2021 to Sep 2021.
Another example of this role is the growing realm of self-
control products. Products and services are being created to
enable customers to close the intention-action gap — whereby
people intend to do something positive but fail to act on it. Exam-
ples include Clocky, an alarm clock that literally runs away when
the sleepy user hits the snooze button — propelling itself of of the
bedside table and across the foor, out of reach of the dozing user;
and Stickk, a website that uses incentives and peer-efects to
encourage people to stick to their goals.
The BEAR team also recently consulted with a government
agency that set out to raise awareness of consumer protection
issues, targeting adult consumers of all ages who were highly
educated, but with limited knowledge of behavioural science.
Working together, we designed its information brochure using
the following BI guidelines:
• Ensuring that the colour and visual appearance were appeal-
ing to the public.
• Balancing image and text ratios to optimize comprehension
and readability.
• Managing the aesthetics of the cover to maximize the likeli-
hood of the brochure being read.
A psychological phenomenon relating to this is that people per-
ceive a reward in the near future as more valuable than a reward
further in the future. This plays a role in trade-offs between pres-
ent and future rewards, such as pensions and savings, but also
with respect to health.
3. PEOPLE ARE INFLUENCED BY THEIR ENVIRONMENT.
In order to determine what the ‘right’ behaviour is, people often
look at the behaviour of others, particularly in new or uncertain
situations. In a classic example of this, researchers conducted
a study in which a group of confederates unanimously gave the
wrong answer to a very simple question. The participant—who
was unaware of this— then conformed by also giving the wrong
answer. The news and government communication often show
undesirable behaviour in order to stress its objectionable nature;
however, often this actually gives the subconscious signal that
this is ‘normal’ behaviour.
It is not just the social environment but also the physical
environment that can have a major influence on behaviour. If fruit
is within closer reach than chocolate, it makes it easier for can-
teen visitors to make a healthy choice. And optically narrowing
stripes on the road prompt people to drive more slowly of their
own accord. The physical environment can also communicate a
particular social norm. An environment with a lot of litter on the
street provides a lot of information about other people’s behav-
iour, and can therefore lead to more litter.
-Courtesy of the Behavioural Insights Network Netherlands
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 The website for this agency was also improved by using appro-
priate language to maximize engagement. For instance, making
sure that the negative connotations of words such as ‘hazards’,
‘risk’ or ‘unhealthy’ do not reduce attention by creating negative
emotions; and testing the balance between visual and text infor-
mation to minimize the risk of information overload. The results
were impressive and included increased trafc to the website; an
increase in public debate and discussions on the site; and greater
public reporting of marketplace frictions.
The following research fndings indicate the breadth of op-
portunities in this domain:
The ABCD Framework for Using Behavioural Insights
A: ATTENTION – Make it relevant, seize attention and
plan for inattention
Attention is the window of the mind. However, attention is
scarce, easily distracted, quickly overwhelmed and subject to
switching costs. Practitioners will often find that attentional
issues have been overlooked in the design and implementation
of traditional public policies. For this reason, when practitioners
find a behavioural problem with attentional issues, it may prove
more effective to design policy interventions that are more
relevant, seize attention and, if this is not possible, think about
how to plan for inattention.
B: BELIEF FORMATION – Guide search, make inferences
intuitive and support judgment
While there is no such thing as too much information in a tradi-
tional public policy perspective, information overload has be-
come a serious problem for the people inhabiting the real world.
For that reason, problems in belief-formation usually go hand in
hand with the vast amounts of information and possibilities that
are put on offer. In this perspective, it is not surprising to find
that some of the biggest companies today are companies built
around information search engines and consumer comparison
platforms. What is perhaps more surprising is that traditional
public policy interventions with regards to problems of belief-
formation have been slow in copying what these companies do,
but instead often try to approach problems in belief-formation
by offering even more information.
C: CHOICE – Make it attractive, frame prospects and
make it social
When making a choice is difficult, people are likely to be influ-
enced by biases and heuristics in their decision-making. ABCD
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Management - Indore from Jun 2021 to Sep 2021.
• Telling people about positive, pro-social things that others
have done (as opposed to asking them to stop doing a certain
negative thing) can produce a fourfold increase in the num-
ber of people being more pro-social;
• Showing people smiling or frowning faces — a small emo-
tional trigger — on their electricity bills improves resource
conservation by 25 per cent; and
• Exchanging similarity-identifying information before a
negotiation can boost the successful outcome rate from 50
to 90 per cent, with an average 18 per cent increase in per-
ceived fnal value across parties.
suggests that researchers look into making preferable choices
more attractive, use framing of prospects and leverage social
identities and norms. The framing and arrangement of pros-
pects is perhaps the most famous, but also the most techni-
cal area of BI as applied to public policy. In facing a series of
choice-options, a person also faces a series of possible futures,
i.e. prospects. While making it attractive provides reasons for
choosing, the framing of prospects influences people to choose
one or another option in subtle ways independent of what is
chosen and why. That is, one option may be chosen over an-
other simply due to the way that choices are presented – either
as a matter of arrangement or as a matter of formulation.
D: DETERMINATION – Work with friction, plans and
feedback and create commitments
Most people know that it is easy to form an intention of doing
something. It is much harder to get it done. However, we do
not always anticipate this and tend to systematically overesti-
mate our own ability in taking the small steps to accomplish
our goals. Thus, choosing to do something is not the same as
succeeding. The world is complex and when any one person
has to juggle multiple goals at once, even relatively small
obstacles may become a reason for postponing taking action.
As a result people tend to procrastinate leading to inertia and
staying with the status quo.
-Courtesy of the OECD Behavioural Insights Toolkit
 ROLE 4: BI as Chief Strategist
In these cases, every touchpoint with an internal or exter- Embedding BIs in Organizations: Four Approaches
nal stakeholder is run from a behavioural perspective. The
organization is human-centric in everything that it does, with Concentrated Diffused
behavioural insight as its main operating principle. Expertise Expertise
In these cases, frms can create BI-informed decision tools
that help agents make better choices by providing feedback,
rules of thumb, computational support, decision support or peer

Application
comparisons. For example, with a mandate to improve fnancial

Narrow
FOCUSED CAPACITY
literacy and facilitate positive behaviour change, the Financial BUILDING
Consumer Agency of Canada (FCAC) started ofering fnan-
cial tools and calculators to educate Canadian consumers and
help them make better fnancial decisions: Its Mortgage Calcu-
lator helps determine a mortgage payment schedule based on
user inputs and allows the user to input diferent pre-payment
options to show them how they can save money; its Budget Cal-
culator helps consumers get a portrait of where their money
Application
BEHAVIOURALLY
comes from and where it is going; and its Financial Goal Calcu- INTERNAL
Broad

lator helps people fgure out how to pay of their debts or reach
their savings goals.
Another example is Evree, whose app connects to your
bank account and helps you save money for things that really
matter to you. It basically employs many of the same behav-
ioural science tactics that other companies use to make you part
with your cash — but uses them to help you make smarter fnan-
cial decisions instead.
All members of the Evree team, including management,
content designers and engineers, are trained to understand the
basic principles and applications of behavioural science. The
objective is for the entire team to resolve problems using a sci-
entifc method and to approach daily operating roles with a BI
lens. According to Stephanie Bank, a behavioural economist at
Evree, “We look at behavioural science as our foundation, not
just as a tool for a designer or a problem solver. All of our staf
members are trained to look at business problems and opportu-
nities through a behavioural lens.”
How to Get Started
Before deciding which of the four domains can create the most
value for your organization, there are two key decisions to
be made:
1. THE LOCUS OF EXPERTISE: whether to set up a concentrated
team/unit within your organization OR to difuse expertise
across the enterprise; and
2. THE LOCUS OF APPLICATIONS: whether to use BI in a narrow
application where they are applied to a specifc geographic
INFORMED
CONSULTING
ORGANIZATION
FIGURE ONE
location or department OR to use BI in broad applica-
tions where it is applied across domains, geographies and
departments.
These two decisions create four main approaches to embedding
BI in an organization.
THE FOCUSED APPROACH. Employment and Social Development
Canada has its own Innovation Lab comprised of behavioural
scientists, data analysts, designers and policy analysts. The LAB
works on projects with internal partners to tackle problems us-
ing a combination of human-centred design and BI methods. Its
full-scale design project for 2017 was the Canada Learning Bond,
which found ways to increase uptake and better understand per-
ceptions of education and fnancial decision making among low
income families.
THE CAPACITY-BUILDING APPROACH. The federal government’s Im-
pact and Innovation Unit (IIU) houses expertise in four areas:
innovative fnance, partnerships and capacity building, im-

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Management - Indore from Jun 2021 to Sep 2021.
 Four Roles for Behavioural Insights

In the Marketplace:
Pre-marketplace: Within the Organization The Last Mile

The Value- Stage 1: Stage 2: Stage 3: Stage 4:

creation chain Define goals, strategy Design and develop Prepare to In-market: End-user
of product and operating principles product, program go-to-market interacts with product,
development or service program or service

Roles that BI BI as Designer BI as Auditor BI as Problem Solver

can play

BI as Chief Strategist

FIGURE TWO

pact measurement and behavioural insights. It ofers services
through a core unit at the Privy Council Ofce and through
the fellowship model, in which scientists are deployed to other
Government of Canada departments and agencies to provide
behavioural science expertise and run behavioural insights trials.
At press time it had deployed fve behavioural scientists across
the government.
acceptance, we expect organizations to start using it to tackle
more complex behavioural and policy challenges going forward.
In our view, BI can — and should — play a key role in important
societal domains such as the environment, business sustainabil-
ity, preventive health, and diversity and inclusion. Consider this
article as a nudge to get you started.

THE INTERNAL CONSULTING APPROACH. The World Bank’s Mind,

Behaviour, and Development Unit (eMBeD) is a behavioural sci-
ence team housed within the Bank’s Poverty and Equity Global
Practice. The team works closely with World Bank project teams,
governments and other partners to diagnose, design and evalu- Bing Feng (MBA ‘19) and
ate behaviourally informed interventions. The eMBeD unit cur- Jima Oyunsuren (MBA ‘19)
rently has 16 employees working on 49 projects across nine the- are Research Associates and
matic areas in 65 countries. Project Leads at Behavioural
Economics in Action at Rot-
man (BEAR). Mykyta Tymko (Rotman Com-
THE BEHAVIOURALLY INFORMED ORGANIZATION APPROACH. As indi- merce ‘19) is a Research Associate at BEAR.
cated by the Evree example, in these cases behavioural science Melanie Kim (MBA ‘16) is BEAR’s Research
is foundational to the entire organization and to all streams of Coordinator and Dilip Soman, the Rotman
School’s Canada Research Chair in Behav-
its work. ioural Sciences and Economics, is the Founding Director of BEAR.

In closing
The early years of BI as a feld were marked by a need to score
quick wins and fnd proof-of-concept for this approach to engi-
neering behavioural change. Now that the feld has gained broad
Editor’s Note: The BEAR Playbook has contributed to the thinking on behav-
iourally based eforts at various organizations, including the OECD, in their work
on the application of behavioural insights to public policy. The Western Cape Gov-
ernment in South Africa and the Impact and Innovation Unit in the Government
of Canada aim to use its content to strategically embed BI into their work.

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Management - Indore from Jun 2021 to Sep 2021.