I want you to want to learn. Is Behavioural Economics the breakthrough we’ve been waiting for in L&D?

In this article, =mc’s Senior Learning & Development Consultant, Philly Graham looks at an important new framework, behavioural economics, and what it can teach us in learning & development.

At =mc we are constantly reflecting on what could improve training and development initiatives, especially in terms of supporting real change in organisations.

A challenge that is often cited to us is how best to achieve participant engagement, not just during training programmes but ahead of, and then following any development. Engagement is essential in order to create real behaviour change and encourage self-development. We know that when high levels of engagement are achieved, it can have a huge impact on learning transfer and so have a bigger impact on organisations and teams. People are also more motivated to get the most out of their development. So how can this best be achieved?

To answer this question, we have been taking a closer look at one of the rising schools of thought, behavioural economics to see what, if anything, it can teach us in learning and development.

So what is behavioural economics?

Traditional economics argues humans are rational beings who show they are acting rationally by conducting benefit/cost analysis, assessing the usefulness of options, and then making decisions. This is how we like to think we choose where to live, approach our career options, what we want to learn, and even frame our ‘healthy selection’ at restaurants.

Behavioural economics on the other hand says we are sometimes rational, but most of the time our rationality is limited by: our ability to work things out logically, the large amount of information available, the limited relevant knowledge we have, and our own lack of time and energy. In these cases – whether we are deciding on donating to charity, buying services or goods, signing up for events, or even considering dating choices – we make decisions based on mental short cuts, or heuristics.

These heuristics form part of the framework developed by psychologist Daniel Kahneman, regarded as the founding father of behavioural economics as a discipline. His book summarising his award winning ideas, Thinking, Fast and Slow (2011), and a body of wider work, has influenced what we know about decisions, risk, and even happiness.

Over the past year, =mc Director, Bernard Ross has been sharing his research in this area across the world from Holland to the USA, particularly looking at how this decision science has an impact on how the sector approaches its fundraising efforts. He has recently written a book on the topic with Omar Mahmoud, Chief of Market Knowledge at UNICEF International. (UNICEF are using behavioural economics to help engage supporters more in campaigns and fundraising with some success.)

If you are interested in understanding more about behavioural economics, we suggest you read this article first.

So what does this all mean for learning and development?

In order to explore behavioural economics further and question its place in learning and development, we held a thought leadership event earlier this month.

At the event, we shared some of the key heuristics of behavioural economics with L&D practitioners from organisations across the non-profit sector, from the British Red Cross to Arthritis Research UK, and Macmillan to UNICEF.

During the session we focused in on three key heuristics:

Heuristic	What does this mean?
1. Anchor it	People respond, often unconsciously, to an initial stimulus in their subsequent choice. So by carefully planning stimuli in situations we can influence the choices they make. For example by asking someone for a big initial commitment e.g. being a volunteer for a year, which they inevitably turn down, they will often respond more positively to a follow up ask of a day’s volunteering.
2. Put it in a Frame	The context or frame in which something is experienced makes a difference to the result. So by being clear on how we frame a choice, we can influence how people reach decisions. For example by suggesting that something costs less than the price of a cup of coffee a day e.g. £2.50 – an investment seems more reasonable than a full year cost of £900.
3. Make it Social or Normalise it	A person is more likely to take part in something if it seems normal for another relevant person to do it. For example, by offering employees a small gift and a personal email from the CEO asking them to contribute to an employee giving scheme, an organisation was able to improve participation from 5% to 17%.

We also mentioned the following additional heuristics:

4. Make Progress	We like to see progress to a result and to contribute to it. Therefore, giving people a sense of progression informs their response. (Think of how a download bar encourages you to wait for software to work.)
6. Avoid Loss	A very basic piece of mental programming means we are keener to avoid losses than to avoid gains. Sadly that means portraying the negative consequences to you of not attending a learning session could be more important than the positive vision of what the session could give you for attending.
7. IKEA Effect	We ascribe a high value to anything we have been involved in making, and this is out of proportion to its true value. (As in IKEA furniture we have assembled.) To engage members of staff more, ask them to get involved – focus groups are a good way to increase engagement.

Note there are many other heuristics. Some scientists estimate there may be as many as 150 of these.

We then looked at how an awareness of these heuristics might help L&D with increasing participant engagement, and therefore ultimately behaviour change.

We asked L&D practitioners to consider three areas:

1. Before a training course – when analysing training needs or designing programmes
2. During programmes – when communicating programmes and in the classroom or on workshops
3. After development initiatives – when participants are back at work and faced with real life challenges

Before

What we tend to do – ‘the traditional approach’: People know what skills they need to develop; therefore ask them what L&D or training they need this year, often as an open question. This is usually a question on the back of appraisal forms.

The problem: this is ignored, or provides L&D functions with an overwhelming amount of data that is not structured, or even useful. Ultimately this doesn’t help organisations provide value for money when it comes to training, as participants may not fully consider the results the training may deliver.

Behavioural Economics would say…

1) By ‘framing’ L&D solutions differently we can influence participants to take more ownership of their learning from the outset. Suggestions included:

• list learning and development options using a frame of what senior leaders are looking for when considering staff for promotion or more responsibility. For example, if they need staff to use more influencing techniques, list this as an option rather than the traditional ‘open box’ approach.
• ask staff to create a ‘business case for development’ to help them link the importance of their learning. For example including questions on the benefits of a particular development they are interested in, how they will transfer the skills, and what benefits there will be for them and the organisation.
• when displaying options, consider the language used to frame them. For example using “masterclass” or ‘advanced level’ instead of “training” may engage more senior members of staff or encourage aspirants.

2) By ‘anchoring’ training as something that is important and relevant, we can help participants consider the contribution their learning will make to the wider team or organisation. Suggestions included:

• when inviting requests for training from staff ensure that the question links to the organisational strategy, anchoring the importance of this link in their requests. For example ask managers ‘what skills and behaviours do you need to deliver your team’s strategy this year?’
• similarly anchor in the link to individual objectives. For example asking the question ‘what will help you meet x objective this year’.
• find some data that reinforces the behaviour you want. So ‘80% of Europe’s most profitable/high achieving companies train people in this approach’.

3) By making learning and development ‘normal’, it is seen as something that should be done, rather than a nice to have or a burden on busy workloads. Suggestions included:

• talk about how other people have gone about learning in the organisation and share examples. For example saying ‘60% of managers who attended have found this course / bite size talk / peer mentoring approach really useful in their roles’
• switch it round to their way of thinking – showing how what is on offer links with staff needs. For example saying ‘we know you want accreditation for your learning, so we have developed this ILM recognised programme especially for you’

During

What we tend to do – ‘the traditional approach’: we publish the courses on offer that year and invite staff to sign up, with their manager’s approval. Or we target key members of staff in need of some development.

The problem: the development isn’t prioritised in people’s diaries and there may be no shows on the day or a lack of engagement in the room.

Behavioural Economics would say…

1) By ‘framing’ the communications that are sent to staff about development opportunities differently, we can influence participants to be more engaged when they are in the room. Suggestions included:

• offer limited places on courses being advertised internally, so they are framed as a scarcity. (‘Last three places”) This is linked to the loss aversion heuristic, that people will be more worried about what they might lose than what they are set to gain. In communications consider using phrases such as ‘last few remaining spaces’ or ‘don’t miss out!’; let staff know the cost the organisation is set to lose if they cancel at the last minute; or communicate what staff are set to lose rather than gain by attending the programme.
• limit choice: advertise only two or three training courses at a time, rather than the whole 12 month calendar, so people are not overwhelmed by choice. In the room, give limited choices for learning. For example “either you can have a break now or at 3.45pm.”
• ask those attending to do some pre work, so they already feel invested upfront. This is linked to the Ikea Effect heuristic. And make it fun to increase the number who actually do it. For example use a quiz such as “what type of procrastinator are you?”, if they are attending a Managing Multiple Priorities course, and explain that on the course they will learn how to stop procrastinating.

2) By ‘norming’ the experience of the actual programmes. Suggestions included:

• using quotes from past attendees, and people who are ‘influential’ both internally and externally, to talk about what they took away from a similar programme.
• share insightful data on their peer group. For example ‘90% of FTSE CEOs are excellent at time management’ or ‘UK Fundraising Directors rate emotional intelligence at the number one skill for success’.

After

What we tend to do – ‘the traditional approach’: encourage participants to take their action plan forward and seek support from their line manager or fellow peers from the programme to ensure continued learning. This is often following a session on action planning during the programme and a suggestion of next steps to enable learning transfer.

The problem: this is often ignored, or not prioritised by participants once they return to work.

Behavioural Economics would say…

1) By ‘anchoring’ higher expectations of how staff will take their learning forward, we can encourage a higher uptake of non-classroom learning transfer. Suggestions included:

• when setting up paired peer mentoring encourage participants to meet more regularly. For example rather than suggesting at least one meeting, suggest three or four. Anchoring in this higher number will mean participants will be more likely to meet more often.

2) ‘Normalise’ the on-going learning opportunities by showing others, who are like them, have got benefit from these. Suggestions included:

• if running repeat programmes, including testimonials and blogs from former programme attendees on the action learning sets, coaching or mentoring opportunities they took part in and the benefit of these in their day to day roles. These should, where possible, be targeted to key roles, so participants can relate to the individuals as much as possible.
• if running modular development programmes, including testimonials from current participants in between modules, showing the benefit of the development in their role. This also supports the heuristic of showing progress.

3) With the ‘Ikea Effect’ in mind, encourage participants to take an active part in their own learning. Suggestions included:

• rotating the ownership of the peer support learning activities. For example rotating the facilitator role in an action learning group or rotating the role of the session organiser.

A final thought…

So is behavioural economics the silver bullet we’ve been waiting for in learning and development?

Well, the ideas above are not rocket science. However, what behavioural economics can teach us is about how people make decisions and why. This then enables us to better prioritise how we assess, communicate and roll out our learning and development initiatives.

With that in mind, what this school of thought can help us with is:

• prioritising key messages
• increasing engagement in initiatives
• changing staff behaviour

While making sure that the insights are used wisely and we are:

• not tricking people
• ensuring the data used in communications is actually true

What’s next?

Contact us online for more information on how we can help you to think about how to use behavioural economics in your learning and development practice or call Philly Graham, Senior Consultant, on +44(0)20 7978 1516.

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