Using Behavioural Science to Improve Decisions

AROUND THE WORLD, a growing number of organizations are embracing behavioural insights to design and enhance their products, policies and services. The challenge is this: Their leaders and workers are human, too, and are therefore influenced by the same heuristics and biases that they are attempting to address in others.

In our work we have identified three core activities of policymaking and strategy-making in any industry: noticing, deliberating and executing. In this article we will focus on the first two stages — noticing and deliberating — and discuss some of the most important behavioural insights that have been discovered to date in each category.

CORE ACTIVITY 1: Noticing

Noticing involves the varied ways that information and ideas enter the agenda for organizations. Two of the most significant areas of bias and resulting behavioural insights in this area involve framing and confirmation bias.

Framing effects refer to the fact that the presentation of an issue, not its substantive content, often determines whether it is noticed and how it is interpreted. Framing is the process of selecting and highlighting some aspects or features of a situation at the expense of others. Adopting different ‘frames’ can have powerful effects on how people perceive a problem and what they consider to be relevant facts. For example, identical policies can be framed in terms of gains or losses, and the research shows that even small changes along these lines can tap into deep feelings of — the tendency to strongly prefer to avoid losses over acquiring gains. A simple example is feeling more upset at losing $20