The Behaviour Business. Richard Chataway

Publishing details

      About the Author

      richard chataway is vice president of BVA Nudge Unit UK and founder of Communication Science Group (CSG), and one of the most experienced behavioural science practitioners in the UK. He has worked in senior strategic roles for government in Australia and the UK, and for the four largest advertising agency groups, addressing behavioural challenges as varied as getting people to stop smoking, join the armed forces, drink spirits rather than wine, prevent domestic violence, pay for university tuition, submit their taxes, buy flatpack furniture, and take public transport – to name a few.

      He has advised clients including Lloyds Banking Group, Google, Atos, IKEA and ITV, and conducted training for call-centre personnel, marketing directors, sales teams, creatives, and everything in between.

      Richard is a frequent conference speaker and board member of the Association for Business Psychology, the industry body that is the home and voice of business psychology in the UK.

      Preface

      What this book is about

      The Behaviour Business is about practically applying behavioural science in business.

      It is intended to be an illuminating guide to how behavioural science can help us answer the key challenges facing business today – and why every business, big or small, needs to truly understand behaviour to succeed.

      If you are looking for a comprehensive academic guide to behavioural science theory, this book is not it.

      Aside from a brief part of chapter 1, this book will not explain in detail concepts and theories from behavioural science, nor will it give a list of the different heuristics, biases and fallacies that seek to explain the curiosities of human behaviour. Fascinating though these are, you do not need a MSc in psychology to read this book.

Who this book is for

      My intention is that this book can be used by anyone who wants to understand how to apply the powerful insights of behavioural science to help them in business. It’s an exciting new discipline which can help you overcome challenges in a huge number of areas: customer experience, marketing, consumer research, retention, recruitment, performance, artificial intelligence or automation, and more.

      I have learnt a lot from a wide range of experts – through interview, working with them directly, and exploring their key works – to bring you the latest and best insights.

      Whether you are a manager, marketer, consultant, entrepreneur, student or salesperson, if you are in business (or have ambitions to be) and are curious about being more successful at influencing the behaviour of yourself and others for business success, then this book is for you.

How this book is structured

      Each part of the book seeks to address a different challenge facing modern businesses. These parts are broken down into four chapters, three that explore a different aspect of the challenge, before a conclusion with key recommendations on what to do now to benefit from these insights. Fascinating theories, experiments and concepts from behavioural science are used throughout – these are taken both from my own work and leading academics and practitioners.

      Where these concepts are particularly important, they are explained in separate sections with examples. If you want to learn more about the science, references and suggestions for further reading are included throughout the book.

      Part one introduces the key concepts of behavioural science, how they have been used to change the behaviour of citizens and how they can (and should) be applied in business. Part two examines how the most successful businesses of the 21st century have used behavioural science to deliver digital products and services. Next, part three looks at how behavioural science can help businesses successfully use the concomitant advances in technology to make business work for humans, as well as robots. Part four looks at how to use behavioural science to recruit, retain and motivate the humans that work in your business. Part five shows how a deeper understanding of human behaviour helps you know what your customers want – and don’t want. And finally, part six explores how to successfully influence the behaviour of those customers – the goal of marketing – before a brief conclusion to reflect on the key themes, and the future.

A final note: I have made extensive use of footnotes. These are intended as asides, additional explanations, trivia and references for those who wish to read more.1 Should you wish, you can happily ignore them.

      1 They also stop me from rambling or going off on unnecessary tangents. Like this one.

      Foreword by Rory Sutherland

      We shape our tools and then our tools shape us.

      For the last few decades, aided and accelerated by the invention of the spreadsheet, businesses and public sector organisations have become disproportionately obsessed with measurement and quantification. There is no activity which is not judged on ‘key metrics’ or which is not subject to regular measurement and comparison.

      ‘What gets measured gets managed’, as the phrase goes.

      Hours are duly spent in defining these measures and in devising ways to ‘improve’ them. In time, this results in more and more perverse behaviour, as people run out of good ideas and learn to game the system instead – since anything that improves a metric is rewarded. Highly intelligent people are strangely susceptible to this failing. Recently it was revealed that Ivy League universities were in the habit of encouraging applications from potential candidates who had no hope of being accepted. The reason? By rejecting these candidates’ applications, the university could improve its ‘selectivity stats’ by allowing it to claim that it accepted a smaller percentage of applicants than its competitors, hence burnishing its elite credentials. It seems almost unbelievable that, in the pursuit of improving a measure, leading universities could engage in the hideous practice of falsely raising the hopes of thousands of young people before dashing them. Tragically this is exactly what they did.

      The practitioners of this kind of ‘McKinsey Capitalism’ usually think themselves great believers in free markets. And it never occurs to them that there is a whiff of Stalinism about this obsession with statistics, and with the pursuit of false proxy targets at any cost. (At one point, chandeliers in the Soviet Union posed a significant health hazard, since the factory was rewarded on the weight of its output – and had responded by producing light-fittings of such extraordinary heft that ceilings were often at risk of collapse.)

      “the pursuit of rational, objective and quantifiable metrics only makes sense if these are closely aligned with the things that your customers care about”

      But this is not confined to communism. In fact, any managerial or bureaucratic culture has an incentive to engage in over-measurement, since the act of quantification allows the manager or bureaucrat to present their decision-making as being rational and objective, and thereby sidestep the risk of blame. The reason this causes problems is that the pursuit of rational, objective and quantifiable metrics only makes sense if these are closely aligned with the things that your customers care about. More and more evidence from behavioural science and behavioural economics suggests that this is a very unsafe assumption. In fact, what consumers care about may have very little to do with the objective qualities of a product or service, and their preferences may differ markedly from those of the representative, single, utility-maximising rational agent who populates all economic models.

      Making decisions on this basis alone may be good for the manager’s career prospects – but commercially disastrous.