Category: Change (Page 2 of 2)

Behavioral Economics and Change

brain - left and right

Rational vs Emotional

For the past 20 years, I have been exploring how people change their behavior.  This exploration has led me down many different paths and lines of inquiry.  One of the most fascinating areas of research that I’ve investigated surrounds the now hot topic of behavioral economics.

I often describe behavioral economics as the “fusion of psychology and economics in order to gain a better understanding of human behavior and decision making.”

So what do we find out when we fuse psychology and economics together?

“Humans often act in very irrational ways.”

Now that is not ground breaking news for most of us.  Even when I graduated with an economics degree, I knew that people didn’t always act in rational ways – or at least I didn’t  (otherwise why would I stay up watching bad T.V. until 2:30 AM when I knew I had to get up by 7:00 AM for a meeting or why would I spend a hundred dollars on a dinner out but fret over buying a steak that was over $10 at the grocery store?).

However, for many economists, that statement was hearsay.  Many economic models are based on the fact that people act in rational ways to maximize their own utility (i.e.,  happiness).  These theories stated that we might make irrational choices in the short-term, or when we don’t have enough information, or that at least your irrational behavior would be vastly different than mine so that on average, we would be rational.

The truth discovered by behavioral economics is that is not often the case.  We don’t act rationally – in fact, we sometimes act exactly opposite of how an economist would think we should act.

For example, research has shown that we will judge the value of an unknown item using totally irrelevant data to help us in that decision.  Dan Ariely ran a wonderful study where he asked people to bid on a wireless keyboard (something that they were not very familiar with at the time), but before they answered, they had to write down the last two digits of their social security number (a totally irrelevant piece of data).   The results of the bid were fascinating (top 20% being SSN that ended in 80 or above, the bottom 20% being SSN that ended in 20 or below):

Anchoring results

This is a significant difference in how much they bid – entirely based on the last two digits of the SSN.

Here’s another one.

Would you work harder for a set amount (say $10) or for an uncertain amount (say 50% chance of $10 or 50% chance of $5)?  Most rational people would say that they would work harder for the guaranteed payout of $10…that isn’t the case.

In a study that looked at drinking a large amount of water in two minutes – some people were offered a $2 fixed amount for finishing it – the other group was told they would earn either $1 or $2 (random chance of either).  So what was the result?

Behavioral Econ Uncertainty

43% completion rate for the certain award versus 70% completion rate for the variable?  Not what you would think right?

Note – that this doesn’t apply to people choosing to participate – existing research suggests that we prefer certainty over uncertainty when deciding if we should opt-in for a goal.  However, uncertainty is more powerful in boosting motivation en-route to a goal.

So what does any of this have to do with change?

We so often want to drive change in ourselves or our organizations and think through the process of this – in a rational and systematic manner.  I’ve worked with companies who are baffled that they don’t see a long-term increase in employee productivity and satisfaction after they increase their wage (Hedonic Treadmill Effect).  I know people who have mapped out their exercise routine for the next day, only to hit the snooze button instead of getting up and going for their morning run (Hyperbolic Discounting).

Too often we try to implement a change program based on a belief that we are rational beings.

Behavioral economics highlights that this just isn’t the case.

Read More

Willpower – is it the key to change?

I’ve been reading a lot of books and articles lately on willpower.  It is incredible the new research on willpower and how we can build our willpower reserves up and how they get worn down.  I am fascinated by the larger impact of this research and the implications that it has on our ability to change.  It is fairly evident that the more willpower one has and that one applies to their change process, the more likely that change will occur.

So how do we build up our willpower muscle and use it most effectively?   This is probably old hat to many of my readers, but here are some of the key take-aways that I’ve learned from this research:

  1. Willpower is like a muscle – in that it can be built up with repetitive training, but also in that it wears out the more you use it during the day.  Every time we resist some temptation – whether that be not eating the donuts that your coworker brought to the meeting, holding off on looking at that latest text ding, or not blowing up at your boss when he is making some really stupid demand for the 10th time in the day – we use up some of our willpower.  Research shows we more easily give into temptations or lose our cool at the end of the day than we do at the beginning.  That is because our willpower muscle is fresh in the morning but gets depleted throughout the day.
  2. Set up some rules or change the environment to decrease temptations in your life – this will provide you with greater willpower over the course of the day.  If you can make it so that you are not having to actively resist a temptation – either because you have a set of rules (i.e., I don’t answer texts at work) or alter the environment (i.e., turn off your text alert on your phone when at work) you will preserve your willpower longer.  Of these two options – changing the environment may be the harder one to initially do, but is the more effective of the two methods.
  3. Willpower requires energy – specifically, glucose.  We tend to have less willpower when our bodies are hungry or glucose deprived.  Counter-intuitively,  quick hit of chocolate can help you stay on your diet!  The brain takes up about 3% of our bodies mass, but uses about 20% of its energy.  Willpower is one of things that uses up a lot of that brain energy.
  4. Willpower is revitalized after rest / meditation –  we can increase our willpower throughout the day by relaxing our brain and letting it rest.  Meditation has been shown to be one of the best ways to revitalize our willpower.  Meditation also is a great training method to help increase our willpower.  Practicing purposeful breathing and not letting outside thoughts enter into our mind is a great training method for our ability to concentrate and keep out outside distractions (i.e., willpower).

There are many more wonderful insights that can be gleamed by this new research.  I encourage you to read two books:

  • Willpower: Rediscovering the Greatest Human Strength.  Roy Baumeister & John Tierney
  • The Willpower Instinct: How Self-Control Works, Why it Matters, and What You Can Do to Get More of It.  Kelly McGonigal

Change is Hard – So What Did I Do About It?

Today I'm Motivated ToLast week I wrote about how I have not kept up on my own goal of writing a book on achieving goals (i.e., change).

Ironic?

Yes…very ironic.

As mentioned, over the past two years I’ve been researching how people change.  That research indicates that there are six major components that help people achieve purposeful change.

In reviewing my own lapsed change goal of writing five pages a week, I found that I had only leveraged two of those six components.  Doing the math, that means that I was not doing four of the six.  Those were:

1. Writing was not an emotionally driven goal – it was a rational goal

2. I had not established a habit around writing

3. I had not changed my environment to help facilitate my writing

4. I did not have social support network set up to help me

Last week I identified two of those six as easy fixes, one as moderately easy and one as very difficult.  Here is my work to date on those:

My easy fixes (weren’t so easy):

4.  Social support network.  In response to this, I talked to my wife and asked her to help me on this by holding me accountable.  She refused.

Yes, that’s right, she said, “no.” 

Read More

Change is hard (4 ways I defeated my own change process)

Change is hard

Change is hard

For the past two years, in addition to my regular day job, I’ve been researching what it takes for people to make meaningful and purposeful change.

It has been fascinating.

I’ve talked with a number of people about their change journeys.  I’ve read countless books and journal articles on change.  I’ve been introduced to a number of new insights from neuroscience, motivational theory, behavioral economics and habit formation that, when brought together, can have a huge impact on how people can effectively change.   I have identified what I think are six major components that help drive successful change.

I’ve lived this, breathed it, and dreamed it…

And yet…

I’ve not been able to keep my own change habits going.

At the beginning of the year I had set out to write five pages a week on change (not quite a New Years resolution, but very close).  I thought that would be a manageable goal and one that would allow me have enough material for a book on change by the end of the year.

Five pages a week isn’t even a page a day – how hard could that be?

Well it was hard.  Very hard.

Read More

It’s all about people

“ The bottom line in all of it is that, in life, it’s all about people.”  Colin Powell

I saw Colin Powell speak way back in the 1990’s and I can still remember one part of his speech.  He talked about how he had two dogs – a small dog and a big dog.  He stated that his small dog was the alpha and had no fear.  He stated that this was because the small dog’s only reference point was the big dog.  It looked at the other dog, saw that it was big and powerful, and assumed that it must be big and powerful itself.

It is often the same with people.  We tend to use the people around us as reference points on who we are.

A study published in the New England Journal of Medicine showed that, “A person’s chances of becoming obese increased by 57%  if he or she had a friend who became obese in a given interval.” (Christakis & Fowler, 2007).   The theory of self concept explores how we view ourselves – which is shaped by who we hang out with and who we surround ourselves with.  Jim Rohn states, “You are the average of the five people you spend the most time with.” 

So it’s all about the people you surround yourself with.

Do they have a positive outlook or a negative one?  Do they work hard or not?  Do they live life to the fullest or complain about what they are lacking?

So ask yourself this – who is in your circle of friends?

 

We need your thoughts and experiences on change and achieving your goals

We are looking for input from people like you to answer some questions on how you were able to change something in your life or set out and achieve a goal.   We want to understand how you were able to lose weight, get a promotion, start a new hobby, eat healthier, change a bad habit, start a new positive habit, complete a project, etc…).  We are trying to uncover the underlying factors that help people purposefully changed a behavior or attitude.  This research will be used as input to a model of change that we are developing as well as possible inclusion in a book we are writing on the subject.  In the comment section, please share the following:

1) What did you purposefully set out to change or achieve?

2) What was your motivation that drove you to that do this (was their a specific trigger or was it something that you had focused on for a long time)?

3) What were the key actions that you took to achieve that change or result?

4) Did you change things in your environment to achieve this (i.e., move the treadmill into the bedroom or hang a progress chart on the wall)

5) Did you tell people (or a single person) what you were trying to do?

6) Did you set milestones to your goal?

7) Did you measure your progress against those milestones?

8) What was the hardest part about the process?

9) What was the most important part of your change journey?

10) What tips would you give for someone else who is trying to change this aspect of their life?

Leave your response in the comment section 0r send me an e-mail at kurt@lanterngroup.com   – Thank you!

Page 2 of 2

Powered by WordPress & Theme by Anders Norén