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Navigating Uncertainty: Enrich

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The importance of benefits before costs

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That last doughnut won’t eat itself, just one more episode and then I’ll sleep, that 5k can wait till the weather’s a bit better… everyday we’re faced with decisions that test our self-control. Decisions that have benefits that are immediate and future costs we can just put to one side.

When you’ve got a decision to make and the instant benefits are staring you in the face, it seems like an easy choice to make.

It’s something Richard Thaler and Cass Sunstein touch on in Nudge, a book that’s really transformed the way individuals, companies and governments look at the world.

They break it down into ‘investment goods’, things like flossing, exercising, and dieting, and ‘sinful goods’, like alcohol, brownies, and smoking, highlighting that the benefits of all of these are easy to recognise in an instant, while the consequences are far away and hard to define.

Choice architecture

Thaler and Sunstein talk about the framing of choices and default options – an idea known as choice architecture. In simple terms the way a choice is presented will influence how it is made, and thus choice options can be designed to influence the choices people make.

If you frame choices in the light of benefits rather than costs, people are more likely to respond positively. Take a litter campaign, you’re more likely to get a response if you engage people with the benefits ‘Put litter in a bin to keep your community tidy’ than threatening people with the costs, ‘£100 FOR DROPPING LITTER!’.

 

Overcoming the default choice

When it comes to clients and consumers, it’s human nature to default to the easy option, to the choice we recognise and can see the instant benefit in.

So if you’re selling services, you need the benefits of those services to be so obvious, so impossible to miss, that they appear to be the default choice. Especially if your services are those that don’t on deliver instant results but will bring real future returns. Your strategy and messaging need to be so powerful that they override the myopic urge to go for the short-term rewards.

 

Nudging behaviour in your team

Speaking to benefits rather than costs is a great approach to leadership too. Take the classic example of timesheets, the scourge of many an agencies life. No-one likes filling them in, so the passive aggressive email is sent out, threatening the cost of withholding Friday beers, in the hope at least some people will get a few details filled in before the end of the day.

But really Friday beers have nothing to do with timesheets, they are a benefit earned from a week of hard work – the same hard work that has probably kept your team from filling in their timesheets. So instead of an aggressive email at the end of the week outlining the costs, little nudges through the week reminding your team of the benefits are likely to have a greater effect. Remind them what the act of filling in timesheets contributes to, the benefits of filling them in as you go along, maybe even incentivise completing them daily rather than penalise them not being filled in weekly.

It’s a simple example but one that shows how highlighting the benefits and not focusing on the costs of behaviours can subtly lead your people to adopting behaviours that benefit the whole team. Persuading people towards the benefits of better choices, rather than mandating behaviour is more likely to lead to lasting change.

 

Change for the better

And whether it’s the decisions that test our self-control on an individual level, or the strategic decisions that steer the direction of our team, the more aware we are of the choices we are making and the benefits they bring, the more we can use our influence to create change for the better.