Notes from Nudgeapalooza: How Organizations Can Use Data to Influence Behavior

Posted by Melissa Cavanaugh on December 18, 2018.

Capital H has shared two installments covering insights from Deloitte’s Nudgeapalooza conference: First, a look at the potential impact of nudging and other techniques from behavioral finance; second, emerging insights on interventions that can make the most lasting difference with behavior. But what can organizations do with that information?

That was the topic of the People Analytics panel that took place in the afternoon, with participation from:

  • Kathi Enderes, VP, Talent and Workforce Research Leader, Bersin™, Deloitte Consulting LLP (moderator)
  • Megan Huth, Director of the People Lab, Wharton People Analytics
  • Kelly Monahan, Deloitte Center for Integrated Research
  • Gloria Park, Research Director, Wharton People Analytics

The panel centered the discussion around four important insights.

1 – People analytics matters—and most organizations don’t do it well.

Enderes kicked off the session by offering a definition of people analytics: “the use of measurement and analysis techniques to understand, improve, and optimize the people side of business.” She highlighted the importance of people analytics, noting that 84 percent of executives see people analytics as a priority1, and organizations with mature people analytics functions have revenue that is 96 percent higher than those with low-maturity people analytics2. However, just 2 percent of organizations in Bersin’s 2017 High-Impact People Analytics survey had achieved high people analytics maturity.3

That means, of course, that there’s significant opportunity to build this capability. And the future of work—in which organizations determine what changes need to be made to the workforce, the workplace, and work itself—requires the deep insights that people analytics can provide. “Fifteen or 20 years ago, we didn’t have enough data,” Enderes said. “Now we have too much data, and we need to understand how to use it.”

2 – The future of work requires alignment of individuals, organizations, and public policy.

Monahan gave the audience an overview of the ways in which the future of work is creating changes on a number of fronts (see Figure 1). “We don’t need people analytics so that we can create things faster; it’s so that we can change the way we work,” she said. But who is ultimately responsible for helping individuals acquire the new skills and mindset that the future of work requires? Individuals say that their organizations should help, while organizations look to the individuals themselves and the education sector. The issue, then, is the need to align individuals, organizations, the public sector, and educational institutions to explore the questions of how work creates meaning and value—and to make sure the right people are at the table to do so.

Similarly, organizations are trying to find consensus around what constitutes performance and productivity, and what metrics are necessary to capture their impact. “The challenge is that it’s so difficult to measure performance once you get into roles beyond producing widgets,” said Huth. “Every organization has its own definition. I / O psychologists use things like absenteeism and engagement because we are measuring a constellation of things imperfectly, and we need some way to be consistent and do our work better.”

3 – Collaboration between academia and industry fuels research and organizational change.

As individuals and leaders across disciplines try to parse the changes that the future of work will continue to bring, Park offered a vision of Wharton People Analytics as the bridge between the ivory tower and industry. She noted that their research falls into three buckets:

  • Culture: How can the context in which people work better support productivity and well-being? How can traits that predict success be supported and cultivated?
  • Character: What are the traits that predict success across a broad range of contexts, and how can they be developed?
  • Careers: How do people make their way through, across, and between organizations?

 

She added that WPA explores these questions in partnership with organizations, ensuring that research is more than theoretical, and ultimately useful to academics and organizations alike.

4 – Behavior change at work involves a more holistic, contextual approach to interventions.

People analytics practices can help organizations answer a broad range of questions to better understand context:

  • What is going on in the organization—for instance, what is the gender makeup of the workforce, or what does the organizational structure look like?
  • Why do some people succeed and some don’t—in terms of not just performance but retention, wellbeing, and engagement?
  • How do we influence change? How can we help more people succeed?

All of these are critical questions for leaders to understand if they hope to apply the techniques of behavioral change, such as nudging.

“If you don’t understand what the day-to-day context looks like for a particular audience, you can only solve a portion of their problem,” Park said. Huth agreed, adding, “What is happening in the organization at any moment will impact the research questions that you’re asking—if there’s low trust, if there’s massive change, if everyone is going to get their bonus on Monday.” People analytics can help leaders understand the immediate issues that need to be addressed. It can also help leaders zoom out to look at the big picture, getting past the 2 percent to 3 percent change that they might get from nudges to make more significant change—and understanding what forms that might take.

Fundamentally, people analytics gives leaders the opportunity to see where the challenges lie as their organizations transition to the future of work, to test different interventions, and to measure the impact of these changes. In doing so, they can look to insights about behavior change that are anything but new. “We need to get comfortable with the psychological concepts that have been handed down to us since at least the 1940s and 1950s,” Monahan said. “We know about intrinsic motivators, but I don’t know how versed most leaders are in bringing those concepts to the design of work.”

In other words—like the individuals who can benefit from nudges as they try to reform their savings or eating habits—organizations may need a nudge to implement the benefits that behavioral economics can offer.

1 2018 Deloitte Global Human Capital Trends: The rise of the social enterprise, Deloitte Consulting LLP and Deloitte Insights, 2018, https://hctrendsapp.deloitte.com/reports/2018/the-rise-of-the-social-enterprise.html.
2 The People Analytics Maturity Model, Bersin, Deloitte Consulting LLP / Madhura Chakrabarti, PhD, 2017.
3 Ibid.

Melissa CavanaughMelissa Cavanaugh leads the Bersin™ Insights organization of Deloitte Consulting LLP.

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