Why behavioural practitioners should give a sh*t

A small, but growing number of people have studied decision science and/or use its insights to earn a living. I’m lucky to be one of them.

I’m delighted to see communities of practice developing, and I’ve noticed the (apparently) high proportion of jobs using behavioural insights that are in finance or pricing. It has made me think about what we want ‘our’ industry to be like. My view? In a nutshell, we need to give a shit. Right now, that means linking what you do to the impact of behavioural outcomes on lowering resource use and increasing human capital and social capital. For simplicity’s sake, I’m calling this sustainable behaviour.

Here are the three reasons you should be using your influence to make behaviour more sustainable, if you work with behavioural insights:

  • First of all, you should, for the same reason that everyone with any influence should: that the data compels us, if we care about our species’s future. For one thing, every year since the 1980s, we have used more natural resources (on which all our wealth is based) than our planet can replenish; this year (2013), Earth Overshoot Day was on 20 August. Vitally, the additional GDP that has driven the resource use does not make us any happier. Climate change is part of this story: the recent IPCC report confirms what we already knew: that we need to leave in the ground over half of our confirmed reserves of fossil fuels. Second, inequality has grown rapidly in much of the West, particularly the Anglo-Saxon world, in recent decades, exacerbating crime, poor health, mistrust, mental illness and a host of other social ills.
  • Second, it’s time. We’re starting to see ourselves (sort of, kind of) as a fledgling industry. So it’s time to decide – and state – what our values are as an industry. Do we want to uncritically use our insights into human nature to boost companies’ profits by helping them sell people more stuff (or to sell it more effectively), when we know the impacts this economic approach is having? Look to the Design industry as an example: for years, the trend in the industry has been for new, young designers to want to work on service design for social outcomes and, if working on product design, to want this to be sustainable in terms of material use and reuse. They see their industry’s impact on the world, and want to influence it. It’s not hard to find examples.
  • Third, because it should make even more sense to us than to most other professions. Using behavioural psychology or behavioural economics gives a special insight into human decision making. We know that the basis on which it has been assumed that people (you might call us ‘consumers’, but we’re people, you know) make decisions is very flawed. Classic Enlightenment thinking is wrong; homo economicus doesn’t exist. Well, that is the same Enlightenment thinking that drove us to create an economy in which the pursuit of individual wealth is paramount, which encourages unfettered short-term thinking and which does not price externalities (such as the impact of economic activity on natural resources through pollution and soil erosion) because, well, we can’t see them.

That’s it. I’m not launching a campaign. I don’t have a statement of ethics to sign up to. And I don’t have an ask. To start with, I’d just like to see if anyone else agrees.

Doing it better

Below is a post I wrote for the Behavioural Design Lab a short time ago. The aspect that has attracted the most interest is the use of proposed use of defaults to move from a project management-centric view (where residents make a fresh decision at each stage of the process that has been mapped out) to a citizen-centric approach (where, once someone has chosen to have a warm home, the default is that they are taking part.

Two quick points, drawing on conversations that I’ve had with people since writing this.

First, this is a really good litmus test for whether we are comfortable using behavioural insights. Personally, my view is that our choices always have a context, and that framing the choice in this way makes it clear and easier to make a decision that is salient to the person making it. But I know that some people not used to working with behavioural insights are a little uncomfortable with it; because it seems a little, well, sneaky. In a world where there are numerous websites on which I can click a ‘buy now’ button, before verifying a host of details, I’m comfortable with it, and that’s why I see it as a litmus test: it only seems sneaky if you compare it with a context in which people have to repeatedly decide.

Second, reflecting that most of the feedback I’ve had has been of the “what a great idea!” variety, there is so much that we can do better in public services, and it is within our grasp. I hope that this helps demonstrate the value of what I’ve been trying to do with With The Grain over the past couple of years. There are so many behavioural effects that we know can affect our decisions; and there is an ever-growing body of evidence of how and when they work. So let’s generate new approaches drawing on this knowledge. This idea was generated in a workshop of stakeholders brainstorming ideas based on different effects, of which defaults was one. Most of them hadn’t been exposed to much behavioural science before; if they can do it, so can you. This is one of our best chances of meeting the demand management challenge.

“Did I just use behavioural science? But I’m not a designer!”

So said a dozen or so stakeholders of a project aimed at retrofitting 160 draughty homes in Crawley, West Sussex. With good reason. They had co-produced a wide-ranging set of design and communication ideas for the project.

The project offers work such as external wall cladding, funded by the Energy Companies Obligation, through which the Government is obliging utilities to fund energy efficiency work on Britain’s coldest, draughtiest and most energy inefficient homes. The problem many have found is that, in the absence of existing demand (that is, people who are aware that they want their home retrofitted but haven’t been able to do it yet), building demand for something free is tricky. Price perception tells us that if something is free, it doesn’t have value. Homo economimus might see free cladding as a no-brainer; real people don’t.

So, when introducing the opportunity to people, we decided to frame the choice as being between a cold home and a warm home – not as the chance to choose a named process or product. And we avoided terms (such as ‘retrofitting’), known by professionals but which may provide a barrier if not familiar to residents. Crawley-ECO-leaflet-section

Adding the use of behavioural insights to the team’s existing expertise in community engagement had a major impact immediately, speeding up recruitment 4-fold, compared with similar projects being undertaken elsewhere in the South East.

Another innovation is that, when people say ‘yes’ to a warmer home, this becomes the default setting. So, instead of initially agreeing to an “assessment” which leads to another choice once the surveyor has visited, householders make a single choice: the surveyor will make a recommendation of the measures to adopt “ … unless you drop out”. From a project management viewpoint, we’re moving from a process whose success depends on people saying ‘yes’ at several different stages to a process designed to support and prove people’s positive choice to have a warmer home.

There are a dozen other ways in which we are using – or plan to use – behavioural insights. Rob Bennett, who leads the community engagement team, says, “It is really important that we find ways to encourage communities as a whole to get behind these initiatives, So whether it’s the initial decision to participate in a scheme, or ensuring that residents communicate what works best by sharing good practice and experiences – we expect behavioural evidence to play a critical part in successful ”delivery”.

We think we’ve learned what the With The Grain tool has also demonstrated in other settings: that behavioural insights are accessible and usable; that these insights help make approaches more people-centric and therefore more efficient; and that it’s possible to get away from the default setting of trying to persuade people.

So we now have a platform for using behavioural insights in the future. And we have a group of stakeholders who are comfortable with knowingly using behavioural insights to affect the context within which people make decisions.

In the future, this won’t be unusual. Right now, it feels revolutionary.

A taxonomy of the Sharing Economy?

This is one of those ‘work out what you think by writing it down’ blogs. I hope it works. It’s fuelled by three things:

  1. My understanding that the ‘low carbon economy’ that each place will need to foster is about something much deeper than making widgets for wind turbines or even developing skills for retrofitting. It’s about new lifestyles and livelihoods in which the use of natural resources (and production of carbon emissions) is much, much lower than it is currently.
  2. A strong sense that we can now see many examples of what components of this new economy will look like, for example in the Compendium for the Civic Economy.
  3. My belief that most policy-makers don’t get this yet and we need to help them to do so, so that they can prime the development of the new economy. (I’ve written a bit about this, at least from a local government point of view)

So, recently I found myself at the launch of the Sharing Economy network, at the behest of People Who Share. A thought started to form, which I’m trying to crystallise. If this is helpful to the #SharingEconomy people, good. If not, no problem.

At the launch, I felt that much of the discussion people have about policy or principle relating to the sharing economy (anything other than ‘how to’ discussions) defaults to considering initiatives like Freegle, Streetbank and Freecycle, which are actually fairly similar to each other.

I may be wrong, but I think we default to these initiatives because the model they represent is accessible: buy something, use it until you don’t need it, then pass it on. I’m certainly guilty of this default myself: if I’m trying to excite people about the sharing economy, I often cite swishing, which is similar, only with the added thrill of the event.

This may not matter. But let me explain why I think it does. Most people involved in developing and promoting a sharing economy are keen on it because, compared with how we usually use/exchange goods and services, the Sharing Economy uses fewer natural resources and builds social capital. (Users, of course, are mostly taking part to save money – but hopefully feeling the social capital benefits, and maybe getting some insight into living lower-impact lives).

This is happening without much input from policy-makers. Fine, until now. But I think it is worth promoting to policy-makers as worthwhile and essential. And to do that, we need a narrative that also helps them start to see the sharing economy as a sector that can be encouraged. However, if every policy discussion about the sharing economy centres around the freecycle model, then much is lost.

My suggestion: develop a taxonomy of the sharing economy, so that we are clear what distinct types of sharing there are. If we do this, then the likes of People Who Share can have clearer asks of policy-makers, because they’ll be able to identify which parts of the sector are developing faster than others, which need specific incentives, and suggest interventions specific to different types of initiative.

How would you go about developing the taxonomy? It’s a research project, but I don’t think it’s overly complex. I’d start by identifying a long list of initiatives that meet ‘sharing economy criteria’ (lower natural resource use compared with conventional economic activity, possibility to improve social capital); for each one, categorise it according to a number of factors; cluster into a manageable set of typologies; and name them.

Which factors to use for the categorisation? Here’s my very rough starter for ten:

  • What is being shared (skills / clothes / electrical goods / space in car / etc)
  • Ownership (individual / community or shared / corporation)
  • Tangible / virtual / service
  • Type of utility offered (travel to work / cultural access / goods / etc)
  • Nature of sharing (temporary, in return for a fee / temporary, no fee / ownership passed on / ‘never owned’ / etc)
  • Platform (online / event / email group / noticeboard / etc)

In this way, we start to see how Whipcar is different from Freegle is different from Streetbank is different from Airbnb, and so on. And have more powerful policy ‘asks’ as a result.

So I guess the main questions are:

  • Would this be helpful?
  • If yes, has it been done (or at least started) already?
  • If not, who’s going to do it?

Over to Benita and co!

New analysis suggests we’re cutting resource use but let’s not over-interpret #decoupling #degrowth

I’ve copied a few paras below, but you really should go to the Guardian website and read the whole article.

This is important because it allows us – very briefly, and possibly illusory – a glimpse of decoupling. Could it be that it is possible after all to reduce material throughput while economic activity increases?

Like I say, it’s just a glimpse. Even if Goodall’s tentative conclusions turn out to be true (and there are important caveats), the degree of decoupling would be nowhere near that required to reduce our resource use enough to sustain our civilisation in the long-term. But – hey – when you thought you’d never see even a glimpse, be pleased.

Two quick points:

One of several important caveats about the metrics is that the story on carbon looks different. ‘Offshoring’ our emissions to China not only gets them off our books; it also multiplies them massively, according to recent (not yet peer reviewed) data I’ve seen.

My main reflection on this article is that this is exactly the sort of discussion that needs to be at the heart of our political and policy debate. This is just the sort of finding that we look at the implications of if we are trying, as Tim Jackson has challenged us, to create the new macro-economics.

We can’t pretend that it is in the mainstream. Yet. But we need to use the influence we have to make it so.

Amplify’d from www.guardian.co.uk

Why is our consumption falling?

From food to paper and water, Britain has gradually been guzzling less over the past decade. Why?

Peak stuff: the data

With so many significant events to look back on, one thing that few people will remember 2001 for is its entry in the UK’s Material Flow Accounts, a set of dry and largely ignored data published annually by the Office for National Statistics.

But, according to environment writer Chris Goodall, those stats tell an important story. “What the figures suggest,” Goodall says enthusiastically, “is that 2001 may turn out to be the year that the UK’s consumption of ‘stuff’ – the total weight of everything we use, from food and fuel to flat-pack furniture – reached its peak and began to decline.”

Goodall discovered the Material Flow Accounts while writing a research paper examining the UK’s consumption of resources. The pattern he stumbled upon caught him by surprise: time and time again, Brits seemed to be consuming fewer resources and producing less waste. What really surprised him was that consumption appears to have started dropping in the first years of the new millennium, when the economy was still rapidly growing.

In 2001, Goodall says, the UK’s consumption of paper and cardboard finally started to decline. This was followed, in 2002, by a fall in our use of primary energy: the raw heat and power generated by all fossil fuels and other energy sources. The following year, 2003, saw the start of a decline in the amount of household waste (including recycling) generated by each person in the country – a downward trend that before long could also be observed in the commercial and construction waste sectors.

Read more at www.guardian.co.uk

@theneweconomics points the way to reshaped economy & finance system, and I wonder what #localgov needs to do

I like this article by NEF’s Tony Greenham very much, because it explains what those who think the financial system is broken should be for, not just what they’re against.

You could give these ideas a number of different narratives, with pretty much the same result. I’d speak of a more localised economy and of the lower use of natural resources that would result from these measures.

Again, I’m struck that this is at the heart of shaping the places of the future and that therefore – in its long-term thinking, once it has dealt with the short-term financial issues – local government needs to be working out its role in this brave new world. Not to mention what it can do in the meantime, in the absence of central government action.

Amplify’d from www.neweconomics.org

The global economy is broken. Here’s how to fix it

Andy Wimbush

Tony Greenham
Head of Finance and Business

The system is broken, here’s how we fix it. Don’t tinker with ringfencing banks. Break them up as the first step to creating an effective local lending infrastructure. This is not pie in the sky. This is what the German banking system looks like. Its local public savings banks have supported small businesses and ordinary people throughout the recession, where big banks run away at the first sign of trouble. No annual pantomime of Project Merlin is required for our industrial competitors.

Don’t create new money just to feather-bed bankers and enrich the wealthy. Create new money to create new jobs and new wealth. Use quantitative easing directly to fund the renewal of our infrastructure, to build the new green economy, eradicate fuel poverty, reskill the unemployed and tackle the climate crisis at the same time.

Don’t let people become the slaves of distant creditors. It’s time to talk of a massive relief of debt. The UK’s problem is not really the public deficit that so obsesses the chancellor, but private household debt and the daunting treadmill that awaits a generation of young people burdened by student fees, relentless rents and a housing market that is still in the realms of fantasy.

Don’t wait for money to trickle down. Experience shows that, left to its own devices, it will flood upwards. We can start by setting up local barter currencies in every city that help new enterprises use wasted land, buildings, resources and people. Ultimately we need more dispersed ownership and control of the nation’s natural, human and financial capital. We need to restore large sections of the financial industry to the mutual ownership that served this nation so well until the scandalous smash-and-grab raids of demutualisation in the 1990s.

In short, we need to reassert the public interest. It turns out that, as a governing principle for the financial system, greed is not good. Financial plutocracy must give way to financial democracy – banking as if people mattered.

Read more at www.neweconomics.org

My take on what #localgov must do now: create conditions 4 #sustainability #innovation

This is my analysis from last week’s Local Government Chronicle. What’s it about? Here’s a clue: though I learned many years ago that sub-editors never accept the author’s suggestion for a title, I still try – and for this one my attempt was “It’s The Local Economy, Stupid”.

The challenge councils are working on now, dealing with funding cuts, are minor compared to the challenges our places face as a result of systemic global problems. This is why people like Neil McInroy focus on the concept of local ‘resilience’.

I accept that there aren’t yet many local politicians looking to reshape their local economies to meet these fundamental challenges. So the argument needs to be won.

You can help by asking your local leader, “What will the local economy be like if the financial markets meltdown after a default by, say, Greek and Portugal? And wouldn’t it be good to start right now to shape it so that it can deal with shocks like that?”

Amplify’d from www.lgcplus.com

Creating a sustainable future at the grass roots

22 September 2011 | By Warren Hatter

All local economies are facing instability in three systems on which we depend: in the financial markets, in energy supply and prices, and in ecosystem services. And we can already see local problems caused by instability in these systems: just look at the boarded windows on a typical high street, rapidly rising domestic energy prices, or the way that more homes are becoming uninsurable due to flood risk.

Worse, whatever the causes of the recent riots in urban England, they are a sure sign that there are many who feel detached from their local economy. Worse still, all these systems are now subject to major shocks, whether this is financial meltdown from a European country defaulting on its loans, massive jumps in food prices or cuts in oil supply.

There are concrete ways of getting to the understanding that your locality is vulnerable. Maybe through ecological footprinting of the area and starting to understand ‘one planet’ principles (like Sutton LBC); through commissioning a consumption-based carbon footprint, revealing that the true scale of the carbon challenge is more than twice what NI186 has had us believe (like West Sussex CC); or through a networked approach to place planning (like CLES’s work on local resilience).

When leaders realise that their local economy is not fit for purpose, what do we do? First, recognise where we need to go. We often hear leaders talking about the opportunities of a ‘low carbon economy’, but there is much more to this concept than benefitting from ‘green growth’ by providing goods and services related to energy provision and efficiency. The local economy that evolves will need to be:

resilient to shocks linked to food supply

resilient on energy

using much lower-carbon supply chains for everything

able to maintain its natural and social capital

If we don’t choose to be laissez faire, what can local government do to create the conditions for this new, sustainable economy to thrive?

Recognise that place is important

The “little platoons” approach to localism and big society will not suffice here. I believe that there is a vital role for leadership of place (place shaping, place stewardship, call it what you will) that is often absent from Big Society narratives and which is best carried out by a strategic body with a mandate: the local authority. As NLGN has suggested, some places are better equipped than others for the ‘Big Society’, so some intervention is needed. But this has to be about supporting communities, not top-down approaches which stifle innovation.

Grow our economic capacity

Relatively few economists work for local government; still fewer who are engaged with the ‘new economics’ and want to develop policies that let diverse, local enterprise flourish and resource loops become closed. In the future, for example, how can we encourage funding through a new local lending infrastructure? There is a range of models being used and proposed by the likes of NESTA.

Evolve our approaches to local leadership

More than ever, local authority leadership has to allow others in the community the space to lead. To do this, we need to excel at recognising civic entrepreneurship, and nurturing it. And enable the networks that are most likely to bring innovations to scale, so that every place might benefit from innovation elsewhere.

A sophisticated approach to behaviour change

More resilient, successful places can only be created with significant lifestyle changes, but we know that, in recent years, attempts to persuade people towards lower-impact lifestyles have had limited success; increasingly, we are learning to make sustainable living aspirational and in tune with people’s values.

Different metrics

We will have to measure our wealth in a much more rounded way than GDP and GVA do at present. One benefit of new ways of understanding success is that it will make sense for local assets to be used to their full potential.

Whatever we call it, the signs are that the new economy, the Civic Economy, the Big Society, is emerging, with massive energy, with diverse leadership and funding mechanisms and with a strong sense of place. Though these disrupt business as usual, they point to a high-wellbeing, resilient future with high social capital; this is unequivocally an opportunity agenda.

If we can work our way through the challenges, we will find that the local initiatives like these become mainstream. Delivering them is not our job in local government; creating the fertile ground for them to grow and thrive, is.

Warren Hatter is a local improvement advisor specialising in climate change, behaviour change and local leadership

Two recent reports make it clear there are already plenty of initiatives to inspire and councils are involved in many of them. Among the many initiatives highlighted in NESTA’s Compendium for the Civic Economy and NLGN’s Realising Community Wealth are:

  • Fintry community energy partnership, producing profits from sustainable energy for a whole community
  • Nottingham University Hospitals’ sustainable food procurement, promoting local entrepreneurs and growers while improving value for the NHS
  • Sutton Bookshare, a virtual library where members lend books to each other
  • Time Banks network in Islington, enabling people to share skills
  • Southwark Circle, a co-designed membership scheme for older residents
  • Surrey Museums’ provision by volunteers

Pick your own definition of Sustainable Development! #localgov #nppf

So the Localism Bill will not define ‘Sustainable Development’. We can’t pretend we didn’t see this coming. But it’s still a shocker, for many more reasons than I’ll go into here.

Let’s just think about one: what it reveals about what we mean by ‘localism’. The (New) Localism that I understand would accept the universal definition of Sustainable Development (which we have basically had since 2005’s Securing the Future) and make decisions locally informed by this, and by local circumstances.

In contrast, what we’re heading for is local government, in effect, being free to (in fact, being obliged to) define ‘sustainable development’ itself. As well as the additional burden, and the additional complication and contestability this adds to planning decisions, it will legitimise decisions based on prioritising economic growth at the expense of social and environmental sustainability.

As they say on message boards, *facepalm*.

Amplify’d from www.lgcplus.com

Legal definition of sustainability ruled out

The government has been accused of “paying lip service” to protecting the environment after refusing to define in law what ‘sustainable development’ means.

Joan Walley MP (Lab), chair of the environmental audit committee, said her committee had been “fobbed off” after ministers refused to act on one of its key recommendations.

Changes proposed in the localism bill will introduce a “presumption in favour of sustainable development”, meaning that councils default answer to planning applications should be ‘yes’.

In a report in March, the committee called for the bill to include a definition of the term ‘sustainable development’ and for it to include “the five recognised principles of sustainable development”.

However, in its response to the report, published on Monday, the government said the measures would not be necessary as the new National Planning Policy Framework would outline “the key principles that should underpin every aspect of planning”, making a legal definition unnecessary.

Read more at www.lgcplus.com