Episode 27 - Using behavioural economics to help your employees adopt new workplace technologies

Transcript

Vayana Skabrin: Hello, I'm Vayana Skabrin and welcome to a new episode of the Economics and Business podcast. In today's episode we'll be discussing how businesses can use behavioural economics to stay ahead of the curve when it comes to employee adoption of new workplace technologies. So, just a quick note before we begin, we will be exploring principles of behavioural economics, sort of assuming that you know the basics. So, if you feel like you need to brush up, we recommend going back to episodes 8 and 25 of our economics in business podcast series.

So, without further ado, let's dive in.

Over the last few years, we've seen a rise in the number of businesses investing in employee-facing technology, so firms are making these investments to improve planning, performance, employee wellbeing, but benefits don't just come from buying the technology itself. Overall success is heavily dependent on the effectiveness of the adoption by the employees, and without this, businesses struggle to see the true benefits of their time, financial investments, etc. So, what can we do to ensure effective technology adoption by employees? What insights can behavioural economics provide us with to ensure that the right behaviours stick?

To explore these key themes I am super lucky today to be joined in the studio by Suresh Natarajan, head of our PwC's Behavioural Economics practice in the UK and Europe, and Alice Gimblett who leads our Behavioural Economics with Government and Health clients. Welcome both, thank you so much for joining.

Suresh Natarajan: Hello.

Alice Gimblett: Hello.

Vayana: So Suresh, half of the work of PwC’s Behavioural Economics team is on the employee side. So why has it taken so long for employee behaviours to be considered as important as customer behavioural change?

Suresh: Great question, right, so behavioural economics I think is, you know, quite naturally better suited to working in customer and citizen space and I think that's why we've seen so much work in that area. You know, typically it's easier to experiment, you're much clearer about your ability to understand the impact of initiatives, and I think people are more easily modelled when you often might have 10, 20, 100 times more customers than you would employees. So that, kind of, limits the ability for you to use the more traditional behavioural techniques in that environment, but that's not to say that these techniques aren't just as effective. And the fact that it may be harder in the first instance and the way academics have had less exposure to it and the industry has probably been borne by academic focus before, that's lead to a real gap where we see really interesting techniques but used in different places and in slightly harder environments where it may be harder to demonstrate the impact. But it's still really important that you use behavioural thinking to drive change.

Vayana: So, Suresh, what are the behavioural considerations for employee problems?

Suresh: Yes, so I guess if you look at the kind of challenges behaviourally that we typically need to solve in the employee space, so this might be around how do you get adoption of new ways of working, it might be around adherence in processes like a common issue that many organisations will have is how do we get all the time sheets filled out on time? How do we make sure that people work with the processes of an organisations when they don't necessarily understand them, or they don't understand the need for them or the importance? So there's a whole load of things that are, you know, really common in employees just as you do in citizens and customers around how do you make things simpler for people to do the right thing, how do you help them to understand complexity and how do you help them to start adopting and moving along the journey of becoming better at something? That is probably not unique in employees and has always been a problem that many organisations have felt. But the use of behavioural framing, the way that we think about designing solutions that are more about taking the toolkit that we have to tackle that long-standing problem, but with a slightly new approach, is a really important one that I think organisations are slowly starting to wake up to.

Vayana: That makes sense, Suresh. So, yes, clearly behavioural is an afterthought but why is that the case? I mean, people spend a whole bunch of money on this stuff, right? Why don't they consider the people when doing so?

Suresh: Yes, it's interesting and that's the thing, right, like hundreds of billions of pounds are spent on technology generally across both the UK but, for our listeners around the globe, everywhere you might be listening to this. And I think it's largely from people neglecting the importance of behavioural change. So when CIOs, when organisations are investing in building capability and to drive, you know, change in their organisation, they think of the things that are, in their mind, quotation marks, 'difficult.' They think of the things that are-, 'Well, we'd need people to bring in the write the code. We need to have new asset features.' You think of all the things that you need to buy and you forget about the things that you think would be in your ability to solve, which is how do we get everyone to be on board with this new approach? How do we make sure that when we roll it out it lands in a way that is really effective? Often you find organisations are systemically biassed themselves to believing that every single time that there's something new, that will be the solution to all of their problems. And because it's so much better, that alone will lead to everyone's lives being better and everyone will use it because it's better than it was before. I say that through a bit of a smile because we all know, if anyone is listening to this podcast, you've been part of an organisation where that's not true at all. It's surprising how, despite that belief and that understanding, there isn't enough action, effort, thought taken to trying to find solutions to that. So how do you make this roll out more effective? It's not just about what you're giving people, the technology itself, but it's about the perception of those around it. The moment you have a bad technology roll out, for instance, the next one becomes so much more difficult. Trying to get over that adoption hump is crucial for long term success as well as short term adoption.

Vayana: Yes, that all makes a lot of sense. I mean, you have a lot of experience in this space, Suresh, so if you were to give advice to someone leading up a firm, they're facing adoption challenges, they've really not given much thought to this, what advice would you give from a behaviour economics perspective? How could they start incorporating principles today?

Suresh: So, I think the main thing is remembering that adoption is an ongoing process. So people, businesses, usually focus on the first time they implement any technology but, you know, as we all know, processes change, workforces change, technology changes too and adoption is an ongoing challenge. Most organisations are investing in technology that's not static, it's constantly evolving and new features coming in all the time. And we see it being quite rare that you'll have the organisational focus to remember that in that post process of change, you consider the behavioural challenges all the way through in order to make sure adoption is a constant battle that you're trying to work on. And then supporting that is just using more behavioural science, more experiments, more testable and KPI-driven approaches that know that when things are going well you can scale those up, or when things aren't going as well you can focus on those problems before they become any worse.

Vayana: Agreed, I think that point you made around identifying performance indicators is really important, also because often these things take time to see the impact. So if you can identify, you know, those leading indicators that drive change early on, you can very easily iterate your approach, you can prove that you're having an impact, also in terms of the financial metrics as well. So, yes, you've given some good advice on how we can incorporate behavioural, but I think now what we'd really love to hear is more of an example. So, Alice, would love to hear from you here. Could you give me an example of where you've used behavioural principles before when you've tackled, you know, a client adoption challenge?

Alice: Sure, yes. So a lot of our clients are facing, sort of, similar challenges and it's definitely not an easy thing to get right. Probably the best example is when we were working on a large infrastructure project and they were having the exact same struggles we've been talking about, where they invested significantly in a technology, a piece of software, but no one knew how to use it or was particularly motivated to use it either. So there are a few, sort of, problems that we identified from a behavioural perspective. The first is really, sort of, status quo bias, so people were very happy with their current non-digital processes and ways of working, didn't necessarily see the benefits of the new technology. There's also the hassle factor of having to learn new skills and work out how it really helped them in their day to day jobs. I think technology fatigue was another factor, so yet another new thing to get your head around. I think it's something that you alluded to as well, Suresh, it's just the next big thing. And there was really just a, kind of, lack of incentive, so not only were people not seeing the personal benefit to them but also the benefits for their team or for the organisation. Of course the issue with that is that that's self-reinforcing because the technology is only beneficial if most people are using it. So if you've got a situation where no one wants to be the first to adopt that technology, then it's difficult to get the behaviour change momentum going. If people aren't seeing their colleagues do it then they're unlikely to do it themselves.

Vayana: Some really difficult problems you had to solve, Alice, especially with the social norms. I think I've experienced this all the time, like if no one else is doing it, why should I be the first person to? What's in it for me? So I think what we're all actually really itching, very keen to know, how did you actually address these problems? What was your approach? Tell us more.

Alice: Yes, so we took a two-phased approach, really. First, we did a diagnosis piece and then we did a delivery phase as well. So, in the diagnostic, we applied behavioural insight theory and approaches to really, sort of, gain a deep understanding of, you know, those kind of behavioural issues at play. That involved conducting interviews and workshops with our target audience with, sort of, people on the ground, as well as observing behaviours on site to really get to grips with what those barriers to adoption were. And then we used these insights in combination with the literature review to map employee journeys and identify biases or blockers at key decision points and which would, you know, which we found were sort of leading to low adoption.

And then from that point we moved on to, kind of solution design. We created, we did a lot of brainstorming, created a long list of behaviour initiatives that we thought might help to tackle these barriers that we had identified and, you know, hopefully lead to increased adoption. And then at the start of our, sort of, delivery phase, we then took this big, long list of ideas and to help us categorise those interventions or nudges, as we call them, we grouped them into 4 overarching behavioural themes and those themes, kind of, were leveraging principles such as social norms, messenger effects, salience, commitment devices and gamification as well. I mean, that's a lot of, sort of, behavioural lingo, but really the core themes were make it hard to avoid, make it easy to improve, make it a group effort and make it competitive. And hopefully, those are a bit more self-explanatory.

And we also applied the AdCOM model as well, which really helped us, sort of, develop a theory of change. So, as you were saying, Suresh, thinking about it in the slightly longer term. It's not just the initial action, it's actually getting people in the right habits long-term. And it also helped us identify the right sort of timing and touchpoint for those nudge interventions.

Vayana: That's great and I also really love how you focussed a lot at the beginning on that diagnostic, really understanding what are the behavioural blockers, the barriers, rather than just designing solutions that aren't targeted to those barriers.

Alice: Exactly, it's really important.

Vayana: Exactly. We often just want to know, what's the cool creative solution, but it's really important to understand the problem. I think you also did mention, you know, the importance of evaluation monitoring. I know, Suresh, you and I touched on this earlier as well. So, we all want to know, what is the impact of the work on tech adoption?

Alice: Yes, so, yes, really big impact over the 3 to 4 month period that we were on the ground. We saw that our behavioural interventions were very successful in encouraging software adoption, so we saw an increase of 81% in unique daily users, which is brilliant. But we also actually saw positive trends in metrics, in some of the, sort of, quality metrics. So, not just-, we weren't just encouraging more regular usage, but we were encouraging better usage as well. So, we saw that those, kind of, quality metrics raised by 50%, so overall we saw that improved adoption of the software itself, but we also helped teams realise the benefits of the tool. And then that then resulted in significant reduction in, kind of, delays and an increase in employee productivity. So, we're very happy with the result.

Suresh: And what I really loved about this project was that these were problems and software that had been around for years. This firm had been paying and investing for things that just weren't being used, because people didn't think it was helpful for them. And what we're saying and finding in, you know, a 2,3 month period is that you can get adoption improvements of 80% just through a different approach considering humans and all of the different biases and barriers that we have to tackle in that kind of approach.

Vayana: Yes, really great points. I can't believe that jump, 81%. That's pretty transformational. So yes, you've talked a lot about the approach, but yes, if you had to pick out some of the biggest drivers that lead to that 81% increase in usage, but also in the quality and the effectiveness of usage, what would those big drivers be?

Alice: Yes. Good question. I think the behavioural principle we saw the biggest impact from was, sort of, introducing an element of competition. So, using principles from gamification and offering team-based rewards we found was really effective in changing behaviour. But it was also really well-received by the client and by our target audience as well.

Suresh: Just to add a bit more to that, you know, I think most of the gamification leaderboards and having a much more of a competitive environment was super key and that's not just from teams comparing within teams, but also individuals competing within teams and also individuals just competing with their own history, how do you get better over time. I think underlying all of those things is actually that wider piece about, you know, trying to make sure that whatever we're doing is rooted in the actual environment and the behaviours that we're trying to tackle, so how do you make sure when we're designing visual cues, nudges in the most salient places, how do you change the process so that people think about this? Gamification just, kind of, helps to reinforce those behaviours, but we have to design the right behaviours, we have to overcome the capability concerns and trying to provide the right kind of opportunities and motivations as well to drive the behavioural change that we're trying to encourage.

Vayana: I guess organisations, people are very different. And I'm interested to know how replicable all this work is to other problems, people, organisations, employees. Suresh, over to you.

Suresh: Really interesting question. I guess it's a-, there are definitely some lessons that we can take. They were often quite generalisable, you can apply a lot of this thinking to different organisations, different, kind of, in this case, adoption of a new way of working and technology. The key barriers to change are continuing to be largely the same, but it's really important to get into the nitty-gritty, as was mentioned earlier, about why people don't adopt in the places that you'd expect. Building on that, different-, it's not just the environment in which you operate, it's also, like, the individuals. And what we find is that, you know, really important for a lot of our work is segmentation. Taking more of a granular approach to why do different groups of people not adopt for different reasons. So, the early adopters versus the late adopters is an obvious one. But actually those who might just be procrastinating and they need a different set of solutions for them. It's all about trying to show how this saves them time, it's easier rather than anything else. For other people it might be about the value they can derive from it, so linked to the previous podcast we released actually, it's a lot more about understanding why people are different, what speaks to them and tailoring your solutions to tackling that kind of thing. So, again this is something I think organisations are very nascent in their development. Using behavioural in employees change is hard enough and what we really find is, like, a really incremental, but difficult step is, how do you then consider how people ought to be treated differently? What is the communications approach? What is the process change? How does that need to alter by problems set that might vary by individual as well? So, bringing all of that together, you know, we need to take a hypothesis-lead view of how do we send-, design for those different groups, how do we find them in the organisation, how do we know that before they even get that technology who is most prone to be doing what and how can we tackle those things? Really difficult questions, but ones that we've tackled as a crucial way to say, we're not going to get adoption if we treat everyone the same and we're not going to get adoption if we assume that they'll adopt it by themselves. Taking that deliberate focus is key into one that we felt to be quite successful.

Vayana: Yes, I mean, it's very important to accurately segment target customers, making sure that what you're designing really hits home for that specific personality type that someone might have. So, yes, I'd really encourage you to listen to, kind of, Episode 25, I think it was, where we dive into behavioural segmentation and how you did that for one of our other clients. Unfortunately though, I think that's all we have time for in this episode today, but before we do wrap up, I do want to ask you guys one more question. So, if you could summarise in one sentence the most important point you want our listeners to take away with them today, what would it be? So, Suresh?

Suresh: When bringing new approaches and technology, the 'build it and they'll come' is not a very effective approach and so using some of the most effective techniques that we've found in the customer and citizen space is just as helpful in the employee space as well. So, think about behaviours and behavioural science when trying to navigate change in an organisation too.

Vayana: Great. Alice?

Alice: Yes, and I think, just following on from that I would reiterate our 4 behavioural themes, which hopefully listeners might find helpful in their own work. So, make it hard to avoid, make it easy to improve, make it a group effort and make it competitive or rewarding.

Vayana: Great, thank you so much to our wonderful guests. Suresh, Alice, it's been such a pleasure to have you here. And yes, if you'd like to listen, understand more about behavioural economics, do check out our website. So, if you just type in 'PwC Behavioural Economics' on Google, that will come up. You can also listen to Episodes 8 and 25 where we do talk about behaviour in more detail. And of course, if you like this podcast, please make sure to subscribe on iTunes or Spotify, so you can get notified of future episodes. Thank you so much for listening.