Rory Sutherland on BE - part 2

Listening to Rory Sutherland’s comical and pithy oratory, it is easy to find yourself nodding along in a happy, unquestioning manner. It reminded us of belief bias, where a conclusion seems so plausible that the logical basis of the argument isn’t fully analysed!

That said, there were some lovely nuggets in Rory’s talk last week – and although we can't do him justice here, we’re delighted to share a few notes:

A double-standard. In a Midwestern office block, the slow lifts were causing frustration. A complex engineering solution would improve the speed of the lifts – but the cost would be significant. One bright spark came up with an alternative: putting big mirrors on each floor. This induced grooming and mild voyeurism, and consequently people didn’t mind waiting for the lifts anymore. A fantastic, counterintuitive solution. But it points to a double-standard. Why is creativity policed by logic, but not the other way around? Creativity is judged by the standards and metrics of accountants. Yet engineers implementing a costly technical solution don’t get penalised from not coming up with a creative, cheaper alternative! Why is no-one is fired for being unimaginative?

Time. The lift example also points to the subjective nature of time. Time is not fixed but experienced according to our context, emotional state and so on. Psychology provides us a different way of viewing problems – and so leads to some simple and economical solutions. Why spend a load of money improving the speed of trains in the UK? Just give people Angry Birds and time loses all meaning! What’s an extra few minutes with comfy seats and free wifi?!

Language. Talking about marketing is a bit like talking about astrology. You’re fine doing it with a fellow believer. But talking to finance guys about brand iconography is like going to a physician and talking about crystal healing. With BE, we can challenge existing financial models, while speaking in a language that comes much more naturally to the finance guys. BE provides a cogent model and language.

Governing insights

‘The Nudge Unit’ has had a fair bit of press lately – including a recent review of its work on Radio 4 (worth a listen). Yet although this is good news for the public profile of behavioural economics (BE), it sometimes gives the impression that BE is the domain of a select few, not a practical option for local government.

With this in mind, we were interested to hear what would be said at the Institute for Public Policy Research (IPPR) event: ‘Behavioural economics and its role in policy making’. The seminar included a presentation from central government that made it clear how seriously they take BE.


Here are three key points that resonated with us:
1.    Prioritise insight
Understanding your audience through psychology is an important part of the equation. Many policymakers still rely on using surveys, despite the fact that they only measure explicit attitudes and are skewed by the environment in which the survey is taken, the person asking the questions and the way that questions are framed.

2.    Beyond government
The subject of behavioural economics is a hot topic that introduces a new system of thinking. The implications and uses for our society are widespread – certainly not limited to government.

3.    Nudge locally
The central government’s ‘nudge unit’ is doing some great work, from persuading people to pay taxes or donate organs through to getting people to complete forms properly (one pilot study found that asking for a signature at the top of a legal document rather than at the end made people less likely to make careless errors). Yet despite the importance of centralised work, the session really emphasised the role of local authorities in taking the lead.  They were described as being ‘better placed’ to understand and address the unique needs of their city – and thus to influence behaviour at a local level.

The fact that the event was heavily oversubscribed may well indicate an appetite within the localities to pick up the 'nudge baton'.