The Power of the Nudge

In the May 2008 issue of Fast Company magazine, Dan and Chip Heath, authors of Made to Stick, have an interesting article called Get Laziness on Your Side, subtitled How to sway people's decisions with the gentlest of nudges.

Mental Inertia Prevents Action
They suggest that inertia stops people from taking action. Consider the 401k. 30% of employees fail to opt in even though it would give them more money. Why? Because getting started probably means less money in their paycheck.

How do you get around it? The Heath brothers quote Thaler and Sustein's book, NudgeIf you design a choice the right way, could a small nudge help people make better decisions? The Heath's suggestion: get employees to commit part of their next raise to the 401k. Result: More money in the paycheck and in the 401k.

Some companies (including mine) opt people into the 401k when they start work. You have to opt out.

Similarly, many people fail to opt in as organ donors. In Austria, you have to opt out.

Mental Inertia Can Sustain Action
Once you get people doing the right thing, mental inertia will tend to keep them doing the right thing whether it's saving money, donating organs, or serving customers.

On the Lean Six Sigma side of my business, if I can get people using data to draw charts that tell them something about how to improve their business - the habit sticks. But I've had to find ways to make it easier and easier so that they will try it in the first place.

Who do you need to nudge?
How can you design the choice so that it's a no-brainer?

This is the challenge of fast times: How do we get mental inertia on our side?

Rights to reprint this article in company periodicals is freely given with the inclusion of the following tag line: "© 2008 Jay Arthur, the KnowWare® Man, (888) 468-1537, support@qimacros.com."

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