The Power of the Nudge

Jay Arthur
888-468-1537
303-756-9144
KnowWare International, Inc.
DBA LifeStar
2253 S. Oneida
Ste 3D
Denver, CO 80224

We work with companies
that want to fire up their profits using
Lean Six Sigma

Copyright © 2011

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, Nudge: If 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?

© 2008 Jay Arthur, the KnowWare® Man, works with companies who want to plug the leaks in their cash flow and people who want to master the mysteries of the mind..

To have Jay Arthur to train your staff, contact Jay at (888) 468-1537, support@qimacros.com.

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