John Owen, The Decision Practice

1. Ten lessons for creative services businesses
John Owen, The Decision Practice
www.decisionpractice.com
Putting behavioural science to work:

2. £1 £2
A B
Which beer will you buy?
Source: Decoded (Barden, 2013)

3. £1 £2
A B
30p
C
Which beer will you buy?
Source: Decoded (Barden, 2013)

4. £1 £2
A B
£4
D
Which beer will you buy?
Source: Decoded (Barden, 2013)

5. Lesson #1
Context matters

6. What is behavioural science?
“Understanding and changing
human behaviour”
Paul Dolan
Professor of Behavioural Sciences, LSE

7. The “context” model
Individual
Preferences
Information
Education
Incentives
“Context”
- Environment
- People
- Mindset
- Framing

8. How confident are you that your partner
and you will be together in six months?
In a year? Three years? For a lifetime?
How satisfied are you in your romantic
relationship? How committed are you?
For example

9. In the 2004 Olympics combat sports
competitors wearing red won 60% of
encounters on points but only 50% of
those involving knock-outs (Hill & Barton
2005).
For example

10. A third example
Source: University of Exeter
Short men (below 5ft 9)
and women who are heavier
(than 11 stone) earn
£1,500 less than their
colleagues

11. Context effects
TIME RISK PEOPLE

12. Context effects
TIME RISK PEOPLE

13. The power of deadlines
Group 1: pre-commit to your own deadlines
Group 2: just one deadline (end of term)
Group 3: rigid deadlines every 4 weeks
Which performed best?

14. Lesson #2
Tight deadlines work

15. There are downsides!
1. Goal inhibition
If you focus on one thing, it means you are not
paying attention to other (important) things
2. Cognitive depletion
A loss of intelligence & self-control

16. Cognitive depletion: the case of the
Israeli parole judges
Source: Danziger, Levav and Avnaim-Preso, 2011

17. Lesson #3
Take more breaks!

18. Another of time’s tricks:
The Planning Fallacy
Source: Thinking Fast & Slow (Kahneman, 2011)

19. The Planning Fallacy
Source: Kahneman, 2011

20. 1997
Source: Kahneman, 2011
£40m

21. 1999 budget
Source: Kahneman, 2011
£109m

22. 2000 budget cap
Source: Kahneman, 2011
£195m

23. 2001 final estimate
Source: Kahneman, 2011
£241m

24. 2004 final cost
Source: Kahneman, 2011
£431m

25. Lesson #4
Plan for error

26. Context effects
TIME RISK PEOPLE

27. “We are in control.”
This is a myth:

28. In praise of uncertainty
“Chance favours the prepared....
Invest in preparedness, not in
prediction... [but]... remember that
infinite vigilance is just not possible.”

29. In praise of uncertainty
“Chance favours the prepared....
Invest in preparedness, not in
prediction... [but]... remember that
infinite vigilance is just not possible.”
“Seize any opportunity,
or anything that looks like
opportunity....”

30. Success doesn’t always look like we
envisaged it

31. Lesson #5
Embrace luck

32. But not blind luck...
Embrace data

33. Lesson #6
Embrace data

34. There’s an awful lot we don’t know

35. How likely is it that
I know the answer?
Combating overconfidence

36. Lesson #7
Open up

37. Context effects
TIME RISK PEOPLE

38. “If you want someone to work harder,
pay them more money.”
Old fashioned motivation

39. Popular theories of motivation

40. Self Determination Theory
AUTONOMY
RELATEDNESS
COMPETENCE
Source: Deci & Ryan, 2000

41. Relatedness in practice
“how intelligent and nice the people they
worked with were, and how much the
organisation cared for and appreciated them"
Pfeffer (Six Dangerous Myths About Pay in Harvard Business Review, 1998)

42. Lesson #8
The human context
matters most of all

43. The importance of identity
People experience positive
utility when they work for
an organisation with which
they identify...
(...and negative utility when
they don’t).

44. “Cultural fit” vs “Diversity”

45. Biases towards people
AUTHORITY
LIKEABILITY
SIMILARITY

46. Hiring without bias
• Interviewing several candidates in batches
rather than in an ad hoc manner decreases
bias
• Structured interviews are twice as effective as
unstructured ones
• The wisdom of crowds: four interviewers are
better than one, two or three...but no worse
than twenty

47. Lesson #9
Question intuition

48. Who influences the culture most?

49. Who influences the culture most?
“People defer to those in
positions of authority and
typically underestimate their
tendency to do so.”
“People do things they see
other people doing.”

50. The importance of leadership
Study of 120 top management teams globally:
“Healthy norms ‘take’ only in teams in which
the leader gave explicit attention to modelling
the norms and reinforcing them to the team.”
Source: Wageman & Hackman, in Handbook of Leadership Theory &Practice, 2013

51. Lesson #10
Model norms

52. 10 Lessons
1. Context matters
2. Tight deadlines work
3. Take more breaks
4. Plan for error
5. Embrace luck
6. Embrace data
7. Open up
8. Human context matters most
9. Question intuition
10. Model norms

53. The value of an external perspective
“It is much easier to identify a minefield when
you observe others wandering into it than
when you are about to do so.”
Daniel Kahneman

54. Thank you
John Owen, The Decision Practice
www.decisionpractice.com
john.owen@decisionpractice.com