Idea in Brief
The Problem
People often make poor decisions that don’t serve their employer’s and their own interests not because they are dumb but because of the way the human brain is wired—because of cognitive biases. This helps explain why people underestimate how long it will take to finish projects, are overconfident about our ability to implement strategies, don’t choose the optimal health or retirement benefits, and so on.
The Solution
Instead of trying to rewire the human brain, which is difficult if not impossible, change the environment in which decisions are made to encourage people to make wiser choices.
The Steps
Understand the kinds of systematic errors people make and the factors that affect motivation; define the problem to determine whether behavioral issues are at play; diagnose the specific underlying causes; design a way to tweak the environment to reduce or mitigate the negative impact of cognitive biases and insufficient motivation on decisions; and rigorously test the proposed solution.
All employees, from CEOs to frontline workers, commit preventable mistakes: We underestimate how long it will take to finish a task, overlook or ignore information that reveals a flaw in our planning, or fail to take advantage of company benefits that are in our best interests. It’s extraordinarily difficult to rewire the human brain to undo the patterns that lead to such mistakes. But there is another approach: Alter the environment in which decisions are made so that people are more likely to make choices that lead to good outcomes.
