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Tiny bj7/21/2023 ![]() ![]() And then they ask, ‘why is nobody following our new process?’ OK, well, it has 42 steps.'” ![]() And yet people barely ever apply it in practice. Nobody has ever disagreed with me when I say that. “‘Why is nobody following our new process?’ OK, well, it has 42 steps.”Jesus MantasĪs Mantas says, “People will do what’s easy more often than they will do what is correct, right or expected. What could be easier than joining a 401(k) through auto-enrollment? In other words, make things easy for people. The 401(k) research bolsters another point Mantas mentions frequently: If you want to influence behavior and encourage adoption, create the simplest possible path. Stop making things so hard for people Efforts around transformation should always keep that in mind, and businesses should spend much more time getting the presentation right. Factors like color and design “have disproportionately more impact than baseline statements,” he says. Mantas believes data and facts make up 20% of a decision, while presentation is the other 80%. federal spending package requires employers to automatically sign up their employees for 401(k) plans to improve their retirement security. Research about the power of auto-enrollment is so persuasive, in fact, that a new U.S. ![]() In both cases, people are given the same choice-to join a 401(k) or not-but the facts are presented differently, using an opposite choice architecture, as behavioral economists call it. ![]() According to research from fund manager Vanguard, people who are auto-enrolled in a 401(k) have a 93% participation rate, compared to a 66% rate when people have to opt in. That brings much higher adoption rates than a program requiring people to opt in. Ground beef that’s labeled “85% lean” seems more appealing than an identical product labeled as “15% fat.”Īs another example of the power of presentation, Mantas cites studies that show a powerful way to encourage behavior in people is to sign them up for something-like a 401(k) savings plan-and allow them to opt out. A pair of headphones selling for 50% off $60 feels more compelling than the same item selling for $30. Case in point: Take the same facts and present them differently, and you get a different reaction from customers. But emotion plays a much larger role than leaders think. “In a business environment, we tend to think everybody makes rational decisions,” Mantas says. Realize it’s less about the data-and more about the presentation Here are a few essential-but often overlooked-guidelines for any leader aiming to influence people’s decisions and drive change. The principles of human behavior can seem simple and even obvious, he says, but time and again, companies ignore them, then wonder what went wrong. Mantas has spent years combing through findings from behavioral economics and incorporating them into his consulting work. In his role overseeing Business Transformation Services for IBM Consulting, Mantas guides organizations toward success as they redesign their businesses. They’re missing out on a secret of change management, says IBM Global Managing Partner Jesus Mantas: “You really can predict, for the most part, why people do what they do.” The answers, he says, come from behavioral economics. Business leaders often think it’s impossible to predict the outcome of a transformation effort-whether employees will embrace a new process, for example, or how customers will react to a new service. ![]()
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