What is Nudge Theory?

Let’s suppose your organisation is trying to recycle more of its waste. You might write a new policy and lay down some rules for employees to use recycling bins. Then, you might inform them of this policy through briefings that explain why you are introducing recycling bins. You might even engage your employees in deciding where the bins will be located, what to do about confidential waste, and other matters they may be concerned about.

Or you could simply ‘nudge’ your employees into doing what you want them to do.

According to Richard Thaler and Cass Sunstein (‘Nudge’, 2008), most people choose the default option. They walk down the stairs but take the escalator up; they stick with the same energy provider; they us the bins provided.

A branch of behavioural economics, a nudge is a friendly push in the right direction. Footsteps stencilled up the stairs encourage people to walk; including average annual costs for a typical family on an energy statement encourages people to consider switching supplier; providing a range of bins encourages people to recycle appropriately.

How can Nudge Theory help with OD?

The right nudge in the right context can help employees choose a new default option that supports the organisation’s goals. And this can be done without policies, rules, briefings and staff engagement. In other words, it can be done more cheaply and more effectively than traditional approaches to introducing change.

Does it work for more substantive change than introducing recycling bins? You betcha! In one example, using positive feedback, targets and small charitable donations, an airline saved over £3m in fuel costs by nudging employees to use it more efficiently.

Why would I choose to use Nudge Theory?

Some say nudges are manipulative. However, a crucial aspect of being influenced by a nudge is that it is voluntary. The choice to be nudged rests with the individual. However, social norms can significantly help to lock in the new nudged behaviour. For example, a sign above the new recycling bins that says something along the lines of “Join 70% of your colleagues in recycling office waste!” will have significantly more success than “Help us recycle our waste.” In behavioural economics, this category of nudge is called ‘social proof’.

Another category is ‘status quo bias’. People stay with what is already in place. Therefore, the UK Government moved from employees having to opt in to a workplace pension to automatically enrolling all employees into workplace pensions, so they must elect to opt out if they do not want to be enrolled. This was a deliberate use of nudge theory and has resulted in only around 10% of workers opting out and an estimated £17bn more money per annum invested in pensions in the UK. And they are at it again with opting everyone into organ donorship.

So, next time you’re planning to change something in the workplace, think about how nudging behaviour might help you achieve that change and make it stick.

OD thought leader: Edwin Nevis (1926 – 2011)

Ed Nevis was a Gestalt therapist who worked with clients in an experiential way, not just from a therapeutic perspective. He was faculty member at MI Sloan School of Management and co-founded the Gestalt Institute of Cleveland.

His major contribution to OD consulting was in applying the use of the Gestalt Cycle of Experience to the role of consultant.

What is the Gestalt Cycle of Experience?

The Gestalt Cycle of Experience was formulated by Fritz Perls in the 1940s. It describes the intrapsychic experience of an object, from initial sensation and awareness, through to full contact, resolution (closure) and withdrawal of attention. The full cycle is sensation; awareness; energy mobilisation; action; contact; resolution; withdrawal of attention.  The object move from being part of the background noise of our lives (in Gestalt, this is called the Ground), to being in uncosciously in the forefront of our minds; we become uncosciously pre-occupied with the object.  Gestalt calls this ‘Figure’.

As a very simple example, it explains why I now know what a Skoda Roomster looks like. My wife was thinking about buying a replacement car. “I quite like the Skoda Roomster,” she noted one morning over breakfast. I had no awareness of this vehicle. Later that day, she pointed one out on the road. It was then in my awareness. They suddenly appeared everywhere! I had (unconsciously) put energy and action into spotting them on the road.

I (consciously) made full contact when we visited a showroom and explored the features of this car. I achieved resolution when she decided it was not the model for her and I could then withdraw my attention. Oddly enough, I hardly ever see these cars anymore, although I know they must be out there, just like I know they were out there before I became aware of them.  In Gestalt language, they had moved from ‘Figure’ back to ‘Ground’.

Too many open loops

This intrapsychic process happens whenever we mobilise our energy into making contact with any object. You have probably heard people say they have ‘too many open loops’. They are referring – probably unconsciously – to the Gestalt Cycle of Experience. If we have an incomplete cycle, we are unable to be fully present with others in-the-moment. This is because we are psychologically distracted by something other than the person present that we need to make full contact with in order to get closure and withdraw our attention. It is why we feel a sense of satisfaction when we put a significant piece of work ‘to bed’.

How does this apply to organisational change?

Nevis applied the thinking to organisations, associating the stages of the cycle to consulting interventions.  See also J is for Joint Diagnosis.  His seminal work details how the consultant uses himself as an instrument to effect change: “using the cycle as orientation, the [Gestalt consultant] acts as an instrument that observes and monitors the decision-making process of the client system to see that each phase is carried out well.” In this way, the consultant educates the client system “in how to improve its awareness of its functioning.”

Recommended reading: Nevis, Edwin, C. (1987), Organizational Consulting: A Gestalt Approach, The Gestalt Institute of Cleveland Press, Cambridge, MA.

Next time: O is for Open Space