How Behavioral Economics Will Revolutionize Learning and Development

Behavioral economics is going to have a huge impact on education. It will reshape how learning and development is viewed and executed, providing opportunities for optimized talent management. L&D managers now have an opportunity to look deeper into human behavior and to innovate in the way they design training interventions.

By looking at people’s rational and irrational behaviors, there are opportunities to optimize learning and development. Today I will discuss some of the great opportunities behavioral economics (economía de comportamiento) provides to companies, designers and trainers.

Ciencias de comportamiento en desarrollo organizacional. Como desarrollar talento humano usando economía de comportamiento.

On Friday 29th March, I attended CCOMPP (International Conference on Behavioral Economics) at the MIDE (Economics Museum) in Mexico City. The conference was designed to raise awareness of behavioral economic work in Mexico. Speakers from all over the world came to share their work and insights. There were also panel discussions and activities to foster integration and sharing of ideas. Some great ideas were promoted and shared.

Organizer and close friend, Margarita Gomez mentioned during her plenary that “Pequeños cambios pueden tener efectos importantes” (Small changes can have important effects). This is very true and learning and development can make the most of what behavioral science has to offer.

As I continue to blog about things I enjoy, here are three lessons we can immediately learn for organizational development.

Three Lessons for Learning and Development

ONE: Covert nudges can benefit learning

The idea of nudging is making a small change that can prompt small or big changes in behavior. The theory is based on positive reinforcement and indirect influence. In many, but not all, cases these nudges (or indirect influences are covert). An old problem that existed in education is the idea of forcing learners to do something. When L&D guys have tried to get learners to do something, they often end up with the reverse effect. Learners become less motivated to do what they are told.

It is now possible for L&D instructional designers to promote behavior covertly. In theory, it possible to reduce the effects of forcing someone to do something. For example, when a company roles out a new CRM system, there is often a lot of resistance to the change. By implementing small nudges into the learning environment, it is possible to influence the change to using the new system.

Richard Thaler’s won the Nobel Prize for his work on nudging. His book on the topic is well worth reading.

TWO: Behavioral science embraces data

This is a two way benefit. For behavioral economics to be success, it is necessary to have data. This data can then be used to make more changes in the future. It is a virtuous cycle of data collection and optimization. The advantage for learning and development architects and designers is they can make use of this data to see a more accurate picture of what is going on. They can integrate this knowledge into LMS and e-learning platforms.

People Analytics, Workforce Analytics and HR Analytics can all form part of training and development that is evidence based. Rather than hit or miss interventions, L&D professionals can use data from numerous sources to make better decisions. Learning professionals can also become a partner to the organization. They can work across departments with different managers to make joint strategic decisions that deliver what is required.

See my blog on data use in companies.

THREE: There is support and there are others to learn from

One of the most amazing things to see was the wide array of companies doing work in behavioral economics. The Inter-American Development Bank, the UK Government, CIDE, the Behavioral Insights Team (BIT) and many more. These guys are doing research on using behavioral economics to influence learning and other areas.

For instance, there are apps for learning that promote subtle changes in behavior. There are initiatives aimed at areas like financial education that are having a huge impact. The key is that you do not need to be an expert to start making small changes. L&D managers and instructional designers can read the work of these organizations and borrow and experiment with some ideas.

If working on a much larger scale, it is a good idea to work with a specialist. But, for small interventions there are some excellent and simple lessons to be learned.

How do I use behavioral science in my organization’s learning and development?

Start by reading. Here are three great books I recommend.

Thinking Fast, Thinking Slow, Daniel Kahneman

Predictably Irrational, Dan Ariely.

Scarcity, Mullainathan and Shafir.

Tom Scott @mondotalento, April 2019

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