The untapped potential of behavioural science in business

By embracing the transformative potential of behavioural science, organizations can unlock a future where performance thrives, innovation flourishes, and growth becomes a continuous journey of shared success. The path is clear: let us harness the power of human understanding to unlock a new era of business excellence

Have we been missing a crucial piece of the puzzle in our race to outpace competition and innovate? While we're all quick to jump on new tech trends, bring new processes, or draft the next big strategy, there's a lesser-explored frontier: the intricate workings of the human mind. Did you know that even well-established metrics, like how a manager rates an employee, can be inconsistent in your organization, bringing a lot of stress to your employees? What revelations await us when we delve deeper into understanding our behaviours and motivations? The following paragraphs explore how the insights from behavioural science might be the game-changer we've been overlooking. Could this be the secret sauce to supercharging performance and growth? Let's find out.

Behavior science aids in maximising human potential

Behavioural science looks into why people think and act the way they do. It's about understanding what motivates people, how they react to rewards, and what guides their decisions. When applied to business, especially performance and growth, it helps us understand what really drives success. A recent study by Kognoz focused on this. They wanted to see if the way managers talk to employees affects how fair those employees feel the performance review process is. What they found is interesting: giving managers more training didn't make employees feel the process was fairer. But when managers were reminded to be sensitive, empathetic and more mindful in their everyday communication, employees felt much better about the reviews with a higher degree of acceptance. In fact, if managers gave feedback kindly and thoughtfully, employees saw them as fair, even if the feedback wasn't all positive.

Key Insights from the Study

Empowering employees through mentorship: Gone are the days when a manager's role was just about pointing out what went wrong. Today's employees thrive on constructive feedback that not only identifies gaps but also offers solutions. The study emphasizes that when managers wear the hat of a mentor, offering actionable insights and strategies, employees feel more valued and understood. The emphasis here is on collaboration rather than confrontation. By adopting this mindset, businesses can see a notable increase in employee engagement, loyalty, and productivity. Furthermore, when employees view their managers as allies in their professional journey, it paves the way for a healthier work environment, lower turnover rates, and consistent growth. It's clear: transforming managers into mentors is the way forward for modern organizations.

Harnessing subtle pushes for big changes: Have you ever been influenced by a subtle hint or push, perhaps without even realizing it? That's the essence of "nudge theory" in behavioural science. Instead of overhauling processes or introducing heavy training modules, it's about making tiny tweaks in how choices are presented to people. Nudges gently guide individuals towards decisions that align with their goals by understanding and leveraging the inherent ways our brains work. Studies indicate that a simple reminder to be considerate of employees' emotions can be more impactful than extensive training sessions. The implication? Organizations can create a more empathetic and cohesive work environment by integrating these subtle nudges into their managerial strategies. Small moves, it seems, can indeed create significant ripples.

Rethinking investment strategies for training: It's not uncommon for businesses to pump significant funds into training sessions aimed at moulding manager behaviour and honing performance management techniques. But is this always the best use of resources? Current research says maybe not. Instead of traditional training models, applying principles from behavioural science can offer richer insights and more effective strategies. Recognizing how behaviour change actually works and employing behavioural tenets can redirect organizations towards smarter, more impactful and cost-effective interventions rather than training. By optimizing how we invest in equipping our managers and employees, we're not only getting better return on investment but also enriching the entire employee experience journey.

What next?

Merging behavioural science with the drive for performance and growth leads to numerous untapped opportunities. When we align these fields, we can craft strategies that fit well with human instincts, motivations, and decision-making habits. Understanding how our actions relate to their results gives us tools like nudges and feedback loops to bring about significant changes.

In the business setting, integrating a behavioural science approach can transform performance management systems. Instead of relying solely on intensive training, the focus becomes fostering awareness, empathy, and mentorship among leaders. This change could pave the way for a more effective and understanding performance approach, benefiting everyone involved.

(The author is Co-founder and Director, Kognoz)