Behavioral Economics Strategic Framework


IntentionsMost people want to do the right thing. They just need help acting on those good intentions. ~ Bob Nease, PhD

If you are a business leader — especially a benefits manager or the leader of a wellness program — you’ve probably heard the term behavioral economics tossed around.

For the past five to 10 years, consultants and service providers have been claiming to use behavioral economics to ensure their programs will overcome the reasons why standard programs in the industry have failed to engage employees in healthier behaviors and smart-consumer choices. However, behavioral economics is a still-emerging field of science, and the only literature on the subject has been academic — not very digestible, nor useful for business leaders to apply to real-world problems.

Until now.

The new book The Power of Fifty Bits: The New Science of Turning Good Intentions into Positive Results, by Bob Nease, PhD, is the first practical guide for business leaders to apply behavioral economics to activate the good intentions of people in their workforce.

What’s Behavioral Economics?

Behavioral economics is the study of how people make decisions in order to provide insights about how to motivate positive changes. The crux of behavioral economics is that people’s choices and actions often are not based on rational decisions. (We like to think humans usually act according to logic. But the data shows that most of our behaviors are automatic, which is why people tend to choose short-term gratification even if it has negative long-term consequences.)

For those managing benefit plans and wellness programs, this explains why some of your best efforts at plan design, incentives, and participant education have frustrating results. We often assume (incorrectly) that if we give people the right information and financial carrots and sticks, they will:

  • Adopt healthier behaviors such as saving for retirement and eating healthier, and
  • Make smart-consumer choices such as choosing high-quality, lower-cost medications and providers.

A logical structure of plan design, incentives, and participant education seems like it should influence employees appropriately, but too often these components have little — or even a negative — effect. In our frustration, we may conclude that employees lack information or moral strength, or perhaps that they have bad intentions. However, the data shows that’s not the case. Lots of people already believe in the value of the behaviors that are being promoted. Instead, inattention and inertia lead to behaviors that don’t match what they want to do.

Strategic Framework

In The Power of Fifty Bits, Nease shares a framework of seven strategies to overcome inattention and inertia in your workforce — strategies that have been proven to measurably improve choices and behaviors. It’s the first practical model I’ve seen of how to apply the principles of behavioral economics to business issues such as workforce health engagement.

Fifty Bits

From “The Power of Fifty Bits” (HarperCollins, 2016)

  • Three “Power” Strategies
    • Require Choice (Active Choice) — Stop people briefly and compel them to deliberately choose among options.
    • Lock in Good Intentions (Pre-commitment) — Allow people to make decisions today about choices they will face in the future.
    • Let It Ride (Default) — Set the default to the desired option and let people opt out if they wish.
  • Three “Enhancing” Strategies
    • Get in the Flow — Go to where people’s attention is likely to be naturally.
    • Reframe the Choices (Set the Frame) — Carefully choose words and metaphors to set the framework that people use to consider options.
    • Piggyback It — Make the desired choice or behavior a side effect of something people already like or are engaged in.
  • One “Über” Strategy
    • Simplify … Wisely — Make the right choices frictionless and easy to understand and apply; make the wrong choices more difficult.

Real-Life Examples

By sharing stories that illustrate how the strategies have been applied to actual business situations, as well as data about the results, Nease allows readers to conceive of ways to apply the strategies to their own business needs.

Concise, Practical, and Entertaining

In contrast to academics and scientists providing excruciating detail for every finding, Nease offers rules of thumb that may not be 100% accurate but will work most of the time. I read the book in one sitting, thanks to its brevity and enjoyable stories.

To learn how to apply the strategic framework, pick up a copy of The Power of Fifty Bits, or catch my podcast interview next month with author Bob Nease.

Bob Nease, PhD, is the author of The Power of Fifty Bits: The New Science of Turning Good Intentions into Positive Results. Bob served many years as the chief scientist at Express Scripts, a Fortune 25 healthcare company dedicated to making the use of prescription medications safer and more affordable. Bob was also an associate professor of internal medicine at Washington University in St. Louis and an assistant professor at the Geisel School of Medicine at Dartmouth College. He is the author of more than 70 peer-reviewed scientific articles, and inventor on six US patents.


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