The iceberg sank the unsinkable ship; it’s the villain of Titanic and it’s Grumpy Cat’s favourite character. But was the iceberg really to blame for this momentous event? Was it the iceberg that caused the Titanic to sink, or could it perhaps have been the lookout in the crow’s nest that didn’t have binoculars, or was too cold to focus on what he was doing?
In South Africa today we hear people voicing their opinions daily about corruption, inflation, the petrol price and toll roads. Companies are complaining more and more about lower productivity, increasing costs of motivating employees and higher levels of dishonesty. Could these be modern moral dilemmas or simply the manifestation of age-old behavioural biases that we are only now beginning to understand?
Avoid reactionary decisions
Economists claim that the world is predictable, but this’s not true. If this was correct then no one would drive expensive cars, because the point of a vehicle is to get from A to B, and therefore the smallest, cheapest car would suffice. Economics don’t frame people’s choices; people’s behaviour and their reactions frame choices.
What people often fail to realise is that decisions are made according to the limited information they have at hand. All they see is the tip of the iceberg. This means that decisions are made in a reactionary manner, without being fully aware of all of the facts.
An example of this is a study that was done by Coca Cola to see whether people preferred Coke or Pepsi. In a one sip taste test, people preferred Pepsi. Coke panicked and changed its formula, which no one liked and eventually Coke reverted to Coca Cola Classic. The point was that people liked one sip of Pepsi more because it was sweet, but if they had to drink a whole can it would be too sweet, which made Coke the preferred soft drink all along.
Another example of this is a mine that we consulted for. The employees were leaving early and this was costing the mine a lot of money. Managers would dock their pay and threaten them, but this didn’t work.
Eventually we discovered that the reason for these employees leaving early was not because they were being lazy, but because the geysers at the compounds were too small, so they were trying to be the first back in order to be able to shower in hot water. The geysers were replaced and the staff stopped leaving early, upping productivity and saving the mine a lot of money.
Be informed, then act
How then do managers guide their staff in a manner that is fair, non-reactive and that allows them to take in the whole picture? There are five steps which managers should follow to assist in changing employee behaviour.
Firstly, it’s very important that managers frame their requirements in such a manner that the employees understand what is expected of them. Secondly, it should be ensured that what is required of them is available or possible to do.
Managers should also consider the crowd effect and whether requests can be complied with without breaching social norm rules that govern our behaviour. People must be given choices of what to do, but not too many, and, lastly, factors used to make decisions should be channelled in a manner that will make the decision process as easy as possible.
The biggest question we should ask ourselves when considering people’s behaviour is; what is it that people really want? The answer to this, in simplified form, is that people want to feel like they are in control, they want to feel that they are progressing towards something, they want to feel connected and they want their decisions to lead them towards the accomplishment of some form of vision or meaning.
The full chain of events
If people’s perceptions, usually based on only the tip of the iceberg, are the propulsion behind their decision making processes, then understanding some perceptions could aid in understanding people’s choices.
Five perceptions regarding sales, for example, include that there is no real sense of value for money, that emotions trump rationality every time, that the decision process needs to be simplified, that people dislike losing more than they like winning and that people learn from others.
Why don’t we understand? Because we don’t grasp the full chain of events that led people to a particular decision. There are innumerable factors which play a role. When people begin to dig deeper and look below the water at what the rest of the iceberg is made of, a whole new world of possibility and understanding is opened up.