The Big Impact of Small Changes

Dan Heath: I’m Dan Heath, and this is Choiceology.

Speaker 2: Has there ever been any close calls, because somebody wasn’t paying attention?

Speaker 3: Yeah, actually, a co-worker just got in a collision the other day from here, with another bike, because they were both trying to get on, but sharing with a pedestrian’s no fun either.

Dan Heath: We’re on the street in a typical North American city at a spot where cars, and bikes, and pedestrians converge, and things don’t always go smoothly. The reason we’re here? To try a little experiment in traffic management. But we’re not talking about signs, or whistles, or police handing out tickets; this experiment will barely be noticeable. We aim to show that small changes can make big and positive differences: on bike paths, yes, but also in things like street crime and organ donation. It might be counterintuitive, but all these things are connected by subtle, sometimes invisible, structures—structures that surround you and have a surprising influence over how you move through the world. By the end of the episode, you’ll start to notice them everywhere.

This is Choiceology, an original podcast from Charles Schwab. It’s a show that reveals hidden psychological forces, forces that affect the way you make decisions about everything from the route you take to work in the morning, to how fast you drive, to how you spend your money. It’s about understanding human behavior, avoiding expensive mistakes, and making the best choices for your future.

Before we get the results from our little test in traffic management, let’s travel to a different city for an experiment that rose from the ashes of social unrest.

It’s 2011, August, many parts of London are on fire. The city is experiencing the worst riots in decades.

Tara Austin: So, across the capital, in Hackney, in Woolwich, in north London, in south London, across the capital we saw horrendous scenes of properties being burned down, looted, and this was … it was a sort of free-for-all; people went crazy, people went mad, young people in particular.

Dan Heath: This is Tara Austin.

Tara Austin: I am the creative strategy director for Ogilvy Change.

Dan Heath: So, why were there riots in the streets? Well, it started as perceived injustice.

Tara Austin: In the summer of 2011, the police shot dead a young man in north London.

Dan Heath: The young man was suspected of gang ties and carrying a handgun, but it was perceived, by many in London, as a racially motivated shooting.

Tara Austin: At the time, this one shooting triggered a series of events where young people in north London started to fight with the police, and that, in turn, triggered some copycat behavior across the capital.

Dan Heath: And quickly spiraled out of control: It became a series of riots.

Zaffar Awan: It was a scary, scary moment.

Dan Heath: This is Zaffar Awan.

Zaffar Awan: I was the owner of Cellphone City at the time of the riots, and these lads just went from shop to shop, they then started to set buildings alight, the pub was burned down, and around the whole of the square, went into the bank. Anything they could find, they were free to do whatever they wanted.

Dan Heath: By the time it was over, some estimates pegged the cost of riots at around $400 million. Many Londoners were wondering how things had gone so wrong, why people would destroy their own neighborhoods. Tara Austin was thinking about how this kind of violence and damage might be prevented in the future.

Tara Austin: I think everyone in London had been very affected by what happened. It didn’t make sense that people were rioting on their own doorsteps. It was quite a troubling time.
Dan Heath: And this is when Tara gained some insight from a strange place: a food industry magazine.

Tara Austin: I was reading The Grocer magazine, and the editor of The Grocer made an interesting point, and something I’d never considered before, which was: After the riots, that the government needed to relax the planning laws in order to allow shopkeepers to put up shutters to defend their properties. And, for the first time, thought about shop shutters, which are obviously ubiquitous, they’re all around us, and I’d never considered them before.

Dan Heath: So, you know those shutters you see in some big cities? Metal rolling doors that shopkeepers pull down after they close to keep their shop windows secure? They seem like a good idea. But think about the message they’re sending to people who walk by: This neighborhood isn’t very safe.

Tara Austin: It’s a visible signal of the presence of crime. So, much like we often talk about the broken windows theory from New York where one broken window on a block was the signal that the block was effectively lawless, similarly shutters are a visible signal of the presence of crime and whether you consciously think about that …

Dan Heath: So, Tara got to thinking: Shutters are good for security, but they send a bad signal to the community. Could you get the extra security without sending the bad signal? Or, even better, could you figure out how to send a positive signal? She was on the verge of an important insight, and her breakthrough was sparked by the work of a local artist.

Tara Austin: There was an artist by the name of Ben Eine, he’d been spray painting the shutters along the seafront in these very jolly, lovely colors, with big letters on them. He’s quite a famous artist. And so, he’d been painting shop security shutters and making them street art.

Dan Heath: Tara started to see that shutters weren’t just tools of security; they were blank canvases.

Tara Austin:  Because they were relatively flat media surfaces, and people like Ben Eine were using them to create street art, well, couldn’t they carry another message? Something that would, subconsciously perhaps, deter people from ever rioting again.

Dan Heath: Now, let’s just take a moment to appreciate how weird this idea is. You’ve got these metal security doors that roll down to keep burglars out, and Tara Austin is saying, “No, actually they’re billboards for deterring potential rioters. These shutters can send a message.” But what kind of message should it be exactly? For the answer, she turned to science.

Tara Austin:  So, in the 1940s there was an ethnographist called Konrad Lorenz. Ethnography is the study of human behavior, and he posited something called the baby schema.

Dan Heath: You know the baby schema even if you’ve never heard of it before. It’s basically the set of facial features that makes us say, “Aww.”

Tara Austin: So it’s round cheeks, big eyes, small features and a very round face, and this we recognize as being a baby, an infant, and we see it in babies but we see it in animals. So, the pug dog has high baby schema. The mini car in the U.K. has high baby schema. Anything that looks a little bit like a kind of cute face has high baby schema. So when we perceive something with these particular kinds of proportions, it stimulates a part of the brain that encourages nurturing behavior.

Dan Heath: So the baby schema makes us care, it triggers our nurturing instincts, and this is the epiphany moment. Austin puts together the baby schema with the security shutters …

Tara Austin: What could we paint on these shop security shutters that could really subvert their meaning and help them encourage greater social cohesion? What could do that to the maximum degree? Well, babies were it.

Dan Heath: Tara and her team at Ogilvy Change knew the science behind the baby schema: how it would encourage this nurturing behavior and a caring response in people, but they also wanted to find a way to connect their project directly to the community.

Tara Austin: And Woolwich had been very badly affected by the riots, using local babies was really important to us to encourage the community to really reflect on itself and the future of that community. We don’t want people to reflect, particularly, on the babies in a very conscious way but just to see them, to perceive them, and for it to make a difference to how they felt when they’re in that place, in Woolwich.

Dan Heath: So the first step was: Can we convince local shopkeepers in the neighborhood of Woolwich to let us paint babies on their security shutters? This was not an easy sell. I mean, what if the babies attract vandals rather than repel them? But they found one business owner brave enough to take the gamble—our phone shop owner, Zaffar Awan.

Zaffar Awan: I thought it was an initiative that could only help. It wasn’t going to be something that would solve the problem, but it was something that would involve the community because the pictures were of local children.

Tara Austin: He just loved the thinking, using psychology in this way, and so we painted his shutter first.

Zaffar Awan: See, I remember the night when we were actually doing it because it had to be done through the night, and we had a crowd of people watching the artist actually go through. And this was the middle of the night, we’re looking at, what? Two, three o’clock in the morning and we had floodlights on. And all of a sudden the police turned up, and so they thought that somebody was actually putting graffiti on a shop and they wanted to find out. Well, obviously, we told them who we were, so it was OK in the end, yeah.

On my window, right in front of you, you can see a smiling African child. His name is Max. He was three at the time. And then you’ve got three or four, as you can see in front of you, the other shutters as well, and one of the windows has got three children on it, another one’s got one, and they’re all of different races, and all very happy, smiling children.

Dan Heath: If you want to get a look, I’ve included some links to photos of the shutters in the show notes.

So, Woolwich has changed since those fateful riots of 2011, but did this modest experiment, painting faces of neighborhood babies on shop shutters, did it make any difference?

Tara Austin: We found, after the experiment, that anti-social behavior had reduced in the area. We’ve been working with a man called Keith Dear, from Oxford University, and he partnered with police to look at the data that was available five years on, this year, and that research has suggested that there’s been around a 24% reduction in anti-social behavior and crime in the area.

Dan Heath: Now, to be fair, there are a lot of factors that contribute to crime rates, but even if you tighten up the analysis, the numbers are still pretty impressive.

Tara Austin: At the very least, because there are a lot contributing factors towards crime in any one place, we can say that, versus a control nearby, the next street over, if you like, that there’s been a reduction of 10% versus that control.

Dan Heath: So, while it’s difficult to completely separate out the effects of these murals, Tara Austin and Zaffar Awan believe it has made a real difference.

Zaffar Awan: Oh, yes, I think the whole area is much safer than it used to be, certainly when we moved in initially.

Dan Heath: And has Zaffar been vandalized since?

Zaffar Awan: No. No.

Dan Heath: Tara and her team at Ogilvy Change had enough success with this small project that they’re now expanding into another neighborhood on the other side of London.

Now, let’s be clear here: We’re not suggesting that the world is one coat of paint away from solving the problem of violence. This is in no way a universal fix for crime, but it’s precisely because crime is such a complicated, multivariate issue that it’s so surprising that painting a baby on a shutter did anything to move the needle, and yet it did. Tara feels strongly that she’s onto something that could make a real difference, not just in London but in any city where vandalism and crime are an issue.

Tara Austin: It’s cuing, subconsciously, cuing the presence of human hand, some care, some love that has invested in that area and is saying to people, “You’re welcome here. This is a good place.”

Dan Heath: Tara Austin is the creative strategy director for Ogilvy Change, an agency which uses behavioral science to help change behavior in areas of business, public policy, as well as for social good.

Now, what do these crime preventing babies have to do with bike traffic or your bank account? Let’s go back to that city intersection, the one where we started our own little experiment at the beginning of the episode.

It’s a tricky spot where cyclists and pedestrians converge near a busy intersection with a lot of car traffic. So let me try to paint a mental picture of this corner of confusion. Picture in your head a capital letter K. So that three point where the lines come together, that’s the trouble spot. And the straight up and down line, that’s a street, cars going, bikes, pedestrians. The top diagonal line in the K, that’s a bike path, it slopes downhill and it converges on that trouble spot, and then many bicyclists need to do an abrupt U-turn just at that spot so they can keep continuing downhill on the bottom diagonal in the K. And that spot, a trouble spot, is precisely where pedestrians are arriving from crosswalks from two different directions. So even if you can’t really imagine this, just trust me, this is a mess.

So, we have a hotspot for collisions, we wanted to see if we could make a very small change that might make the whole thing safer. So first, we wanted to get some impressions from the people who use this intersection.

Speaker 6: I walk through this intersection almost every day and I have seen people … I saw a guy get hit.

Speaker 7: I’ve seen a couple of people have close calls here. Luckily I haven’t myself, but it’s a pretty sketchy intersection.

Speaker 2: That was another close call. And here it’s because the pedestrian didn’t even look out to see if it was a walking light.

Dan Heath: So clearly, a pretty dodgy intersection. Here’s the experiment; this is all we did. We unrolled a bit of yellow duct tape; we ran a strip along the sidewalk to divide the bike U-turn zone from the pedestrian area. We didn’t add any signs saying, “You must do this.” Just a line of tape on the sidewalk.

Speaker 2: See if people could share the road.
So far, everyone is going on the proper side of their lines.

Dan Heath: We caught up with some of the cyclists to see if they even noticed the tape.

Speaker 8: I ride this route every day for a few years, and I was oblivious to the tape this morning.

Speaker 2: Do you think something like that could be helpful?

Speaker 8: Absolutely, 100%.

Dan Heath: So did it work? Well, this is very unscientific, but 80% of the people we observed stayed naturally on their side of the line. It was a big change in behavior from before the experiment began, and all it took was a little bit of duct tape.

In both of the examples you’ve heard so far, the babies painted on shop shutters, the sidewalk bike path experiment, a concept of behavioral economics was applied—it’s known as a nudge.
The term nudge comes from a 2008 book of the same name by law professor Cass Sunstein and the behavioral economist Richard Thaler, who won the Nobel Prize in economics in 2017 for his work in the area. Nudge discusses the countless small tweaks that can influence the choices we make. Here’s an example: In Austria, over 90% of the citizens are registered organ donors. In Germany? Fewer than 15% are. Why is that? Are there vast differences in the cultures? Are Austrians more naturally generous? No. In Germany, you have to opt in to be a donor. In Austria, you’re opted in by default and you can opt out if you’d rather not. That’s a nudge. It’s amazing that something so subtle, and simple, and low-cost could have such a huge impact, but it’s true, and nudges are being used by individuals, and businesses, and governments all over the world to affect real change.

Sille Krukow: My name is Sille Krukow. I’m a behavioral design and nudge expert.
Dan Heath: Yes, you heard that right, she just called herself a nudge expert. Often, the people who create and design these nudges are referred to as choice architects, and Sille Krukow is one of them.

Sille Krukow: Basically, we’re influenced by nudges everywhere we go. So for example, the white lines on the road nudging me to stay on the right side of the road. The red lines when I’m parking. The set of lights that tells me to stop, and so forth. So basically, everywhere we go and everything we interact with is what we call choice architecture, and choice architecture is a combination of different nudges that helps us to navigate in our society.

Dan Heath: So instead of placing restrictions or changing economic incentives, nudges influence behavior by changing how choices are presented in the environment. And here’s the reason why nudges are so effective at changing behavior, especially compared to other approaches.

Sille Krukow: Because we make the right decisions the easy ones.

Dan Heath: That’s a key point: They make the right decisions the easy ones. Or to put it another way, as a choice architect, you want to get laziness on your side. And to see how to do that, you’ve got to understand one of the most fundamental findings of modern psychology, which is that we have two different systems in our brain: the reflective system and the automatic system. The reflective system is slow, thoughtful, deliberative. The automatic system is faster, more like autopilot, reacting in the moment. So the reflective system decides, “I’m going to drive over to Brian’s house.” That’s a conscious thought process. But then when you’re driving you might do that thing where you suddenly come to and realize you can’t remember the last five miles of the road, that’s the automatic system at work.

The trouble comes when these two systems clash. The reflective system decides, “I want to go on a diet and lose some weight.” But then we find ourselves ordering a slab of cheesecake at a restaurant for dessert, we succumb to the cravings of the automatic system. And that’s why nudges are often targeted squarely at the automatic system.

Sille Krukow: When you work with nudging, you’re basically trying to design for the automatic thinking because we have plenty of good solutions for the reflective thinking: We have educational programs. We have the internet providing you with all kinds of knowledge. But what we don’t have is good choice architecture. So surroundings in decision-making moments that makes it easy for the unconscious processes to follow our long-term goals, like creating a savings account, because what happens, a lot of the time, is that we reflectively say, “OK, well, I want to start saving for the future because I want to be able to have a good life when I grow old.” But then it’s Christmas, and then we need to buy a present, and then it’s spring, and then we need to go on an Easter holiday, and so forth, and so forth.

So that ambition of start saving for the future never gets translated into an actual action, and that’s where nudges come in because they can help us succeed despite of our automatic behaviors and unconscious processes.

Dan Heath: So how can we nudge ourselves to save more for retirement? Think about that organ donation study. There’s a huge power in default options and, in fact, the people who set up retirement plans for big companies have found exactly the same thing. They increasingly use three defaults: One, they auto-enroll employees into retirement savings plans; the employees can always opt out if they want to. Two, the employees are often auto-invested into a diversified mix of funds or into what’s called a target date fund, which divides up their portfolio into a mix of stocks and bonds determined by when they’re going to retire—the point being that they don’t have to stress out about constructing a portfolio. Three, the plan may even auto-escalate, meaning that your contribution to your account goes up automatically over time. Maybe it’s 3% this year and 4% next year. Auto-enroll, auto-invest, auto-escalate. Nudge, nudge, nudge. Does it work? Like gangbusters. Just the auto-enrollment feature alone increases employee participation by almost 50%. When you channel laziness, you can accomplish anything.

Sille Krukow’s favorite nudges are ones we’ve all encountered and, like our bike path experiment, they’re designed to prevent accidents and, in many cases, they save lives.

Sille Krukow: Just simple things like, for example, the countdown on the set of lights which reduces the amount of people who cross on red lights and therefore the amount of people who get killed in accidents. To me, that’s such a simple image, giving us feedback on time, and it has such a huge impact. So to me, what I really, really, love and what I look at when I’m in my nerdy mode is road design. Just like the little rumple stripes on the side of the road, which prevents us … because it wakes our reflective thinking when we’re driving in automatic mode, so it prevents us from crashing into the side. Those things are so easy to understand, and it’s so tangible, it’s so simple and efficient. So to me, that’s what it’s all about—creating those super simple solutions.
Dan Heath: There are many ways you can take advantage of nudges in your personal life. If you’re cutting back spending, leave your credit cards at home and carry cash. Studies show people who do are more frugal. If you’re cutting back on sweets, move your candy stash to the far end of the house. One study found that when secretaries were given a bowl of chocolates, they ate twice as many when the bowl was on their desk as opposed to a filing cabinet just six feet away. Of course, your smartest option is to throw out the sweets entirely, but that’s a bit more like a shove than a nudge.

Sille Krukow: So we want to do the right thing, the good intentions are there and are really, really there, is my experience, we just have to make it easy for us to succeed, and easy in a different way than we have been doing so far.

Dan Heath: Sille Krukow is a behavioral design and nudge expert. She’s also a founder of an organization called Krukow, which does applied behavioral science.

So hopefully, now you have a sense of some the ways that nudges affect public policy, neighborhood safety, even your own bottom line and I bet you’re going to start seeing nudges wherever you go. I’ve started wondering: Am I being nudged right now? Nudges on the street, nudges online, nudges at the supermarket, nudges at restaurants, nudges at school, nudges at the airport, nudges at the …

This has been Choiceology, an original podcast from Charles Schwab. If you’d like to know even more about nudges, behavioral design and choice architecture, I’ve put a link to bonus materials in the episode show notes, which you can find on your device right now. If you’ve enjoyed the show, please leave us a review on Apple Podcasts. You can subscribe there, too, or anywhere else you listen. It’s free and if you subscribe you’ll never miss an episode.

Next time on Choiceology, another hidden force that may be influencing the way you make decisions around value and risk, whether it’s on the golf course, in the classroom or in your investment portfolio.

I’m Dan Heath. Talk to you next time.

Disclosure: All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.