Tag Archives: behavioural design

Dealing with Fraud

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The incentive structure of Wells Fargo has been rightly criticized for the fake account scandal. The roasting of Wells Fargo CEO at the Senate panel hearing has also brought to question the responsibility of the senior executives. However, the overall narrative may be missing an important component – Perception of Risk.

We can safely assume that the front end employees, who carried out the transactions, were largely aware of the illicit nature of their actions. Most likely they also knew the potential consequences such as losing their job, facing charges or even serving prison time. How did the employee’s perceive these risks? What factors moderated their risk perceptions?

These are difficult questions. Unlike the incentive system that is tangible and easier to measure, risk perception is not. Risk is a feeling and feelings are hard to quantify. Our feelings may be moderated by our goals, our ability to deal with outcomes, our past experiences etc. They are also influenced by our social context. The social norms prevalent can easily override the written rules and policies. If people around us are performing deviant behaviors such as the one we are dealing with in this case, we are more likely to follow them. With over 5000 employees implicated, we can expect this issue to be present.

Alternatively, employees may be managing a very different kind of risk. For example, fear of losing their job in the immediate future. The temporal aspect of this risk may amplify it even further and employees might rate it significantly higher than the risk of getting caught in the far future.

So while we are discussing changes to structural aspects such as incentives and punishments, we also need to give adequate attention to the softer side of the issue. We need to design strategies to moderate the risk perceptions. Conventional tools such as awareness / education based trainings have limited impact. This is especially true when the behavior in question is fairly obvious. After all, there is nothing gray about opening a fraudulent bank account. Interventions that provide continuous feedback closer to the work context might be more effective.

This still leaves us with the question of measurement. One way to do that may be identifying lead behaviors. For example, are employees more forthcoming in discussing or informing potential issues? Are managers rewarding such positive behaviors? Are we seeing an increase in minor deviances? Measuring these behaviors can provide organizations the relevant prediction capabilities and also the time to activate preventative strategies. 

Managing organization risks requires focusing on both top-down and bottom-up issues. While we hold the executives responsible to develop the right kind of organization structures, we also need to design tools that ensure alignment of behaviors across the system.

Image Source: The Intercept

Is the end of one-child policy, beginning of a new experiment?

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As per the recent NY Times article, one of the biggest human experiment “One-Child Policy” has come to an end.

The policy came into effect in the 1970s as a response to the concern that the population growth was impeding economic growth. The reversal seems to be a response to a new problem – aging of the population.

The ethics and rationale behind such government interventions have been and will continue to be debated in the public policy and macroeconomic circles. But lets view this problem from a different lens – dealing with a wicked problem.

Continue reading Is the end of one-child policy, beginning of a new experiment?

Getting emotional about razor cartridges

How do you feel about these two Gillette razor blades? Do you like one over the other? Which one would you use?

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Though they may seem very similar except for the very obvious color choice, I feel that there will be a big difference in the way the two are used. The key is the color.

The one on the left, designed for Gillette Fusion razors, was launched earlier. The one on the right, designed for Gillette Fusion Power razors, was an enhancement to the product line. Thoughtfully or not, the designers have hit upon a great idea.
Continue reading Getting emotional about razor cartridges

Why do we still discriminate?

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Growing up in a socialist economy comes with its unique set of experiences. One particular experience that stands out in my memory is the struggle to get through the engineering school admission after Grade 12th. Like any struggle, this too is filled with mixed emotions – anxiety due to the uncertainty of the future and frustration due to not always getting the top choice. 

But there was one more emotion that I experienced that day. As I look back, it seems extremely unreasonable today, however, it was totally justifiable at that time. It was the feeling of anger, a feeling mainly directed towards the groups that were given special reservations at most colleges under the Affirmative Action policy in the Constitution. Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classes (OBC) are the primary beneficiaries of this policy and they qualify since they were traditionally marginalised and underrepresented in most professional communities. 

These reservations are also extended in certain jobs particularly ones that are part of the State and Central government machinery. While this policy has been criticised due to multiple problems, it has helped a large number of people by giving them opportunities that otherwise would not have been within their reach. But the feeling of anger amongst those who are not eligible seems to be present in both the education as well as the professional communities. 

This feeling has an interesting parallel to one experienced in western countries in their dealings with racism. In the book Appraisal Processes in Emotion Ira Roseman, a social psychologist at Rutgers University, explains the change in the form of racism from the traditional “old fashioned racism” to a more “modern” form of racism. Most surveys indicate that in the United States, white racism towards blacks has come down significantly. Usually, this refers to the traditional form of racism where white racists would look down on blacks, consider them unworthy of respect and intellectually inadequate and would exclude them from their groups. These behaviours are usually associated with the emotion of Contempt, a feeling for someone we consider lower in status. However, the modern form of racism is has moved from Contempt to Anger. This feeling comes from the attribution of negative acts such as those related to safety (burglary, shooting, etc.), exploitation of public resources by relying on welfare payments, etc. The behaviours associated with this kind of racism are usually around being hostile towards the other group, criticising their actions and believing that they deserve more severe punishment as compared to the rest of the society – essentially justifying lack of fairness towards the black community.

Now, if one looks at the history of the marginalised groups in India, one can see a similar pattern. Untouchability, which is now banned in the country, was openly practised in the society. The underlying emotions here are probably a mix of disgust and contempt. And these usually arise due to the same attributions as what we observed in the traditional form of racism – this group is low and unworthy of sharing our physical space and hence, excluded from most public forums. Over the past few decades this discrimination has gradually subsided, especially in the urban parts of the country. The differences in the stature of the so called upper and lower castes have come down. However, the special treatment in the education and professional forums has given rise to anger. The Indian society is still scarce on opportunities due to its significantly large population. So, the special allocation of resources takes away what is already insufficient. This gives rise to the discontent against the minority groups. 

Is there any value in understanding these nuances of discrimination?  

There are probably still enough parts of the country where untouchability exists. We are currently living in a society where we need to deal with both the old form and the new form of discrimination. The usual approach to handle discrimination is to develop interventions that embed equality in society. While this works when there is contempt, this may not be a good idea while dealing with anger. In fact the more equal we believe all groups are, the more hostility we will feel against the group that is blocking our resources. 

We need a different kind of intervention here. The book referred earlier offers an interesting example. Two different groups of boys had frequent altercations and felt both contempt and anger against each other. These two groups were then placed in a situation where they had to cooperate in order to achieve a common goal. By the end of the exercise, new friendships were formed decreasing the intergroup hostility. 

The key idea is to move from a situation where we believe that the goal of the other group is inconsistent to our own goals. This is what the army does where group learning is a significant part of training. By creating more avenues where citizens can come together to target a common goal can help us manage these negative feelings that are held amongst the different societal groups. 

Image Source: Here

Why didn’t the driver stop?

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In a a tragic accident between a bus and train in Ottawa, Canada, 6 people died, 8 were critically injured and 30 were hospitalized. The crash happened in the morning rush hour when the bus ran through the guard rail and collided with a train. Passengers in the bus reported screaming at the bus driver while on course but even that did not prevent the accident.

Investigations by the Transportation Safety board to determine the cause of the accident have begun but an obvious question is – Why didn’t the driver see the oncoming train even in broad day light? Did he fall asleep? Were there issues with the brakes? Is this a localized driving problem?

Accidents at level crossing is a universal issue. At least 6000 people die at level crossings every year and there is even an International Level Crossing Awareness Day (ILCAD) dedicated to this cause. Canada alone has seen 257 accidents in the past decade. In India, 63% of railway related fatalities are attributed to accidents at unmanned level crossings.

So what explains this behavior that seems to be prevalent globally? One possible explanation is the negative expectancy of the train by the bus driver. The way we see things is based on how we look for them. It is influenced by what we expect to see. So we are perceptually restricted and tend to pay attention to things that we expect. Psychologists term this phenomena as “Inattentional blindness”. This famous Selective Attention Test cleverly demonstrates our propensity to miss things.

Why do we suffer from this problem? It is actually an evolutionary mechanism to help us cope with the sensory chaos in the world. It helps us makes sense of the infinite visual stimuli that is always present around us and act accordingly. However, in certain cases this mechanism may backfire.

The attention spans of experienced drivers who have driven through a place multiple times tend to be very low due to the similarity and monotony of the environment. The low probability of finding a train also influences their expectation. Thus, breaking this monotony and changing their expectation is key to managing this behavior. This is the focus of our solutions that have been implemented at certain unmanned level crossings in India. Refer this blog post for more details.

Could these solutions prevent this tragedy? We can’t be certain but our research shows they can.

Image Source: Here