Considering the Welsh Ministers’ Principles for Organisational Performance Management within a behavioural insights framework

This paper has been prepared for the Welsh Government Delivering Better Outcomes Team by Rachel Lilley, Aberystwyth University, 2016

Behavioural insights and policy making- an overview

“Economic thinking is changing. If this thesis is correct – and there are many reasons to believe it is – then historical experience suggests policy and politics will change as well. How significant that change will be remains to be seen. It is still early days and the impact thus far has been limited. Few politicians or policymakers are even dimly aware of the changes underway in economics; but these changes are deep and profound, and the implications for policy and politics are potentially transformative.” 1Eric Beinhocker

Over the past 15-20 years behavioural economics, drawing from psychology, neuroscience, sociology and the behavioural sciences has started to significantly influence both the design and process of policy making globally. Early on in his new Government, David Cameron set up The Behavioural Insight Team2; they became the world’s first government institution dedicated to the application of behavioural sciences. Their original objectives, which continue to this day, are to draw on ideas from the behavioural science literature to, amongst other things, “Improve outcomes by introducing a more realistic model of human behaviour to policy”. The team now leads the world in its field and has become an independent organisation. Meanwhile the whole industry of behaviour change has grown and there are now a significant number of approaches developing which consider how to apply behavioural insights to policy. These include Mindspace3, EAST4, Organiser5, ISM6, and The Behaviour Change Wheel7.

The main influence for this behaviour change is work by Daniel Kahneman and Amos Tversky which is summarised in Kahneman’s book, Thinking, Fast and Slow8. The work challenges the ‘rational actor’ model which underpins much of our approach to economics and policy making. Kahneman outlines a dual process of decision making, System 1 thinking which is fast, intuitive, and emotional and utilises short cuts (cognitive biases) in

1 New Economics, Policy and Politics, Eric Beinhocker. Complex New World, Translating new economic thinking into public policy, Edited by Tony Dolphin and David Nash August 2012, Institute of Public Policy Research. Also at http://evonomics.com/the-deep-and-profound-changes-in-economics-thinking/ (accessed 16/08/2016)2 http://www.behaviouralinsights.co.uk3 Mindspace, Influencing behaviour through public policy, Halpern et al 2010. http://www.instituteforgovernment.org.uk/our-work/better-policy-making/mindspace-behavioural-economics4 EAST, four simple ways to apply behavioural insights. Behavioural Insights Team, 2014. http://www.behaviouralinsights.co.uk/publications/east-four-simple-ways-to-apply-behavioural-insights/5 ORGANISER: A behavioural approach for influencing organisations; Department of Energy and Climate Change, 2015. https://www.gov.uk/government/publications/organiser-a-behavioural-approach-for-influencing-organisations6 Influencing Behaviours - Moving Beyond the Individual - A User Guide to the ISM Tool, http://www.gov.scot/Publications/2013/06/8511/downloads7 The Behaviour Change Wheel, A Guide to Designing Interventions, Susan Mickie, Lou Atkins & Robert West, 2014. http://www.behaviourchangewheel.com8 Kahneman, D., 2012. Thinking Fast and Slow. Penguin, London.

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order to make quick decisions and System 2 thinking which is slower, more reflective and, by its nature, able to deal with new and novel information. Both forms of thinking are essential, but both have their down sides. Slow thinking takes time in a world where we are making over 70 decisions a day9 meanwhile fast thinking tends to be habitual, automatic, intuitive and takes ‘cognitive shortcuts’ which means it is not objective and prone to mistakes, particularly where problems are complex, novel and solutions are uncertain.

In 2014 Aberystwyth University published Nudging All Over The World demonstrating the policy impact of behavioural insights globally10 , and in 2016 a European report, collated practical applications of behavioural insights in policy across Europe11 In 2015 the World Bank group produced a flagship report “Mind, Society and Behaviour” which was one of the first comprehensive guides to understanding why and how behavioural insights should be applied to the policy making process. The World Bank Report argued,

“Economic man is a fiction, not a reality. Policies that assume that rational decision making will always prevail can go astray in many contexts and may miss opportunities for low cost, high efficacy interventions. Updating the standard assumption about human decision making is essential to pushing forward the frontier of development policy making.” World Bank12

The World Bank report suggests a useful framework of understanding to help the policy maker approach policy making differently. It is focused around three assumptions:

- That humans think automatically. This contrasts with the view that we can gather, assess and perform complex calculations and consider all possible routes. In order to operate quickly instead we use mental short cuts, or cognitive biases, which simplify the problem and in doing so potentially overlook important information.This document discusses how these automatic thinking and cognitive biases might affect performance management.

- That humans think socially. We are not autonomous or independent thinkers. We are inherently social, in a constant dance between co-operation and competition. We are strongly affected by social norms, and we act on the basis of desired and shared identities.

- This document discusses how the fact that we think socially affects our assessment of the effectiveness of the services we are working with.

- That humans think with mental models. When we receive new information we do not see it completely objectively, rather we understand it through existing mental models which are shaped by our culture, our past experiences and the contexts in

9 The Art of Choosing: The Decisions We Make Everyday of our Lives, What They Say About Us and How We Can Improve, 2010, Sheena Iyengar10 Assessing the Global Impact of the Behavioural Sciences on Public Policy, 2014, Mark Whitehead, Rhys Jones, Rachel Howell, Rachel Lilley, & Jessica Pykett Nudging all over the World, https://changingbehaviours.files.wordpress.com/2014/09/nudgedesignfinal.pdf11 Behavioural insights applied to policy: European Report 2016. Joana Sousa Lourenço, Emanuele Ciriolo, Sara Rafael Almeida, and Xavier Troussard; http://publications.jrc.ec.europa.eu/repository/bitstream/JRC100146/kjna27726enn_new.pdf

12 Mind, Society and Behavior, ibidhttp://www.worldbank.org/content/dam/Worldbank/Publications/WDR/WDR%202015/Chapter-1.pdf

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which the decisions are made. Making people aware of their tendencies to use mental models and offering new ways of thinking can, literally, expand their vision. This work is being utilised in recruitment practice and unconscious bias training. This document considers how, by acknowledging our default mental models and consciously opening to new frames and models, we can see and understand our services differently.

Performance management and behavioural insights – assessing the perfectly imperfect

When we hear the words: ‘performance management’ and ‘evaluation’ what do we associate with those words? When we hear something it triggers concepts, memories, and experiences from our previous experience of those words. We do this in order to understand them. The brain interprets information through existing mental models or frames. Cognitive psychologist George Lakoff says, “Our concepts structure what we perceive, how we get around the world and how we relate to other people. Our conceptual system thus plays a central role in defining our everyday realities”.13 We will understand the words according to previous experiences of and associations with performance management and evaluation that in turn will trigger automatic responses and habits which mean we will approach this performance management process as we have previous forms or processes.

Depending on your job role and your previous work in this area this could make you feel very positive, or very negative. It is very likely you will associate performance management with ‘demonstrating success’. For most of us, we will believe that when our organisations or managers are asking us to critically assess a service, they are really looking for us to show a job well done, that is what has been rewarded previously, therefore in our unconscious, default mode, that is what we will expect to repeat. As a result, we are unlikely to acknowledge and report mistakes.

In high-risk industries such as aviation, reporting mistakes has become a valued part of service improvement, and thankfully, has made flying extremely safe. Mathew Syed, in his work “Black Box Thinking” suggests that learning from mistakes is vital and that the “stigmatising attitude towards error” both pervades everyday life and severely limits our ability to improve our services. 14 This is backed by David Halpern, Head of the Behavioural Insights team. Halpern states that behavioural approaches to assessing work has shown that identifying points of failure and making small changes can reap disproportionate gains.15 Both Halpern and Syed quote organisations which have improved service delivery through rigorously researching, piloting and testing the ‘customer’ and how the customer engages with the service and being able to surface where they have been getting it wrong.

“We're terrified of not having the answers, and we would sometimes rather assert an incorrect answer than make our peace with the fact that we really don't know.”

13 Metaphors We Live By Paperback, 2003, George Lakoff, University of Chicago Press;14 Black Box Thinking: The Surprising Truth About Success, Matthew Syed. John Murray, 201515 Inside the Nudge Unit: How Small Changes Can Make a Big Difference. 2015, D Halpern. W.H. Allen.

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Kathryn Schulz, author of Being Wrong16

This is particularly true in highly visible activities (e.g. policy, advice to Ministers) where being seen to make mistakes is seen as failure and there is a deep fear of media and public criticism.17

“A major challenge for more adaptive approaches to policy is the political difficulty of failure. Learning from a portfolio of experiments necessitates that some experiments will fail. Evolution is an innovative but inherently wasteful process- many options are often tried before the right one is discovered. Yet politicians are held to an impossibly high standard, where any failure, large or small, can be used to call into question their entire record.” Eric Beinhocker, Economics Professor

Once we have set up an unconscious expectation that failure is not an option our biases will kick in. Our tendency is to want to simplify things. Evolution has designed our brains to take the easier route, to save vital energy. When we see complexity we tend to want to simplify things so we substitute a simpler question. This can lead to fundamental attribution error18 which prevents us considering more systemic reasons for individual error, and is a tendency for people to place an undue emphasis on internal characteristics (personality) to explain someone else's behaviour in a given situation rather than considering the situation's external factors. Evidence suggests that in these default modes we are “self-justification machines”19. This also links to a cognitive shortcut (system 1 thinking) called confirmation bias. This states that we tend to look for evidence that supports what we already think to be true and edit out anything that doesn’t fit that mental model.

Cognitive biases are now being taken seriously in the world of science and research. ‘System 1 thinking’ has a profound effect on the reporting of research, this has obvious parallels with (individual and) organisational performance management. Efforts are being made to help scientists ‘de-bias’ their ways of working, illustrated below in an infographic from Nature News, which was subsequently included in the 2016 Behavioural Economics Guide.20 You can see that they explain confirmation in terms of “hypothesis myopia”.

16 Being Wrong, adventures in the margin of error, 201ll, Kathryn Shulz17 Eric Beinhocker, Executive Director of the Institute for New Economic Thinking at the Oxford Martin School, University of Oxford. How the Profound Changes in Economics Make Left Versus Right Debates Irrelevant - Eric Beinhocker introduces the 'new economics' research programme, https://evonomics.com/the-deep-and-profound-changes-in-economics-thinking/18 https://en.wikipedia.org/wiki/Fundamental_attribution_error19 Johansson, P., Hall, L., & Gärdenfors, P. (2011). Choice blindness and the non-unitary nature of the human mind. Behavioral and Brain Sciences, 34(1), 220 https://www.behavioraleconomics.com/the-behavioral-economics-guide-2016/

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Performance management principles and behavioural insights

In 2016 the Welsh Ministers approved five principles for organisational performance management.

The principles are:1 Be clear about purpose2 Demonstrate responsibility and accountability3 Measure the right things4 Drive improvement5 Be open to challenge

These principles underpin the seven well-being goals and the sustainable development principle described in the Well-being of Future Generations (Wales) Act 2015 and the vision set out in the Williams Commission Report on public service governance and delivery, Devolution, Democracy, and Delivery: Improving public services for people in Wales (2014) 21.

The Performance Management Principles are a direct response to the critique and recommendations laid out in the Williams Commission Report. The report states that the public sector and public service delivery needs significant improvement. Issues such as over-complexity, lack of collaboration, weak leadership and poor and patchy performance management need to be addressed. It gives a number of recommendations which it believes will contribute to that improvement.

The principles reflect the recommendations and suggest that:- We are not clear (as) about purpose (as we could be)- We are not accountable or responsible (as we could be)- We don’t (always) measure the right thing(s)- We don’t use the information we have to drive the change we want (as well as we

could)- We are not (as) open to challenge (as we could be)

It is a statement of the obvious that all of us do our best and most of us believe we do all of the above. If we are not and do not do the above, then why not?

Behavioural economics may help give us some insight into the unconscious factors that may be contributing to “not knowing purpose”, “not being accountable” etc. in the same way that work with scientists and in recruitment biases is attempting to deal with unconscious biases in their work.

We have already discussed how the bias of fundamental attribution error affects where we allocate error in the system and how automatic (System 1) thinking and the use of familiar mental models may mean we are unable to see anomalies or mistakes.

The Williams Commission Report suggests that this unwillingness to see or be prepared to make mistakes is one of the key factors preventing improvement:

21 Commission on Public Service Governance and Delivery, Report, Jan 2014, led by Sir Paul Williamshttp://gov.wales/topics/improvingservices/public-service-governance-and-delivery/report/?lang=en

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“Organisations should move away from risk-averse and blame-heavy cultures which seek to mitigate failure rather than sustain success, and actively seek to manage risk” (p11)

Or, more simply put,

“We have so many mechanisms to guard against failure that we leave no space for success.” The Police and Crime Commissioner for Dyfed Powys.

Behavioural economics gives us new mental models and tools for de-biasing our minds and working processes. It triggers a more reflective (System 2) way of thinking which can consider the application of the principles and more creative, open and innovative ways of approaching performance management.

“The strength of standard economics is that is places human cognition and motivation in a black box, intentionally simplifying the messy and mysterious internal workings of actors (Freese 2009, 98). By using models that often assume that people consider all possible costs and benefits from a self-interested perspective and then make a thoughtful and rational decision. This approach can be powerful and useful, but in a number of contexts it also has a liability; it ignores the psychological and social influences on behaviour. Individuals are not calculating automatons. Rather people are malleable and emotional actors whose decisions making is influenced by contextual cues, local social networks and social norms and shared mental models. All of these play a role in determining what individuals perceive as desirable, possible, or even thinkable in their lives. The World Bank, 2015, 22

Eric Beinhocker23 lays out how traditional economic assumptions which inform us as individuals, networks, and institutions have changed in the light of the new economic model, and how this informs our understanding of dynamics, innovation and emergence (see next page).

22 World Bank 2015, World Development Report 2015: Mind, Society and Behaviour, Washington DC23 New Economics, Policy and Politics, Eric Beinhocker. Complex New World, Translating new economic thinking into public policy, Edited by Tony Dolphin and David Nash

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If we approach policy making on the basis of these new assumptions then Beinhocker suggests we need a new approach to policy making where:

1. Experimentation is more useful than prediction 2. Policies and institutions need to be as adaptable as possible3. Policymakers need to be less social engineers and more system stewards

This aligns with the World Bank report Mind, Society and Behaviour, discussed earlier, which suggests that policy informed by behavioural insights would incorporate a more iterative, learning and adaptive approach to the development and performance management of service interventions. This is demonstrated in the graphic below, taken from the World Bank Report, where a number of approaches may be tried and assessed and then more successful ones would be modified and tried again until the best approach was identified over time.

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Since 2013 Aberystwyth University has worked with Welsh Government, initially with the Natural Resources Division, to consider how new ways of understanding behavioural insights might usefully contribute to policy making.

The table below is based on this work to date, utilising behavioural insights and mindfulness in relation to the policy making process. Mindfulness is a human capability of “present-centred, non-judgemental, attention and awareness”24. Both mindfulness and behaviour change are interested in how we, as humans, attend to and process information and how this affects our behaviour. They are also both interested in the role of the automatic mind and emotions in our decision making.

Combining understandings from behavioural economics with the inquiry and present moment awareness capability offered by mindfulness makes for a potentially powerful tool to support better decision making.

It also offers a method of understanding behaviour change from the inside, first person, out. This improves learning integration which in turn improves its application in the workplace, particularly in engagement on all levels and in the design of services and interventions. It is still very early days for this research area, relative to therapeutic mindfulness, but there is promising related research emerging, including looking at the effects of mindfulness on status quo bias25 and the effect of meditation on attention and decision making26. Meanwhile a recent Harvard review of mindfulness at work suggested mindfulness and behavioural insights as a promising area for future study27.24 The benefits of being present: Mindfulness and its role in psychological well-being, Kirk Warren Brown; Richard M Ryan, Journal of personality and social psychology , 2003, Vol.84(4), p.822-84825 Hafenbrack, A.C., Kinias, Z., Barsade, S.G., 2014. Debiasing the mind through meditation, mindfulness and the sunk-cost bias. Psychol. Sci. 25, 369–376.26 Vugt, M.K. van, Hurk, P.M. van den, 2016. Modeling the Effects of Attentional Cueing on Meditators. Mindfulness27 Good, D.J., Lyddy, C.J., Glomb, T.M., Bono, J.E., Brown, K.W., Duffy, M.K., Baer, R.A., Brewer, J.A., Lazar, S.W., 2015. Contemplating Mindfulness at Work - An Integrative Review. J. Manag.

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The table below gives a map of how a mindfulness practice can effectively help people work with the radically different view offered by behavioural insights to integrate learning and help with the application of integrating a new approach to policy design and process. It develops the Beinhocker framework, showing the “new economic view’ versus the old economic view, the behaviour change theory that informs the new view and the potential that mindfulness has shown to support a shift to a more integrated and embodied understanding of the theories laid out in the behavioural insights.

Behavioural Factors

Old View Behaviour Change Theory

Mindfulness

Basis of decision-making

Humans make decisions based on maximising utility and assessing all information available using a cost/benefit analysis. They are connected and attentive to what is really going on most of the time.

We are less “homo economicus” and more Homer Simpson. System 1 and system 2 thinking, dual process theory28. Theories of Automatic mind, habits, bias, and key to behaviour change theory.“Most of us are out of touch with reality most of the time”29.

Meta awareness – aware of awareness, when linked with de-biasing training, we can be more aware of fast decision making, emotional aspects of decision making. Mindfulness has the capacity to make us far more present and connected to reality.

Nature of decision-making: objectivity and bias

Humans are objective. Biases are largely unacknowledged – though they are starting to be used in unconscious bias training and the recruitment processes

Cognitive biases exist, have been of evolutionary advantage but are also limiting. Many biases identified including: confirmation, optimism, bystander, halo, status quo etc. We use these and existing mental models to make quick decisions.

Increased capacity to see bias playing out. Practice enables practitioners to be open to challenge in relation to their own mental models and biases.

Relations with risk

Humans are able to assess risk in a balanced way.

Humans don’t assess risk well. See work by Gerd Gigerenzer and ‘risk literacy’.30 He suggests a lot of the time we are involved in defensive decision making – protecting ourselves by adding data and process.

Increased capacity to be aware of emotions. When dealing with risk we become tense and potentially more reactive. Mindfulness gives us a capacity to remain relaxed and to self-regulate making it easier to be comfortable with risk.

Complexity and

Uncertainty is often unacknowledged or unconsciously

When faced with complexity and uncertainty we tend to

Like risk, uncertainty has an embodied, physical and reactive

28 https://en.wikipedia.org/wiki/Dual_process_theory29 The Economist Guide to Decision-Making: Getting it more right than wrong, 2012, Helga Drummond, Economist Books.30 Gerd Gigerenzer is the Director of the Harding Centre for Risk Literacy. www.mpib-berlin.mpg.de/en/staff/gerd-gigerenzer

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uncertainty addressed with control strategies or processes which attempt to make things more certain.

simplify problems, using biases and existing mental models. This underpins a lot of behavioural theory.

state which means we avoid it. A practice of mindfulness can help us become aware of how we feel when faced with uncertainty, giving us an increased capacity to be with it.

Meaning The fact that we are “meaning making or self-justification machines’ is largely ignored, there is an assumption that humans are objective and constantly a ‘blank page’ receiving information and processing it without reference to irrelevant narratives.

Particularly George Lakoff’s work, as summarised in “Don’t Think of An Elephant”31. We understand new information through relating it to existing frames/schemas/stories. Frames of understanding create whole cultures. This then relates to the often used phrase, “culture eats change for breakfast” or “culture beats strategy.”

Mindfulness, plus some inquiry can give ‘insight’ into the less than conscious narratives that are informing our lives, our organisations and the interpretation of new information. It can also help us formulate and use narratives which align with our values.

Mistakes Mistakes are not allowed. Humans constantly aspire to being ‘perfect’ and ‘optimal’ and as such struggle to admit to be vulnerable and admit ‘failure’.

Mistakes are inevitable and in order to deliver services effectively and also to innovate. We need to see, understand and learn from mistakes. See the aviation industry toolkit: Systems Thinking for Safety: Ten Principles32

A core capacity that mindfulness can build is improved ability to “deal with difficulty”. Again, making mistakes is embodied in our ‘fight or flight’ response, which then feeds a cognitive reaction. Mindfulness helps a person be more aware of this and less subject to a reactive response.

Context Humans are not influenced by context/environment but are able to be objective in any situation, physical or social context.

Many of the behaviour change models such as the ISM model and the behaviour change wheel include an analysis of how social and environmental context influence how we behave and what decisions we make.

Mindfulness builds meta awareness, the capacity of individual to be more aware of external influences on internal states and therefore how external contexts are influencing them internally and thus contributing to decisions/behaviours.

Society Humans are able to operate as individual

All behaviour change models and theories

By improving awareness of internal

31 George Lakoff is Distinguished Professor of Cognitive Science and Linguistics at the University of California at Berkeley, where he has taught since 1972. https://georgelakoff.com32 Toolkit: Systems Thinking for Safety, Ten Principles. http://www.skybrary.aero/index.php/Toolkit:Systems_Thinking_for_Safety:_Ten_Principles

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units and social norms do not seriously affect this.

acknowledge the powerful effects of social norms and shared identities on our behaviours and decisions. Cognitive biases related to this include: the bystander effect/imitation/ social norming.

states and internal and external states it Improves ability to empathise, to connect as part of group, and most importantly to be interdependent, being aware of when we are being pulled by the group and being able to act independently.

Emotions Humans are rational, emotions prevent rationality; therefore, we create processes to negate any effects of emotions and generally do not value or acknowledge them in decision making.

Behaviour change theory acknowledges that emotions are key to decision making. Daniel Kahneman discusses the affect bias and quotes the work of neurobiologist Antonio Damasio33. Many of the biases have an emotional association. We are viewed as feeling beings that think, not thinking beings that feel.

Most mindfulness practices will include developing awareness of our emotional ‘felt’ states and being more sensitive to the connection between emotions, thoughts and behaviours.

© Rachel Lilley

33 Descartes' Error: Emotion, Reason and the Human Brain, 2006, Antonio Damasio

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The Performance Management Principles meets The New Economics

Note: this is the first attempt to apply behavioural insights to the Welsh Government Principles of Organisational Performance Management. As such, it needs to be piloted and feedback needs to be used to develop it further and make it as accessible and relevant as it can be for those using it.

This section discusses how behavioural insights might usefully inform both the understanding and the delivery of the Welsh Government Principles of Organisational Performance Management. It considers different psychological factors and cognitive biases that might influence the way we work with the Principles.

“Economic man is a fiction, not a reality. Policies that assume that rational decision making will always prevail can go astray in many contexts and may miss opportunities for low-cost, high efficacy interventions. Updating the standard assumptions about human decision making is essential to pushing forward the frontier of development policy making.The interplay of institutions and individuals is more complex than is often recognised; yet the potential for temporary interventions and changes in institutions to alter long-standing patterns is greater than has been recognised.” World Bank, 2015, (p 25)

Considering the Welsh Government Principles of Organisational Performance Management

Be clear about purpose

Potentially subject to biases of:o Confirmation biaso Bunker mentalityo The overconfidence trapo The illusion of controlo Optimism biaso Scarcity bias

The Williams Commission report notes that: “In a public service system which does not rely on competitive choice, the voice of the citizen must be harnessed as a force for improvement, either directly or through effective representation.” p37 Much of behavioural economics is underpinned with an assumption that we are not good at dealing with complexity or uncertainty and that in an attempt to avoid it we will oversimplify a problem and attempt to create ways of controlling a situation. It is easier to oversimplify things when we are distanced from the reality of the problem and get caught in a ‘bunker mentality’ which can then lead to ‘an illusion of control’ and the ‘overconfidence trap’. When this happens it is more likely that our purpose will move out of alignment with reality. In the aviation industry they have developed a toolkit which suggests we always connect with “work as done” (as opposed to work as we think it might be) and “system as is” (as opposed to system as we think it is) 34. By constantly being in touch with what is really happening, it is more likely we will be clear about our purpose and know our purpose is the right one.34 Error reporting in the aviation industry. Skybrary, http://www.skybrary.aero/index.php/Error_Reporting

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According to a European review of behaviour change applied to policy interventions: “The effectiveness of public policies often depends on how people react to it and the extent to which people's real behaviour is taken into account when designing policies.” 35

The Economist Guide to Decision Making warns that often the ‘overconfidence trap’ contributes to poor decision-making and that this is commonly invoked when we get disconnected from what is really happening. Overconfidence is often associated with our need to create certainty and control. Psychologists call this the “illusion of control” which leads us to overestimate our ability to achieve outcomes through control. The “bunker mentality” is seen as the ultimate overconfidence trap, “when reality is removed, anything is possible.”36 This is linked to our difficulty with uncertainty. When we are not connected to reality, we can believe the world to be more predictable than it is. When there is uncertainty, failure is possible. The Williams Commission report states that “silo working” and “parochialism” are two weak organisational behaviours they observed in Wales. Both will contribute to that bunker mentality.

How do we address this? Some things worth considering are: o Think it possible you may be mistaken; this is included in the de-biasing guidance

for scientific research. o Consider all the reasons you may be wrong in your assumptions. o Invoke experience - understanding the problem by walking in it or with it; this is a

very effective cure for bunker mentality.

“Economics holds that making an economically rational decision involves computing the expected value of an event and multiplying it by the probability of that event occurring. Both computations are ultimately guesses and therefore open to all manner of influences including over-optimism.”

It is easy, when travel budgets and time are limited not to connect with the on the ground experience of the service or intervention you are working with. The UK Department of Energy and Climate Change has started to use customer personas and customer journeys (commonly used in commerce) to help address this issue.

As we connect with the real experience of service users it is worth reflecting on the assumptions we are making about the service user being a ‘rational actor’. Many public services are targeted at people experiencing poverty or scarcity (this can be time, money or ill health or a combination of all three) which has a particular effect on how they make decisions and engage with services. Evidence suggests that when people are facing scarcity they overly focus on the thing they don’t have. This means their decision making capacity reduces, they become more forgetful and have less capacity for self-control. Scarcity creates a heavier cognitive load on people. Economics Professor Sendhil Mullainathan suggests that policy makers need to be aware of this when designing, delivering and assessing policy, they need to have policy which includes an understanding of flaws. Sendhil notes that people are often “in an environment where the decisions have to be better, but in an environment that by the very nature of that makes it harder to apply

35 Joana Sousa Lourenço, Emanuele Ciriolo, Sara Rafael Almeida, and Xavier Troussard; Behavioural insights applied to policy: European Report 2016. http://www.cityu.edu.hk/lamp/resource/EU%20BI%20report.pdf

36 The Economist Guide to decision making, ibid

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better decisions.”37 In a recent energy efficiency project run by Aberystwyth University, Ymlaen Ceredigion and Ceredigion County Council it became obvious that poverty plus old and complex heating systems plus difficult-to-heat houses combined to make energy efficiency in the home a complex problem. The latest Welsh Government initiative to address this issue has been the combination of a call centre and energy efficiency delivered on the back of community energy projects. The research suggests neither of these interventions acknowledge the reality of how people in fuel poverty (or time poverty) experience and live with energy in their homes.38 This may not be obvious to a policy maker or project manager and needs consideration in both project design and end user engagement. (See also World Bank Report)

Policy and project management officials are often overly busy with multiple and short deadlines and therefore they are also subject to a scarcity of time and the scarcity bias, creating limitations and narrowing their vision. It is now acknowledged that we can only make so many decisions and deal with so many problems a day. The brains capacity is not infinite it has limited bandwidth. Scarcity of time means we are more likely to use system 1 thinking and use existing mental models and automatic thinking –making us more risk averse and less creative and innovative. To address this, the concept of scarcity and bandwidth needs to be acknowledged and figured into the assessment process.

Accountability and transparency

Potentially subject to biases of:o Confirmation biaso Status quo biaso Sunk Cost Biaso Scarcity biasAnd need to have an understanding of: Behaviour change communications

“Without effective public engagement there can be no effective governance, and no consistent service improvement.” Williams Commission Report p39. The Williams Commission report states repeatedly that the way data is collected and reported is complex and lack transparency. “Performance data are too numerous, complex and technical for non-experts to understand.” p67 (6.25) They particularly criticize health data as “highly technical, published without clear explanations and concentrate unduly on acute care […….] This means that citizens find it hard to understand NHS performance and to hold LHBs and trusts to account; and that those charged with formal scrutiny do not receive the information they need to identify possible problems of quality or delivery clearly and promptly.” (6.41)

Accountability and transparency require information to be visible, simple and truly accessible. Whereas it is largely difficult to access and present in ways that even professionals struggle to understand. As we know, people cannot deal with complexity and many service users are dealing with the additional cognitive loads of dealing with scarcity (money, time, health). Information needs to be provided in ways that are easily accessible and simple.

37 Sendhil Mullainathan, talk – the irony of poverty 2008, Edge.org38 https://changingbehaviours.wordpress.com/2016/06/21/behaviour-change-and-home-energy-coaching/

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The Behavioural Insights team offers a behavioural guide to communications which suggests that in order to make information accessible and meaningful it needs to be “Easy, Attractive, Social and Timely”. Contrary to this, information is mostly presented in dense, hard to understand, hard to find documents or in ways that are less demonstrating effectiveness and more defending actions. At what point and in what form would feedback about the service be offered in a meaningful way that enabled the end users to appropriately assess its effectiveness and respond.

Accountability requires that biases, and their effect on work-streams, are considered at all levels of the work, with the end user, the project managers and the performance manager. Considering how these play out is important. “Policy makers are themselves subject to cognitive biases, they should search for and rely on sound evidence that their interventions have their intended effects and allow the public to review and scrutinize their policies and interventions, especially those that aim to shape individual choice.” (Mind, Society and Behaviour 2016)

Accountability also means aligning work with other priorities, goals and ways of working. This is complex, and, as we already know, when faced with complexity we tend to simplify. For example, the goals in the Well-being of Future Generations Act (Wales)39 are all highly aspirational and extremely broad. Their intention is to transform the ways we work. This transformation requires that many automatic and habitual behaviours which make up our working life will have to change. Unless we acknowledge and resource this task people are likely simply to engage system 1 thinking, the easier route; rather than be innovative or experimental in order to create new ways of working, they will simply post-rationalize their projects in a way that demonstrates how what they are doing already meets the goals.

Accountability often evokes emotions of fear and this will affect our decision making, and how we assess risk40. If we are fearful we are more likely to trigger status quo or sunk cost biases and less likely to want to make information transparent which then may make us open to challenge and in danger of being seen to fail. As we have seen previously, a culture of ‘no failure allowed’ will never be innovative.

Driving ChangePotentially subject to biases of:o Confirmation biaso Optimism biaso Status quo biaso Sunk Cost BiasAnd need to have an understanding of: Risk literacy (see work by Gerd Gigerenzer)

“Organisations do not use data effectively: they tend to collect it simply to comply with requirements to do so. They may also suffer from a lack of ambition and a tolerance of

39 Well-being of Future Generations (Wales) Act 2015 http://gov.wales/topics/people-and-communities/people/future-generations-act/?lang=en 40 Fear, anger and risk. Lerner, Jennifer S.; Keltner, Dacher. Journal of Personality and Social Psychology (Jul 2001): 146-159.

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mediocrity: too many were content with being ‘above the Welsh average’. Some organisations also appear to report their performance selectively, choosing the data which present them in the best possible light.” (6.37) pg. 70

Using data to drive change involves trial, risk and being comfortable with uncertainty. This is almost certainly true when projects are adapting, changing, or piloting new approaches. However the culture within the public sector is frequently that “things need to be constantly and consistently right” are valued over “mistakes are inevitable, even desirable and result in learning”. Therefore, the automatic mind will tend towards using the biases such as:

o Confirmation bias – looking for information that confirms views or hypothesis they already have

o Status quo bias – a tendency to want to carry on doing what we are already doing (also links to default biases)

o Sunk Cost bias – a tendency not to want to change because physical or financial (usually both) resource has already been sunk into an existing project.

o Hindsight bias – which often comes into play when we are trying to analyse, understand, and interpret results or trying to attribute responsibility and the predictability of events.

o Risk aversion – a tendency to misunderstand and misrepresent risk. As Gerd Gigerenzer states: “a system that makes no errors is not intelligent.”41

Considering ways to address these biases:o Be aware of our tendency to confirm our own beliefs and look for information

which challenges beliefso Be open to new information and check in as to whether a project is being

continued just because it has been going a long time or has had a lot of resource input.

o Understand risk and how to manage risk, finding ways to make and learn from errors.

The aviation industry uses a toolkit which facilitates them to work effectively with risk and uncertainty and learn from it. They create a “just culture”, which acknowledges the need for adaption and creates an atmosphere of trust in which people are encouraged, even rewarded, for providing essential safety-related information.”42

Driving change also requires an understanding of complexity – humans struggle to deal with complexity and will, as we discussed earlier, substitute the simple for the complicated, an easy question for a difficult one. This is where attribution bias, which we discussed earlier, comes in. Rather than seeing what is really happening (because it is too complicated) we will assess a piece of information about how we ‘feel’ about it (which is easier) and we will post-rationalize a complicated negative as a simple positive (because it is easier than addressing the complexity involved in the negative). This can result in the hindsight bias.

“Politicians are always expected to have clear plans, and simple, easy to understand answers in which they have unshakeable confidence […] We seem to prefer politicians who

41 Risk Savvy, How to Make Good Decisions, Gerd Gigerenzer, 201442 Error reporting in the aviation industry. Skybrary, http://www.skybrary.aero/index.php/Error_Reporting

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tell us the world is simple and predictable, even though we know it to be complex and unpredictable.” Beinhocker 2016.

Measuring the right thingsPotentially subject to biases of:o Confirmation biaso Optimism biaso Sunk Cost Biaso Scarcity biasAnd need to have an understanding of: Managing data and risk literacy

“Collecting and collating the data is a significant burden in itself, and one which focuses attention on measurement rather than improvement. There are also examples of inconsistencies and duplications: different parts of the public sector measure the same things in different ways, and in some cases there are several different measures of the same service (for example, there are at least seven ways of measuring school attainment at age 16). Such breadth and complexity significantly hinders accountability, especially to the public.”Williams Commission report

In order to measure the right thing we need to better understand data, what to gather, how to gather it and how to measure different types of impact. As discussed throughout this document, when faced with complexity people will tend to make things easier and simpler and this will apply to how we deal with data collection.

Our unconscious default may be to measure what is easy to measure rather than something that will evidence real impact. This will result from Confirmation bias and our tendency to look for information which is easy to access and which supports our existing beliefs/hypothesis.

In order to address this we can consider some of the interventions listed previously in this guide, alongside Gerd Gigerenzer’s work43 which looks at strategies for assessing and managing risk.

Be open to challengePotentially subject to biases of:o Confirmation biaso Scarcity biaso Affect biasAnd need to have an understanding of: The importance of trust and trusted messengers Behaviour change communications

“Citizens were not strongly engaged in scrutiny or in defining and designing delivery. Good information was not always being provided to support either internal or external challenge.” The Williams Commission reports: p38

43 Risk Savvy: How To Make Good Decisions, 2014, Gerd Gigerenzer, Allen Lane

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Whether a messenger is trusted or not will have a significant impact on another person’s willingness to believe or engage with them. This will lead to confirmation bias, if people believe that the public sector is not open to challenge then they will not challenge them. If it is difficult to access staff or if they think they can only find a faceless portal they will not expect successful engagement and so are unlikely to attempt it. Therefore, it will not be enough to state that “we are open to challenge”. People are time poor and need clear pathways to communicate through, evidence that they will be heard and responded to. In order to address this systems need to be designed and communicated (using behaviour change communications) which will facilitate effective engagement and this needs to be across the public sector.

Evidence suggests that sometimes public sector officials know (sometimes value) their own invisibility and that this is a historical part of public sector culture.

‘Being challenged’ and ‘challenging’ will potentially invoke an affect bias where people feel angry, fearful or defensive. Reactive and emotional states of fear, defensiveness and uncertainty are likely to inhibit effective communications. Systems where service users can effectively challenge services in a meaningful and effective way need to be developed, with an understanding of behaviour change communications to facilitate an effective co-production environment.

Contact: Rachel Lilley, Aberystwyth University ral17@aber.ac.uk

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