Stephen Dubner - HR Freakonomics at #HRPA2015 ~ Strategic Human Capital Management (HCM) Blog

Friday, 23 January 2015

Stephen Dubner - HR Freakonomics at #HRPA2015

This morning at the HRPA conference we're hearing from Stephen Dubner of Freakonomics telling some stories about using data for decision making. Stephen suggests there are some great parallels between these stories and what we have to do in HR - eg how much we can know about people etc.

We're really good at using data which confirms what we want to be true rather than what is really true. We need to ignore declared and focus on revealed preferences. Eg declared and actual hand hygiene rates after visiting the washroom are different - 30% of men don't wash (Stephen knows because he lingers in washrooms!). But if the non washers were in this room sitting with their friends and colleagues they wouldn't raise their hands to admit it.

HR tends to survey people about their preferences but there is a problem in doing this - a gap even within ourselves about what we do and what we think we're going to do. Predicting future even our own own future is really hard. Eg if price of gasoline rises 10c/gallon people say they would drive less but when price increases people don't drive less.

It's important to admit what we don't know and then find a way to get some data. Then find some way to change behaviour.

Eg when researchers ask nurses to spy on doctors hand hygiene rate falls from 70 to 20%. One hospital wanted to increase rate to 100%. Sending out a memo didn't help. Posses hiding in rooms jumping out, clapping and giving out a $10 Starbucks card when they heard doctors using the sink sounded stupid but we shouldn't underestimate the power of free (conference swag anyone?). No doctors ever turned award down and started gamifying the system eg turning on the taps when they heard the posse was on their floor. But it didn't work - needle didn't move. If you offer incentives in same cases it can deincentivise people to do this on other times. Then the bosses thought about themselves and realised their hands weren't clean. They started putting up pictures of their hands and for some reason this incentive worked! The conclusion - human behaviour change is hard.

Don't moralise, preach etc but find a way for people to do something differently without even thinking about it. Eg new design and technology has changed hand hygiene in hospitals. Rather then relying on doctors changing they've solved the problem in another way. In Britain we have banned doctors from wearing ties because these act as giant germ swabs.

We need people to be able to think and act differently. Eg Takeru Kobayashi's hot dog eating success. Key lessons from this were:

Redefine problem you are asked to solve - often the symptom not the real problem. If you asked a different question you come up with a whole different heap of solutions.
Ignore ie don't give any mental allegiance to previous approaches. Vs we do things this way because we've always done them this way. Ignore artificial limits.
Always soak our buns in warm water!

Or take Keith Chen at Yale who wanted to investigate people's way of managing money - people often treat money differently to how they say they are going to use it. So he set up an experimental monkey economy. This involved a communal chamber in which the monkeys lived which then came into a separate cage for the experiment and were given a coin which they could switch for food.

These monkeys think about food and sex and he wanted to add money to this list. So could the monkeys declare their preferences by what they spend money on? It turned out they could. But he then injected a price shock into the economy. If the cost of a monkey's food doubled over night would they buy less of it?

This just causes a bank heist and the monkey won't give the money bank. Chen tried to buy it back with lods of food which just taught the monkeys that the best ways to get food is to steal the money. Then the monkeys start to trade the money between themselves leading to the first ever case of monkey prostitution!

Some great examples here and although we did not get on to Freaky HR it does not take too much effort to start thinking about some examples of where Dubner's freakiness might apply. Performance management anyone?