Burgers, beers and behavioural economics: how ‘nudges’ can help our industry

The Network held its southern Burgers, Beers and Bright Ideas event in Hobart earlier this month, and attendees were intrigued by speaker Professor Swee-Hoon Chuah, who introduced the audience to behavioural insights and nudges, and spoke about how industry could apply these behavioural insights to bring about behaviour change in the context of diversity and inclusion.

Prof. Chuah was born and grew up in Taiping, a small town in north-west Malaysia, renowned for being the wettest town in the country.

Swee-Hoon as a young child in Malaysia

“I was a nerdy child. I spent most of my time indoors (the rain didn’t help). I loved to read and watch cartoons on TV – Enid Blyton and Scooby-Doo were great favourites,” Prof Chuah said.

She was brought up in a household which clung to traditional Chinese values and customs, even though her parents—both first-generation Malaysians—were both educated in British schools.

“My grandparents immigrated from China in the early 1900s as young children with their parents. At that time, Malaya was under British rule and the Chinese were brought in to work the tin mines. My great-grandparents started a sundry goods shop to cater to the miners,” Prof Chuah said.

“Hard work, discipline and perseverance were instilled in us from a very young age. My mother was never harsh, but academic achievement was of utmost importance.”

Prof Chuah moved to Tasmania in 2019 and was immediately drawn to its stunning countryside, the cool-climate wines, and the opportunity to take up a professorship at the University of Tasmania.

A naturally curious mind, the Director of the Tasmanian Behavioural Lab, has always been fascinated by why people do what they do.

“Many times, I have found myself asking, why on earth did he/she/they do that? What reason could they have? What were they thinking?”

Prof. Chuah said she was pulled to behavioural economics because it looks beyond what is rational.

Prof Chuah is Director of the newly opened Tasmanian Behavioural Lab

“Behavioural economics studies how people actually behave – in contrast to how they are assumed to behave under traditional economics, which is in a completely rational way, and it wants to understand the underlying factors which drive peoples’ behaviours” she said.

“It recognises that we are not always completely rational. It takes insights from psychology, neuroscience, as well as other social sciences, to provide more accurate theories of how people actually behave.”

“Imagine a few different torches all shining their light at the same object, but from different directions and angles. That object being human behaviour.”

When asked to provide a simple example of a business or organisation that has used behavioural economics to drive change and positive diversity outcomes, the Professor refers to ‘nudges’ which are small changes made to the decision environment to gently steer people towards better decisions.

She said businesses have started implementing ‘inclusion nudges’ to encourage diversity and inclusion.

“McKinsey & Co. for instance, have been using nudges featuring memorable stories or visuals designed to activate inclusive behaviours and make them stick,” Prof Chuah said.

“They share with their employees’ vivid stories of women in STEM, whose contributions had been overlooked to memorably bring home the cost of non-inclusivity. In a survey, about 80 per cent of their employees responded that these nudges have directly helped them behave more inclusively.”

Inclusion and diversity is a strong focus of the TFFPN. At last count, the Tasmanian forest industry employed only 16 per cent women, which Prof Chuah said could be partly attributed to the psychological barriers faced by women when considering a career in the forest industry.

She explained that the two main (but related) barriers seem to be the representativeness heuristic and the status quo bias.

“In behavioural insights, there is a heuristic called the representativeness heuristic”, Prof Chuah explained.

“People make judgements based on prototypes of something or someone they already carry in their heads.

“Based on anecdotal evidence, women do not see themselves as representative of the typical worker in the forest industry (similar to men in nursing) and as such, many will discount the possibility of entering this sector upfront,” she said.

In an effort to illustrate the impact of the representative heuristic, Prof Chuah shared with me her love of emo music, which she said often surprises people.

My Chemical Romance concert in Melbourne

“I live and breathe My Chemical Romance and recently saw them live in Melbourne. My life is now complete!” she joked.

“You see the prototype of an emo person is black hair, goth clothes, black eyeliners, red lipstick … so I don’t fit into that prototype, so people are less likely to perceive me as emo.

She said this heuristic gives rise to stereotypes and can have negative consequences.

“Jury members, for example, may judge a person based on their appearance, and perception of whether or not they ‘look like’ a criminal.”

“This is why people tend to stick to the status quo – tried and tested – and leave things as unchanged as possible, and the status quo in the sector in terms of gender is male.”

Prof Chuah said these barriers will take time to ‘undo’, as they involve culture shifts. She says that in the short term, industry should try countering the representativeness issue by featuring women in forest industry marketing collateral, campaigns and outreach events.

Prof Chuah with Minister Felix Ellis (left), Simon Cook from Forico and Mike Ross from Indicium Dynamics (right) at this month’s Burgers, Beers and Bright Ideas.

“If women are seen persistently fronting the industry, this can help dislodge the stereotype of the typical employee. In terms of shifting the status quo, try getting women as ‘messengers’ to actively promote the industry to other women,” she said.

“People are social beings who want to do the same as others, especially if others are like them; this is called the ‘peer effect’.

“Another idea is peer-placements, where women can go along with one or more of their peers into the industry, so that the status quo feels less daunting. There are only some ideas based on behavioural insights that can be used to encourage more women into the sector.”

This month marked International Women’s Day – this year’s theme being #embraceequity.

Prof Chuah believes macro-phenomena have micro-foundations stating that many of the wicked challenges facing the world today, including inequity, have their roots in human behaviour.

“Behavioural economics provides a tool to understand the psychology which underlies human behaviour. Once we understand why people do what they do, we can design interventions to encourage them to do better or to do different.”

“A better understanding of the psychological barriers that prevent people from embracing equity will enable the development of behavioural solutions to address these barriers.”

Learn more about the Tasmanian Behavioural Lab or contact Prof Swee-Hoon Chuah here.