Last week’s Time had an article on how President Obama is using the science of change to transform the country. Specifically, President Obama and his economic team are relying on findings in behavioral economics to make people break old habits and adopt behaviors that are better for them and society.

Unlike traditional economics which assumes that human rationality, self-interest, and freedom of choice end up creating an efficient market, behavioral economics does not make this assumption. While recognizing the importance of freedom of choice, behavioral economics recognizes that humans are not always rational and driven by what is best for them. It is because of this limitation that we don’t make the best decisions when it comes to saving for retirement or deciding what and how much to eat.

I believe that leaders of traditional and virtual teams who are interested in bringing about change can learn from this article. The article uses findings from the behavioral economics literature to suggest the following four methods to change people’s behaviors.

1. Give better information. People often don’t behave rationally or in their self-interest because they lack information about rational choices. According to the article, studies suggest that better information — which may take the form of public service announcements, appeals by respected figures, and serial dramas — can help us make better choices. Information in other forms too may help us change. I remember a Wired Magazine article in which the author talks about a manager at Southern California Edison who provided ambient orbs to about 100 customers so that they were better informed about electrical energy rates. The orbs glowed green when the grid was underused and energy was cheaper and it turned red when energy was expensive during peak hours. The manager noticed that orb users reduced their peak-period energy use by 40% within weeks. For leaders, this means better (frequent, detailed, and timely) communication of the initiatives that they plan to undertake. They might want to consider bringing in individuals who have experienced success with the initiatives being planned and ask them to present their experiences.
2. Make it easy. Better information may not always be sufficient for inducing change. You also have to make it easy for people to change. For instance, we are more likely to visit our dentist for our 6-month appointment if the appointment is made automatically for us. We are more likely to save for retirement if the savings are deducted automatically from our paychecks. Oftentimes, though not always, the idea here is to harness our inertia. For those leading a new initiative, making the initiative’s adoption easy often means providing proper and timely training for the adopters. If virtual teaming is being planned, then provide training on how to work in a virtual team, something that is often overlooked.
3. Show that everybody is doing it. Create social norms for preferred actions to induce change. People change when you create a sense that they may be seen as social deviants if they don’t change. Brain imaging studies shows that when we behave differently from our peers, the part of our brain that registers pain shows excessive activity. A recent NY Times Bits blog post talked about how AT&T used gently worded email messages that pointed to the illegal nature of file sharing to significantly reduce file sharing on its network. Leaders who are having trouble persuading some of their followers to change should consider asking those who have embraced change to share their success stories.
4. Push or mandate change. As a measure of last resort, consider mandating change. According to the article, sometimes we need a shove. Make change lucrative or mandatory. For a government, this includes measures such as a increasing taxes on undesirable behavior (e.g., increasing taxes on cigarettes). For a leader in charge of a new initiative, this would mean discussing with the team measures that should be mandated within the team and enforcing them. In a virtual team setting, for instance, a mandate that the team might arrive at is that everybody should respond to a message within 24 hrs or if someone is unable to attend a meeting, that team member should send a suitable replacement.

Are there other measures that we could add to the above list for a leader to consider? I believe that role modeling is very critical. My own research on CIO (Chief Information Officer) leadership as well as research on teams shows that a leader will have a much more powerful impact if s/he models what is expected of others. A leader can also induce change in others by tying the change to people’s intrinsic interests or self-concept (i.e., how they think of themselves).

Additionally, while change is in progress, a leader should provide positive reinforcement, something that many virtual team leaders don’t tend to do. I am reminded of a NY Times article ‘How Shamu Taught Me About a Happy Marriage,’ in which the author talks about how techniques used by animal trainers to make animals do seemingly impossible things can also be used to change human behavior. Essentially, trainers have been able to “teach hyenas to pirouette on command, cougars to offer their paws for nail clipping, and baboons to skateboard” by completely ignoring undesirable behavior and rewarding desirable behavior, no matter how small or imperfect it is. The author used this technique of positive reinforcement to make her husband get rid of irritating habits and make her marriage far smoother and her husband much easier to love!

The different methods or ideas that I have described above have boundaries. They are likely to have a greater impact in one set of conditions versus another. For instance, tying the change to people’s intrinsic interests or self-concept is likely to be feasible in small teams. Would it not be interesting for us to have a conversation on what these boundaries are? Also, what other methods can you think  of for bringing about change in people?