Rotman Management Spring 2019

AT ITS CORE, EVERY ORGANIZATION is in the same business: behaviour change. Whether it’s a bank encouraging consumers to switch to their product, a government agency trying to get citizens to pay taxes on time or a health agency interested in improving medication compliance, behaviour-change challenges abound. As a result, leadership itself is also about change. In addition to facing external behaviour-change challenges, today’s leaders are also tasked with ensuring that change is embraced internally. For example, if human capital is to be optimized, biases must be tackled proactively. The problem is, most people resist change. What is a leader to do? As indicated in this issue, wherever human behaviour is involved, there are opportunities for behavioural insights to influence outcomes. In this issue we look at some of the key areas…

WHILE THEY GO ABOUT THINGS in very different ways, at their core, every organization is actually in the same business: behaviour change. Whether it is a for-profit firm encouraging consumers to switch to its product; a government agency trying to get citizens to pay taxes on time; or a health agency interested in improving the consumption of medication, behaviour-change challenges abound. Many organizations struggle to make behaviour change happen due to a fundamental empathy gap. ‘Econs’ — as depicted in Economics textbooks — are hypothetical individuals who have well-defined preferences, are able to accurately predict the future consequences of their actions, have immense computational abilities and are unfazed by emotion. Humans, on the other hand, are cognitively lazy, impulsive, emotional and computationally constrained. The empathy gap occurs when organizations design products…

How do you define a 360˚ Corporation? Nine years ago, I created a course at the Rotman School called “Corporation 360°”, because I wanted to take a hard look at the stakeholders that surround companies from every direction — all 360 degrees. Since then, my students and I have been thinking a lot about the role of the corporation in society, and what companies can do to deal with the trade-offs created by stakeholder needs that conflict with their bottom line. The fact is, meeting stakeholder demands requires actions that might compromise profits. Things like improving worker conditions, investing in environmental advances, creating talent pipelines for marginalized communities and putting an end to polluting activities are costly endeavours, in terms of time and money and in terms of organizational disruption. Despite these challenges,…

by Charlan Jeanne Nemeth THE POWER AND PULL OF THE MAJORITY is all around us, even if we are unaware of its potential influence. We may believe that we generally ‘think for ourselves’ and are persuaded only by strong arguments; but the fact is, when faced with the opinions of others, we often agree without a good argument — or any argument at all. We can even lose sight of what we believe in. Books like The Wisdom of Crowds have reinforced the assumption that ‘the truth lies in numbers’. The book properly points out the value of judgments by ‘the many’ and their superiority over the judgments of experts. What may be lost on the reader, however, is that the majority opinion is superior only in certain circumstances. Accuracy is more…

Dolly Chugh Associate Professor, Management and Organizations, Stern School of Business, New York University; author, The Person You Mean to Be: How Good People Fight Bias (HarperBusiness, 2018) ONE CONCEPT THAT I DISCUSS in my work is ‘ordinary privilege’. Think about an aspect of your identity that you rarely have to think about. For example, as a straight woman, I can go for months without ever thinking about that, because I am not discriminated against or put in danger due to homophobia and bigotry. I chat freely about my husband at work, my medical benefits are never in question, and being legally married was never something I had to fight for. That part of your identity is what I call ordinary privilege, and we can extrapolate this to different contexts. It could be…

WHILE WE SELDOM THINK ABOUT IT, our life outcomes are powerfully determined by seemingly trivial, repeated acts. Our health, for example, depends on thousands of daily choices — to eat well and exercise regularly, to avoid smoking, and to take medications as prescribed. And yet, 40 per cent of premature deaths each year result from suboptimal behaviour in this domain: Tobacco is responsible for 435,000 of those deaths, while poor diet and physical inactivity account for 400,000. Cardiovascular disease — the leading cause of mortality — is largely treatable with anti-hypertensive medicines; but just one year after receiving a prescription, only about half of patients are still taking their medication as directed. Our bad habits run the gamit from health to personal finances. One in three American families has no savings…