In Praise of Small Miracles – by David Brooks

Too many people die in auto accidents. When governments try to reduce highway deaths, they generally increase safety regulations. But, also in Kenya, stickers were placed inside buses and vans urging passengers to scream at automobile drivers they saw driving dangerously.

The heckling discouraged dangerous driving by an awesome amount. Insurance claims involving injury or death fell to half of their previous levels.

These are examples of a new kind of policy-making that is sweeping the world. The old style was based on the notion that human beings are rational actors who respond in straightforward ways to incentives. The new style, which supplements but does not replace the old style, is based on the obvious point that human beings are not always rational actors. Sometimes we’re mentally lazy, or stressed, or we’re influenced by social pressure and unconscious biases. It’s possible to take advantage of these features to enact change.

For example, people hate losing things more than they like getting things, a phenomenon known as loss aversion. In some schools, teachers were offered a bonus at the end of their year if they could improve student performance. This kind of merit pay didn’t improve test scores. But, in other schools, teachers were given a bonus at the beginning of the year, which would effectively be taken away if their students didn’t improve. This loss-framed bonus had a big effect.

People are also guided by decision-making formats. The people who administer the ACT college admissions test used to allow students to send free score reports to three colleges. Many people thus applied to three colleges. But then the ACT folks changed the form so there were four lines where you could write down prospective colleges. That tiny change meant that many people applied to four colleges instead of three. Some got into more prestigious schools they wouldn’t have otherwise. This improved the expected earnings of low-income students by about $10,000.

The World Bank has just issued an amazingly good report called “Mind, Society and Behavior” on how the insights of behavioral economics can be applied to global development and global health. The report, written by a team led by Karla Hoff and Varun Gauri, lists many policies that have already been tried and points the way to many more.

Sugar cane farmers in India receive most of their income once a year, at harvest time. In the weeks before harvest, when they are poor and stressed, they score 10 points lower on I.Q. tests than in the weeks after. If you schedule fertilizer purchase decisions and their children’s school enrollment decisions during the weeks after harvest, they will make more farsighted choices than at other times of the year. This simple policy change is based on an understanding of how poverty depletes mental resources.

In Zambia, hairdressers were asked to sell female condoms to their clients. Some were offered financial incentives to do so, but these produced no results. In other salons, top condom sellers had a gold star placed next to their names on a poster that all could see. More than twice as many condoms were sold. This simple change was based on an understanding of the human desire for status and admiration.

The policies informed by behavioral economics are delicious because they show how cheap changes can produce big effects. Policy makers in this mode focus on discrete opportunities to exploit, not vast problems to solve.

This corrects for a bias in the way governments often work. They tend to gravitate toward the grand and the abstract. For example the United Nations is now replacing the Millennium Development Goals, which expire in 2015, with the Sustainable Development Goals.

“The Millennium Development Goals are concrete, measurable and have an end-date, so they could serve as a rallying point,” says Suprotik Basu, the chief executive of the MDG Health Alliance. “One good thing about the Sustainable Development Goals is that they’re being written through a bottom-up consensus process. But sometimes the search for consensus leads you higher and higher into the clouds. The jury is out on whether we will wind up with goals concrete enough to help ministers make decisions and decide priorities.”

Behavioral economics policies are beautiful because they are small and concrete but powerful. They remind us that when policies are rooted in actual human behavior and specific day-to-day circumstances, even governments can produce small miracles.

How To Say “This Is Crap” In Different Cultures – by Erin Meyer

It was Willem’s turn, one of the Dutch participants, who recounted an uncomfortable snafu when working with Asian clients.  “How can I fix this relationship?” Willem asked his group of international peers.

Maarten, the other Dutch participant who knew Willem well, jumped in with his perspective. “You are inflexible and can be socially ill-at-ease. That makes it difficult for you to communicate with your team,” he asserted. As Willem listened, I could see his ears turning red (with embarrassment or anger? I wasn’t sure) but that didn’t seem to bother Maarten, who calmly continued to assess Willem’s weaknesses in front of the entire group. Meanwhile, the other participants — all Americans, British and Asians — awkwardly stared at their feet.

That evening, we had a group dinner at a cozy restaurant.  Entering a little after the others, I was startled to see Willem and Maarten sitting together, eating peanuts, drinking champagne, and laughing like old friends. They waved me over, and it seemed appropriate to comment, “I’m glad to see you together. I was afraid you might not be speaking to each other after the feedback session this afternoon.”

Willem, with a look of surprise, reflected, “Of course, I didn’t enjoy hearing those things about myself. It doesn’t feel good to hear what I have done poorly. But I so much appreciated that Maarten would be transparent enough to give me that feedback honestly. Feedback like that is a gift. Thanks for that, Maarten” he added with an appreciative smile.

I thought to myself, “This Dutch culture is . . . well . . . different from my own.”

Managers in different parts of the world are conditioned to give feedback in drastically different ways. The Chinese manager learns never to criticize a colleague openly or in front of others, while the Dutch manager learns always to be honest and to give the message straight. Americans are trained to wrap positive messages around negative ones, while the French are trained to criticize passionately and provide positive feedback sparingly.

One way to begin gauging how a culture handles negative feedback is by listening to the types of words people use. More direct cultures tend to use what linguists callupgraders, words preceding or following negative feedback that make it feel stronger, such as absolutely, totally, or strongly: “This is absolutely inappropriate,” or “This istotally unprofessional.”

By contrast, more indirect cultures use more downgraders, words that soften the criticism, such as kind of, sort of, a little, a bit, maybe, and slightly. Another type of downgrader is a deliberate understatement, such as “We are not quite there yet” when you really mean “This is nowhere close to complete.” The British are masters at it.  The “Anglo-Dutch Translation Guide”, which has been circulating in various versions on the Internet, illustrates the miscommunication that can result.

Anglo-Dutch Translation Guide Table

Germans are rather like the Dutch in respect of directness and interpret British understatement very similarly. Marcus Klopfer, a German client, described to me how a misunderstanding with his British boss almost cost him his job:

In Germany, we typically use strong words when complaining or criticizing in order to make sure the message registers clearly and honestly. Of course, we assume others will do the same. My British boss during a one-on-one “suggested that I think about” doing something differently. So I took his suggestion: I thought about it, and decided not to do it. Little did I know that his phrase was supposed to be interpreted as “change your behavior right away or else.” And I can tell you I was pretty surprised when my boss called me into his office to chew me out for insubordination!

I learned to ignore all of the soft words surrounding the message when listening to my British teammates. Of course, the other lesson was to consider how my British staff might interpret my messages, which I had been delivering as “purely” as possible with no softeners whatsoever. I realize now that when I give feedback in my German way, I may actually use words that make the message sound as strong as possible without thinking much about it. I’ve been surrounded by this “pure” negative feedback since I was a child.

All this can be interesting, surprising, and sometimes downright painful, when you are leading a global team: as you Skype with your employees in different cultures, your words will be magnified or minimized significantly based on your listener’s cultural context   So you have to work to understand how your own way of giving feedback is viewed in other cultures.   As Klopfer reported:

Now that I better understand these cultural tendencies, I … soften the message when working with cultures less direct than my own.  I start by sprinkling the ground with a few light positive comments and words of appreciation. Then I ease into the feedback with “a few small suggestions.” As I’m giving the feed- back, I add words like “minor” or “possibly.” Then I wrap up by stating that “This is just my opinion, for whatever it is worth,” and “You can take it or leave it.”  The elaborate dance is quite humorous from a German’s point of view … but it certainly gets [the] desired results!

What about you? Where do you think your own culture falls in this regard?   If I need to tell you your work is total crap, how would you like me to deliver the message?

Erin Meyer is a professor specializing in cross-cultural management at INSEAD, where she is the program director for two executive education programs: Managing Global Virtual Teams and Management Skills for International Business.  She is the author of The Culture Map: Breaking Through the Invisible Boundaries of Global Business (PublicAffairs, June 2014).  Follow her on Twitter: @ErinMeyerINSEAD