In real life, imagine if everyone we met was like Jordan Belfort from The Wolf of Wall Street.
Unlike for TV, it wouldn’t make for very interesting watching. Why? Because in the real world, we are all united by our differences, as well as our similarities.
In an age of personalisation, understanding how individuals react differently to the same things can have a huge impact – especially from an economic perspective.
Traditional economic theory relies on the assumption that humans are rational and make logical decisions in their own self-interest.
The fatal flaw in that? Humans can be far from rational. More importantly, we live in a world where personal success is linked to the success of others. Think teamwork and morale. Think job tasks that are outcome-focused, rather than output-focused.
Whereas, in the past, economic theory has been built assuming that we all live in a world of wolves, the emergence of behavioural economics has highlighted the logic in being illogical.
We have evolved as social creatures, with emotions and relationships often winning over data-driven thinking. And yet, few workplaces recognise this truth, which may explain our struggle to boost productivity.
To enable humans to make effective decisions and understand that their productivity is interdependent on others, employers should be creating environments that foster this.
In short, business needs to employ behavioural science.
Behavioural science has already proved its worth financially. For example, a scheme launched by the government’s Behavioural Insights Team altered the wording in letters sent for tax collection. This simple change brought forward £200m in tax revenue in a year. The success has also been rolled out globally.
I have worked with major corporations to apply a similar approach to their training and people development. Sometimes, the simplest techniques can dramatically alter how employees view themselves and their work, how they interact with their colleagues, and the results they produce.
For business success, we must focus on creating structures and systems for work that are both more human and more humanising. Economists alone are unable to predict business success because they too often leave these factors out of the picture. Until recently that is.
Only by embracing our social nature and different capacities can we begin to really tackle the productivity crisis. The most successful businesses out there are learning that some factors once thought of as irrelevant for productivity are in fact at the heart of these issues.
Cutting the hours in the working week, paid holiday leave, enabling employees to work from home – all of these things may once have seemed illogical to employers, but have more than proved their value.
Allowing space for staff to learn better might sound like a threat to the balance sheet, and therefore seem financially illogical. But it will boost growth through increased productivity and retaining talent in the long run. Sometimes it is logical to be illogical.