The advertising industry is constantly changing – yet managing change is hard. Our guest today believes that we can adapt to change more easily by leveraging the science of behavioral economics. Melina Palmer is the author of a new book, What Your Employees Need and Can’t Tell You, which sets out a roadmap for managers tasked with instituting organizational change by reflecting how our brains work. Claim your free chapter of Melina’s book at thebrainybusiness.com/INCLEARFOCUS.
Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS:
Melina Palmer: We can actually leverage knowledge of how the brain is making decisions to make it so change is much easier instead of trying to will our brains into doing things that they’re not wired to do.
Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on the business of advertising, produced weekly by Bigeye: a strategy-led, full-service creative agency, growing brands for clients globally. Hello, I’m your host, Adrian Tennant, Chief Strategy Officer. Thank you for joining us today. The advertising business is perpetually evolving in response to popular culture, platforms, devices, technology standards, and economic conditions. Historically, print advertising was disrupted by radio, which was in turn disrupted by network TV. Then cable and satellite channels came along further fragmenting viewing audiences. The Internet has probably been the most disruptive of all, and today’s consumer has an overabundance of choices for their news and entertainment. These media disruptions have forced companies, including ad agencies, to reexamine their standard operating procedures, staffing levels, communication strategies, and in some cases, their entire business models. But of course, advertising is not alone in this regard. Adapting to change is part of professional life in most organizations today, large and small. The reality is that for many of us, making changes to how we work, what we work on, and even who we work with is hard. Managing change across multidisciplinary teams is even harder. But it doesn’t necessarily have to be. Our guest today believes that we can adapt to change more easily by leveraging the science of behavioral economics. Making her second appearance on IN CLEAR FOCUS, Melina Palmer is the founder and CEO of The Brainy Business, which provides behavioral economics consulting to businesses of all sizes worldwide. Melina worked in corporate marketing and brand strategy for over a decade before earning her master’s in behavioral economics. Melina’s podcast, The Brainy Business: Understanding the Psychology of Why People Buy is listened to in over 170 countries and used as a resource by many universities. Melina talked to us in June, 2021 about her first book, What Your Customer Wants and Can’t Tell You. Now in her sequel, What Your Employees Need and Can’t Tell You: Managing Change With The Science of Behavioral Economics, Melina sets out a roadmap for executives and managers tasked with instituting organizational change. To discuss some of the ideas in her new book, Melina is joining us from her home office in Tumwater, Washington state. Melina, welcome back to IN CLEAR FOCUS!
Melina Palmer: Oh, thanks so much for having me.
Adrian Tennant: Well, Melina, first of all, congratulations! What Your Customer Wants And Can’t Tell You was published only last year and received rave reviews, but you’ve already published your second book. That’s quite an achievement. For people who missed our first interview, could you explain what behavioral economics is?
Melina Palmer: Absolutely. And thank you. Yes. It’s been a whirlwind having both of those books come out so close to one another. So what I like to say with behavioral economics is that it is the psychology of why people act, choose, change, and buy. And essentially if traditional economics and psychology had a baby, we would have behavioral economics. So you know, traditional economics assumes logical people making rational choices and absolutely everything that they do. And because we’re human, we don’t always do what we think we should. So behavioral economics allows us to better communicate with people in what they’ll actually do instead of those shoulds.
Adrian Tennant: Well, your new book is entitled What Your Employees Need And Can’t Tell You: Managing Change With the Science of Behavioral Economics. What prompted you to write a book focused on managing organizational change?
Melina Palmer: Well, it’s an aspect that I’ve been focused on for a long time. I teach a class on this at Texas A&M, and in addition to that, so it’s, you know, something that’s been on the mind, I’ve been training on for a while. Looking at the environments in the fall of 2021 when it was, you know, pitching and starting to work on this book, “the great resignation” was in full force, you know, really at that time and was able to just sort of look into the future and see that this wasn’t something that was going to be going away, but was something that was really important as we were looking at returning to work and hybrid workplaces and coming onto the other side of a pandemic and all these things, knowing that the role of employees and organizationally, you know, all these things are gonna be changing. And seeing that this was a book that was really gonna be needed for people to be able to understand themselves and their teams and their businesses better, and to be able to be more effective while also having more engaged employees that don’t want to leave. You know, don’t even think about that. So that was why it was pretty clear it was the right time, even though it was so soon after the first book.
Adrian Tennant: Well, it’s become a cliche to say that the only constant in business today is change. Yet it seems humans aren’t very good at responding to change. The problem is the way our brains work?
Melina Palmer: Yeah, definitely. So if you think about your decision-making and for the person who’s listening right now, if you think, how many decisions did you make yesterday? How many decisions do you make on an average day? When we think about the stuff we’re aware of, there are 25 big decisions or 500 things, or maybe even 2000, right? That we would say, which seems a bit excessive, right? If you think about yesterday, you probably couldn’t think about 2,000 decisions you made. But the average person makes 35,000 decisions every single day. So there’s so, so much that our brains are doing all the time, and in order to be able to exist, we need our subconscious to be doing the bulk of that decision-making, using rules of thumb for things that have worked well in the past. Being able to easily predict, this has happened, and so this should happen next, and to be able to carry on throughout our day. So because of that, our brains rely really heavily on the status quo and have familiarity bias and like to be able to hold on to those habits. That makes it so when we are looking to make changes, it can be very difficult, especially because we try to rely on willpower, which is needing that conscious brain, but the subconscious is doing most of the processing. So in understanding the rules the brain uses to make decisions and how that processing goes about, we can actually leverage the knowledge of how the brain is making decisions to make it so change is much easier instead of trying to will our brains into doing things that they’re not wired to do.
Adrian Tennant: Your new book is divided into three sections. In the first, in addition to explaining how the brain works, you write about what makes a great manager and how anyone can become one. Now, in your opinion, and I’m gonna quote, “Every conversation and interaction at work is a change initiative because we’re in an environment with lots of change. We’re always in the wake of change that has already happened, some that are actively occurring, and others that we need to prepare for” end quote. Melina, can you unpack this for us?
Melina Palmer: Sure. Well, this is definitely built again on those 35,000 decisions that I was talking about. So one of the big problems that happens in business when we think about change and where we need to be preparing employees and getting ready for changes is that it only would occur when it’s something really big. You know, you have a CEO succession, you have a merger, you have a big rebrand, or you’re moving offices. But it’s not just that because of how the brain makes decisions, we really need to look at those micro moments, those 35,000 daily decisions of the little stuff really adds up in a way that’s either gonna work for us or against us. And our conscious brain can get overwhelmed really, really quickly to where we then really rely on that status quo even more and become resistant to change even when it’s objectively better for us, we can really, you know, dig in our heels and say, “No, I hate it,” for whatever it happens to be. So in this way, if we’re thinking about those little tiny moments, we can see That either we’ve got too much going on and because of a previous change, we’re still kind of living in the wake of that. or again, in the middle of changes that we’re asking for because little tiny habits being upended have a similar impact. It’s not just that big stuff. And if we do have some free space, making sure that we’re aware of what’s coming down the line in the next minute, or hour, or week, or a year, so that we can be properly prepping and getting it so those brains are ready for change instead of just having way too much going on at once that is probably not as important and it makes it so we’re unable to do the big stuff because we try to throw in too many little changes that weren’t as important.
Adrian Tennant: You do use some incredibly evocative metaphors. why do you think we need to become elephant whisperers?
Melina Palmer: Oh, thank you. I do love a metaphor and, it, can be problematic whenever I’m writing for academic journal type of stuff, where you can’t write that way, but it’s my favorite. So in this way, there is a really great way that’s been proposed to think about the brain from a psychologist out of nyu, so I don’t get to claim this full idea. It’s from Jonathan Height. And he talks about thinking about your brain like a person riding an elephant. So the rider is that logical, conscious processing, knows where you wanna go, has a plan, is the best way to get there and is ready to go. The elephant though, May not want to go in that direction. It might wanna sit down or go towards a pool of water or something you know, that it happens to see. And so as the rider, you can’t push or pull or logic the elephant into doing what you want it to do because they don’t speak the same language. And it’s the same with our conscious and subconscious brains. They don’t communicate that well. When we sit down, we’re thinking about change initiatives. And again, this is anytime when we’re saying, “Oh, people should love this. People should be able to see the value in this.” All those shoulds, you know, that’s a four letter word around here, so we’ll steer clear of those. So when you’re thinking about planning for change, You’d like to think that your rider’s communicating to their rider, and it’s gonna be a, you know, easy conversation, simple to move forward with, and people will see the logic in whatever this thing is. But in reality, you have to understand what’s gonna be motivating the elephant and then becoming that elephant whisperer to help nudge it along the path and to see, you know, the best way so that it’s gonna be taking the rider where it needs to go.
Adrian Tennant: Mmm. Well, it’s certainly a powerful idea that a manager’s main job is to lead their team through change, but not all initiatives need to be dramatic. Melina, I feel some more metaphors coming on, so what do snowflakes, snowballs, and icebergs have to do with managing change?
Melina Palmer: Yeah. So in this way, if we look at the snowballs of change, as I talk about them in the book, they are made up of those micro-moments. So we can have snowflakes moving us in the right direction. And it takes a little bit of time to be like collecting our snowflakes as we’re starting to work toward a culture of change, which doesn’t mean that we’re throwing changes at people all the time, as you’ve already learned from what we’ve been talking about here – that’s not the right approach – but instead, we have to have that awareness of change. And if we’re constantly stacking all these little moments toward this positive outlook, we can be creating those snowballs. It’s important to know where you’re coming from, because if you’re just starting in this process, you know, those snowflakes have been accumulating whether you were thinking about them or not. And if you have a giant icy tundra of nightmares, that you have to be undoing to get through to the other side, just having that awareness, it doesn’t mean that if you’ve had, you know, 10 years of stuff stacking into this tundra that that’s gonna be a problem. well, it will be a problem, but it won’t take 10 years the same amount of time to undo it, but you will have to be really thoughtful about those snowflakes and know that it’s not something that you just say, Oh, we think about change differently now, and everyone is just on board. Because again, that would be too logical.
Adrian Tennant: What are the icebergs in the scenario?
Melina Palmer: The icebergs are that tundra of change, right? The too much bad stuff that’s all packed in, and is where we’ve been setting up a culture that is maybe not one of having room for thoughtfulness and not being packed in with too many deadlines and all that sort of stress, and not having an awareness about those micro- . Those are icebergs that we have to kind of chip away at as we’re working on our new snowballs of change.
Adrian Tennant: Let’s take a short break. We’ll be right back after these messages.
Adrian Tennant: Each month, in partnership with our friends at Kogan Page, The Bigeye Book Club features interviews with authors who are experts in marketing, consumer research, and customer experience. Our featured book for November is Inclusive Marketing: Why Representation Matters to Your Customers and Your Brand by Jerry Daykin. IN CLEAR FOCUS listeners can save 20 percent on a print or electronic version of the book with exclusive promo code BIGEYE20. This code is valid for all products and pre-orders and applies to Kogan Page’s free e-book offer. To order your copy of Inclusive Marketing, go to KoganPage.com – that’s K O G A N, P A G E dot com.
Seth Segura: I’m Seth Segura, VP and Creative Director at Bigeye. Every week, IN CLEAR FOCUS addresses topics that impact our work as creative professionals. At Bigeye, we always put audiences first. For every engagement, we commit to really understanding our clients’ prospects and customers. Through our own primary research, we capture valuable data about people’s attitudes, behaviors, and motivations. These insights inform our strategy and guide our creative briefs. Clients see them brought to life in inspiring, imaginative brand-building and persuasive activation campaigns. If you’d like to put Bigeye’s audience-focused creative communications to work for your brand, please contact us. Email email@example.com. Bigeye. Reaching the Right People, in the Right Place, at the Right Time.
Adrian Tennant: Welcome back. I’m talking with Melina Palmer, CEO of the Brainy Business, and the author of What Your Employees Need And Can’t Tell You: Managing Change With The Science Of Behavioral Economics. Well, in the second part of What Your Employees Need And Can’t Tell You, you explain that biases are inevitable, while reassuring us that we can still understand and work with these tendencies to be more effective. Now you worked in corporate marketing and brand strategy for a decade. Melina, which three principles drawn from behavioral economics would you say are the most important for advertising or marketing communications professionals seeking to implement change within their organizations?
Melina Palmer: Yeah. So for me, I always lead with framing. Framing is that how we say something matters more than what we are saying. And I think that is a really great place to start. So if you were to think about going to buy some ground beef at the grocery store, and there are two stacks that are almost identical. The only difference is one is labeled as “90% fat-free” and the other is “10% fat.” Which one do you want to buy? Most everyone from around the world says “90% fat-free” is the one that they want. Logically, we know they’re the same, but they hit our brains in a different way. So understanding those frames and how you communicate information is really, top. And what’s great about that? It’s really easy to be making adjustments and doing little tests without having to invest a lot of money. So that’s a really great one. When we’re talking about communicating any sort of change also, then priming, I think, really has to come into play as well. So this is that things that happen around the communication, what happens just before the ask is really, really important in the messaging and how people feel about whatever the change is that’s being presented to them in those communications. In an advertising space, you know, we would look at all of our senses are a part of this, and there’s an example of, say at a gas station where they were looking to sell more coffee. And we could have had all the ads in the world, and they might have had a little bit of impact, but they had the scent of roasting brewing coffee at the gas pumps and increased their sales by 300 percent! Just by having the scent around, because that is gonna trigger our brain in a really impactful way. So when we think about change communications, I look at the scent of popcorn. So popcorn can be really amazing when we’re going to the movies, and it has this whole experience tied in with it. But we’ve all been in the office when someone burnt a bag of popcorn, and it’s all anyone can talk about for the rest of the day, it’s just really terrible. So seeing if our communication has any burnt popcorn that’s there, that’s making it so it’s gonna be derailing the idea of any change along the way. And the last I would say for all communication is overwhelm. You know, having this awareness of cognitive load and not trying to be asking for too many things, in which case people will do nothing. So being more thoughtful about, in this one communication, if it can only do one thing, what is its job? What’s the most important thing? And being really, really focused on aligning everything toward that and not trying to ask things to do too much to where they do nothing at all.
Adrian Tennant: Incorporating behavioral economics into business practice itself requires change. In your first book, you introduced a concept called behavioral baking. Can you explain how it applies to managing organizational change?
Melina Palmer: Sure. So behavioral baking is just the idea of when you think about applying this, it’s not a one-off, you know, you try something and it works perfectly. Context really matters. We need to have an awareness of what we’re going to be doing. And just like if you decided you were gonna open up a bakery, if you were to start trying to learn how to bake to be able to do that, and you baked a cake, and it was dense or soupy, you wouldn’t say, “Oh, you know, I tried baking once, and it’s not real. Like my cake was bad. Baking’s not a real thing.” That’s a ridiculous thing to say. But we do that in business all the time. You know, “We tried Instagram once and we didn’t go viral. That’s not real.” And that’s just not how that works. So in the way of also trying to incorporate this level of thoughtfulness, of thinking about change in a different way, of understanding the brain differently, and finding the right habits to be working on adjusting, and looking for those snowflakes. There’s a lot of opportunity there, and it’s not something that is going to happen overnight with one bout of willpower. Again, we have to be really thoughtful about that process, and it will take some time, some testing, some tweaking, but it’s worth it in the end because it can all be much more beneficial, on the other side. So an example of why this is worth it, now that maybe people are listening and going, “Ugh, that sounds like a lot of work!” is if you consider the email communication that you’re sending out. So in general, you probably don’t send an email if you think that people won’t understand what you’re saying, right? By the time you send the email, you assume you’ve done enough that the person on the other side is gonna get it and you’ll be able to move on to the next step. So what research has actually found is that about 50% of our emails are misunderstood, and people don’t know what we’re talking about. Half the emails you send, people don’t know what you’re talking about! And that creates a lot of work on the other side of people saying, you know, let’s just use the example of “Hey, we should get together to talk about this.” When? Do we need to talk soon? Is this going to be virtual or in person? How long do we need to be meeting? Your office or mine? All these conversations that need to happen, that turn into confusion for the team, they’re having a lot of conversations about what comes next. They’re following up with emails. They’re looking at calendars, proactively sending you a Slack chat, coming and knocking on the door and saying, “Oh, do you have five minutes?” Which turns into 20. This all really adds up and over 60% of the work people are doing at any given time has been deemed to be unimportant. So we have stress from all these deadlines and busy work, a lot of which is not really important. And if you would’ve been a little bit more thoughtful with the communication on the front end, it can free up time to be more effective and get the right things done. So just imagine if – being conservative here – 25% of your emails, Slack chat, stop-bys, quick calls, text messages for you and your team, all magically disappeared immediately. That seems worth it for a little bit of thoughtfulness up front.
Adrian Tennant: Another idea in your book is that managers can apply what you are describing as micro shift moments to overcome time discounting, and kick off their journeys toward change. What is time discounting?
Melina Palmer: Time discounting is one of my very, very favorite concepts, I like to call it the ‘I’ll Start Monday’ Effect. So in this way, we’ve all had that occasion on a Saturday night where we have an extra piece of cake or glass of wine and you say, “Okay, this is the last one, and I’m gonna be eating better, and start training for a 5K or a marathon or whatever on Monday. And maybe you spend all day Sunday prepping and planning and throwing out other food, and you’re so excited, and you set your alarm, and you go to bed. Then when the alarm goes off, feel like a completely different person on the other side and go, “Oh, well obviously I didn’t sleep very well, and you know, when I’m, you know, on this path to the new me, it’s important that I’m well rested, so I’m gonna hit snooze. I get one more day of rest, and then tomorrow I’m gonna go for that run.” And tomorrow never ever comes because we keep kicking that can down the road. So in the way of where we feel like a completely different person, it’s actually been shown that when we think about ourselves in the future, our brains light up like we’re thinking of a completely different person. So committing future Melina to get a lot of projects done tomorrow to get up at 5:00 AM and go run, to not eat french fries or whatever it is, is super easy. It’s really easy to do that. When it’s me, and I have to do the thing, I like the idea of pushing that off again, even five minutes. “I’m gonna finish this one thing, and then I’ll do that thing on my to-do list,” right? So if we allow ourselves to keep pushing things to future you, whether again, that’s Monday or five minutes from now, those things really never get done, and we can be wasting a lot of time on other things. If we instead break down and have less priorities, so say, imagine you only had one thing on your to-do list. There’s only one really important thing that you have to get done today. That’s it. Just one. It’s a lot harder to not do the one thing. You can’t justify it as well as if you had 15 things on your list and none of them got done, because you made a little bit of progress on each one or whatever that is. So, being able to have less stuff on your to-do list to make it more of a priority and not allow yourself to put those important things off for future you is how you can overcome time discounting. And like you said, in the book, because it is a long game, I made sure to sprinkle in some of those micro-shift moments. Little things you can do right away that will have an immediate impact. So you get some of those little wins to start that snowball of change moving.
Adrian Tennant: Melina, what are nudgeable moments and how can managers find them?
Melina Palmer:In the world of behavioral economics, we work in nudges, which is, something where someone still has free choice. They can do something different, But we think about the way we present information and how it might make it so someone is more likely to go down one path versus another. And so if you think about a project you may say, Like in this, whole project, say it’s the merger situation, and one item on your to-do list is tell the team. Tell the team, is full of lots and lots and lots of little micro-moments that matter, and could be that burnt popcorn if we’re not careful and just derail everything. So if we think about then even it’s the email to set up the meeting for people to come learn that there’s going to be a merger, right? The subject line matters. What time of day are we sending it? What other communication is happening? Is it marked with the exclamation point is important when nothing else we’ve ever sent out is, or are we sending out an email telling people they have to sign an NDA to know what’s gonna happen in three days? All these little things are those nudgeable moments, which are opportunities to look for the behavioral interventions that should be going into place to help make it so that change is going to be easier. And not everything is telling the team about a merger, right? But we still want to be looking for nudgeable moments with all the communication that we’re sending out. So we’re getting those snowflakes going in the right direction. So when we do need to communicate about the big stuff, it’s a lot easier for everyone.
Adrian Tennant: In the final pages of your book, you write about the importance of fun and suggest ways to incorporate it to boost effectiveness and engagement within an organization. So do you have any favorite examples that work particularly well with marketing and communications teams? Asking for a friend.
Melina Palmer: Yeah, so when Troy Campbell was on the podcast, he talked about some really cool stuff, which I mentioned in the book. And so looking at things like, a one-word story to be able to start a meeting if you want people to be collaborating and working well together. So that’s where, you know, you start with the prompt of, “In a world…” and then everybody says one word to help build the story. And these seem like silly little things, but they really do prime us for the experience that we’re looking to have moving forward. So it’s a simple one, but it’s one that makes a difference. One thing that my team did when we’re hiring people for our marketing department, and this was actually a recommendation from one of my graphic designers, was that we would have everyone that came in for an interview, we would play a game of Jenga with them. So in the interview, we played Jenga. And people kind of let their guard down when you’re playing a game, and you can see if someone is really not gonna be a fit for your team, you know, in the heat of the Jenga moment, if they throw something or scream at you or whatever, and so, and it shows that we’re a fun, team that, that likes to get along. So, you know, even simple things like that, that are a little bit different can be really helpful when you think about employees all the way back to when you’re hiring.
Adrian Tennant: I understand that you’ll be taking the stage at South by Southwest in Austin, Texas next year. Tell us more.
Melina Palmer: Oh, thank you. I’m so excited. That was just announced two weeks ago or less, I think, actually. Yeah, like one week. Oh my goodness. But, South by Southwest, for anyone who doesn’t know, is just an amazing, huge conference that has a film festival, comedy festival, music festival, technology, innovation, and business. And they. I would like to say invite the best of the best to be there, that now sounds a bit braggadocious, but I’m very honored to have been invited to be a speaker, and my topic is using brain science to be a better manager. It’s based on content from the book, so it’s gonna be really, really exciting to be there in Austin in March of 2023, and hopefully, I’ll see some listeners there.
Adrian Tennant: Melina, if IN CLEAR FOCUS listeners would like to learn more about you, The Brainy business, your podcast, your online community, or your new book, where can They find you?
Melina Palmer: Absolutely. Well, thank you. And the best place is the website, TheBrainyBusiness.com where you can go find the podcast, the books, consulting, speaking, the community, all of that is there. For your listeners, for everyone who is thinking, “Hey, this sounds interesting. But I’m on the fence. I’m not sure if this is fully for me,” I have it available for you that you can get the first chapter really, of either book, and any future books, for free. If you go to TheBrainyBusiness.com/INCLEARFOCUS all as one word, then you can go and get the first chapter of any of my books for free, to be able to give them a read, make sure it’s for you. Do that sort of try before you buy piece, and hopefully, you enjoy it as much as I hope and believe that you will.
Adrian Tennant: Melina, thank you very much for being our guest again on IN CLEAR FOCUS.
Melina Palmer: Of course. Thanks so much for having me.
Adrian Tennant: Thanks to my guest this week, Melina Palmer, Behavioral Economics Consultant and CEO of The Brainy Business. You’ll find a transcript with links to the resources we discussed today, including Melina’s new book, What Your Employees Need and Can’t Tell You, Managing Change With the Science of Behavioral Economics on the IN CLEAR FOCUS page at Bigeyeagency.com. Just select ‘podcast’ from the menu. And if you enjoyed this episode, please consider following us wherever you listen to podcasts. Thank you for listening to IN CLEAR FOCUS, produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week, goodbye.