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Interview with David Grosse



Behavioural Science is a rapidly expanding field and everyday new research is being developed in academia, tested and implemented by practitioners in financial organisations, development agencies, government ‘nudge’ units and more. This interview is part of a series interviewing prominent people in the field. And in today's interview the answers are provided by David Grosse.


David Grosse is the founder of Behavor, a consultancy applying Behavioural Science to the understanding and mitigation of cultural and behavioural risk in the Financial Services industry. He is also an advisor to Galaxy Sciences, a company that has pioneered the use of

Artificial Intelligence, Social Network Analysis and Behavioural Science to gain insight and drive improvement in organizational behaviour. David’s 30-year career in financial services has encompassed senior COO, risk management and audit roles in London, Hong Kong, Singapore and the Middle East, working for HSBC, Deutsche Bank, CLSA, Barclays Capital, RBS, Ernst & Young and PWC. His recent focus has been on encouraging banks, regulators and industry bodies to embrace forward-thinking methodologies to behavioural risk, and to ensure those tools and approaches are applied inside each company to the challenges of conduct, culture and decision making.



 


Who or what got you into behavioural science?

There is a short answer and a long answer. The short one being I have always been interested in behaviour and misbehaviour, through the familiar personal experience of being a child, teenager and adult. I have been running a natural field experiment for over 50 years and the results are mixed.


The extended answer is I became increasingly frustrated by the simplistic and siloed approaches taken in banks to understand the behaviour and decision making of their teams, managers and employees. Perversely the more the industry purported to be addressing the topic the worse the situation became, through the illusion-of-control and a proliferation of taxonomy, framework, pseudo-science and snake oil. I migrated across from operational risk, through conduct and into behavioural risk in the search for a deeper understanding and genuine root causes.


The Financial Crisis of 2008 and the myriad of conduct issues have shown the fragility of the system, the centrality of behaviour and the costs of ill devised action or complacent inaction. I still remain puzzled by the lack of thoughtful engagement by many industry players, and their unwillingness to be curious and experiment, and convinced that behavioural science is part of the answer.



What is the accomplishment you are proudest of as a behavioural scientist? And what do you still want to achieve?

Pride comes before a fall, and as behavioural scientists we should all be mindful of the replication crisis and the importance of context, context and context. As such I am reticent to call out accomplishments.


I have just re-read that first sentence and it comes across as a very English attempt to both self-deprecate and humblebrag, for which I apologise.


I would like to think I have been a part of a movement over the last few years to try and ensure behavioural science insights and methods are brought into the management of conduct and decision making within the banking industry. I often call those of us pushing this forward as the “coalition-of-the-willing”. It is still early days and we have only just passed base camp, but we push on.


What I still want to achieve is to be able to look back many years hence, from my battered leather armchair, tumbler of whisky in hand and pipe smoke hanging in the air and see that all banks have advanced behavioural capabilities and understanding woven into their DNA, and that in turn plays a part, not just in each firm’s decision making, results and resilience, but in the soundness of the wider financial system. If I can play a small role in helping banks get there then I will be happy.



If you weren’t a behavioural scientist, what would you be doing?

Am I a behavioural scientist? Oh, I have just remembered that I might have said so on my Linkedin profile and you are interviewing me, so perhaps I am. Looking at the luminaries in your series of articles I would perhaps characterize myself as being on a journey, not yet at the destination, seeking to use behavioural science informed insights and methods.


If someone cruelly stripped me of my ability to focus on behavioural science, and as a qualified accountant and long-term banker, I can confirm that I would not be an accountant nor banker.


When I was younger I wanted to be a war correspondent. It seemed edgy and cool and likely to make me heroic and more attractive. I still enjoy travelling to challenging locations, but my lack of bravery and limited skill with a pen might hold me back.



How do you apply behavioural science in your personal life?

As a banker I am rubbish at investing and as an accountant I struggle to balance the books. What makes you think I would be any better at applying behavioural science in my personal life?


I do have a whiteboard in my study with a daily tally of my key exercise metrics, but I have just looked and I last filled that in three weeks ago, so I may need to make that nudge more salient.


I have become much more aware of the application of the better-than-average-effect and motivated reasoning in my daily (ethical) decisions. It is fun to log all the incidents where I have managed to convince myself of the righteousness of my behaviours. I have also found it a good way to get people engaged at work; if they can learn to self-analyse how they push acceptable boundaries away from the office, then they may think more about how similar patterns can develop in their day job.


Luckily, I am actually better-than-average, so I don’t need to worry right?


I have also become more attuned to how the local environment and sub-cultures of my daily life impact my behaviour, especially in a crowd and when my sports team is losing.




With all your experience, what skills would you say are needed to be a behavioural scientist? Are there any recommendations you would make?

The important thing is not to stop questioning. Curiosity has its own reason for existing. Einstein said that, so it’s probably valid.

Be open to insights from multiple disciplines, so don’t set a tight definition of behavioural economics and psychology. You may need to be an anthropologist studying people in their natural habitat, and you may need to understand the role of the endocrine system.


You will need to be tenacious to ensure you can push through the friction in the system. Many managers have a natural reticence against trying something new, especially when they realise that suggested interventions may not work and that is not a failure, but another valuable lesson learned.


Work out how to keep things sufficiently simple that they can be explained, but not overly simplified such that they lose their validity and efficacy.



How do you think behavioural science will develop (in the next 10 years)?

Bloomberg listed the role of a Behavioural Scientist as a top job for the coming decade, so that is a positive. Albeit, when I read of the growth of the role of Chief Behavioural Officer (CBO) it fills me with equal part delight and dread. Delight that there is room at the top table for behavioural expertise, dread than it may become another home for charlatans, management consultants and their Three Letter Acronyms (TLA’s).


For Banks I am convinced that there will be continued development on extending the application from clients and customers into internal behaviour and employees. There are only 10 or so firms that currently do this, and the work is still nascent, but a tipping point will arrive as more banks engage, as regulators join the dots and as external big data sets and interest from investors throws new light into behavioural traits.


I also believe that the future of behavioural science is one that takes a wide definition and includes the insights from behavioural economics, organizational and cognitive psychology anthropology, neuroscience, evolutionary biology. In a parallel to banks needing to break down their own organizational silo’s, as with academia and applied behavioural science needing to be trans-disciplinary.


The ability to join up the skills from behavioural science into the power of data science will be ever more important. Not because it will necessarily magic up inviolate answers off the back of a funky algorithm, but because it will allow scale, deeper insights, and prompt better questions and the efficient use of limited resource.


When applying behavioural science into bank and other corporate culture it will also be important to embrace learning from complex adaptive systems theory. It scares some people, as it points towards there being no easy linear solutions, but recognizing this messy reality of life seems sensible.


There are also lessons from Safety Culture that could usefully be applied in other domains, as the threat of death and injury has focussed the minds of some industries as to how to get all staff risk aware and engaged, and not just performative participants or passive observers.


Hopefully behavioural science will also ensure that it is not too WEIRD (Western, Educated, Industrialized, Rich and Democratic), as there is much more we need to do to test our understanding in other jurisdictions and contexts. If a multi-national company has operations across the world it would be madness to transport across a process or intervention without considering cultural differences.




What advice would you give to young behavioural scientists or those looking to progress into the field?

Press on, you are entering a fascinating world and one where your personal passions and work focus are likely to align. Most of the behavioural scientists I know have high intrinsic motivation, and if the growth and importance of behavioural science continues (see the answer to the previous question) then it is likely that the extrinsic rewards will also come. That is a happy by-product.


Recognize that you will need to apply your skills into the untidy reality of corporate or public life, and that will mean you may need to be realistic on being able to apply the perfect research methodology and the speed with which projects will progress. On the flip side hold the line on having scientific under-pinning and challenging the status quo.


Wherever you end up, ensure you have a strong sponsor who is in it for the long haul and not as a time-bound programme. Don’t let your confirmation bias kid you that just because you can see the undoubted rightness of your approach that others share the same understanding or passion.


Never stop learning, never assume your understanding cannot be wrong or improved, always remember that insights and interventions are very context dependent.


Which other behavioural scientists would you love to read an interview by?

Max Bazerman and Ann Tenbrunsel for that area that intersects behavioural science and ethics, and why we all have blind spots.


In the spirit of behavioural science being a big tent it would be good to hear from those who focus on organizational accidents and human error – so James Reason and Sidney Dekker.


It is much broader than behavioural science, but sense making in complexity is important for those of us who think about corporate culture, and anyone who describes themselves as a proud curmudgeon and a professional cynic likely has many useful lessons to give – Dave Snowden fulfils that brief.


Some of the original behavioural scientists are magicians or advertising agents, and those who can trick the mind with illusions or convince me to buy a new brand of toothpaste will have some useful secrets to tell. Derren Brown and Rory Sutherland would be ideal – perhaps together.



 


Thank you so much for taking the time to answer my question David!


As I said before, this interview is part of a larger series which can also be found here on the blog. Make sure you don't miss any of those, nor any of the upcoming interviews!


Keep your eye on Money on the Mind!


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