Behavioural Science is a rapidly expanding field and everyday new research is being developed in academia, tested and implemented by practitioners in financial organisation, 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 Kelly Peters. Kelly is the CEO and co-founder of BEworks, the world’s leading behavioural economics firm. She believes that when applied properly, scientific thinking has the power to transform society. Throughout her career, Kelly has overseen the launch of hundreds of field experiments and uncovered pioneering research on the factors influencing decision-making, helping close the gap between academic research and real-world application. She also teaches Applied Behavioural Science at the University of Toronto’s Rotman School of Management and is a regular lecturer at Cornell, Harvard and other notable educational institutions. Her work has been featured in The New York Times, Fortune, and Forbes Magazine. Moreover, she is announcing a BEWorks event at the end of the interview, so make sure to read all the way through! Take it away Kelly!
Who or what got you into Behavioural Science?
It’s hard to pinpoint a single person, book, or event, but it was Dan Ariely who convinced me to quit a lucrative career in banking to do a start up with him in a then-nascent field called Behavioral Economics. At the time in 2008 I was spearheading the use of BE at Royal Bank of Canada which was already committed to innovation and improving people’s financial decision making. Over the previous decade, I had been applying insights from behavioral finance and risk theory to my work on quantitative credit risk models amongst other projects, and it was exciting to meet in person someone who’s research had such an impact on my thinking. With the support of some very forward-thinking executives, I had a number of BE projects on the go. I also had the good fortune of having Dilip Soman and Nina Mazar conveniently based up the road at the Rotman School of Management at the University of Toronto, which was already incorporating BE into the MBA program. They were helpful in shaping my understanding of the role of consumer biases in the context of credit decisions.
A lot of my time in those early years was spent leading workshops on what BE was and how it could provide new answers to old challenges. One of the questions that emerged was why customers, who were already users of online banking, went into the branch to do the onerous task of paying their bills. It was a digital capability the bank had spent a great deal of time and money designing. It didn’t make sense that people who were already “digitally savvy” seemingly preferring to stand in line. I needed extra horsepower to figure it out and reached out to Piyush Tantia and the newly emerging team ideas42, where he is the co-Executive Director, to help. One of the surprising things we found was that customers needed the reassuring sound of the “thud” of the teller’s stamp pounding onto their bills and the relief that came from knowing matters were now in the bank’s hands.
There I was, working on interesting projects, and not so sure about taking on the risk of starting from ground zero. But the idea of launching a consulting firm that addressed the commercial market appealed to me. BIT had been successful at the ground-breaking task of encouraging politicians to incorporate behavioral insights as well as RCTs into policy design and optimization; ideas42 was growing quickly as an important non-profit. It didn’t appear as if traditional consulting companies would have the philosophical alignment to pursue BE as a core offering. It took ten months to weigh the pros and cons before I found myself as the CEO of BEworks, which in the beginning meant sitting at an empty desk in an empty room that I recall fondly as “the cupboard under the stairs.” In actuality, it was a small office that Roger Martin, the former Dean of the Rotman School of Management at the University of Toronto, had graciously loaned us to launch BEworks. Fortunately, I was surrounded by amazing people, Dan Ariely and Nina Mazar as co-founders, and two fintech entrepreneurs who had already lived the start up journey. Other members of the founding team, David Pizarro, Supriya Syal, Dhushan Thevarajah, Colin West, and Wardah Malik made the beginning of our firm an incredible place to be and build our vision of transforming both society and the economy with scientific thinking. We started with lots of laughter and it's only grown louder since!
What is the accomplishment you are proudest of as a Behavioural scientist?
BEworks started with one project, tackling the issue of helping people pay their credit card bills on time (you can read about that study in the Journal of Consumer Psychology and summarized in a Harvard Business Review article by Nina and also in an article by me in Forbes Magazine). Now BEworks is a 50-person (and growing!) team, with over 30 full-time PhDs on staff in offices in a few countries, working on projects around the world. I’m proud of the incredible caliber of talent on my team. We have a few senior business executives who bring decades of industry knowledge and have fallen in love with science and now want to see their industries transformed by this way of thinking. They drive our growth initiatives and client management. We have many Burners (attendees of Burning Man) running our operations areas because of their exceptional organizational prowess, but also their belief in the importance of community, culture, and purpose. And the largest part of our team is scientists who all have attained advanced degrees in the social sciences, in particular across the disciplines of psychology, but also evolutionary biology, neuroscience, and marketing. Ultimately, the thing that unites the entire team is wanting the opportunity to focus on human-scale problems that affect people in different areas of society, in a more tangible and actionable way that has a higher potential for impact.
We have spent a great deal of time designing and optimizing the BEworks Method so that it emphasizes the pedagogy of scientific thinking as well as the latest in behavioral insights. I am proud of remaining dogmatic about the role of scientific thinking in the process of applying behavioral insights. We know there’s a lot of temptation to simply apply insights without testing them rather than exploring the hard questions of “will this work here, why, what are the boundary conditions, what else should we explore.” This has taken a great deal of perseverance in the face of clients who are used to easy (but not necessarily correct) answers and who don’t have an appreciation for the fact that the power of behavioral science is in doing science.
If you weren’t a behavioural scientist, what would you be doing?
I would probably go back to my roots in philosophy and technology. I am really jazzed by blockchain and the principles of decentralization. Dream projects would include building new products, known as decentralized apps (known as “dapps”), on the blockchain platform based on models for social cooperation. I am hoping to incorporate this type of work into my portfolio at BEworks.
How do you apply behavioural science in your personal life?
After meeting Dan for the first time at a book signing for Predictably Irrational, we talked over a beer, and like so many of us that have stories about him, it was a thrilling moment. Of everything I have read, Dan’s work is what helped me to see that almost every question we have can be reasonably answered by a scientific lens, including love and ethics.
The adage “see what others miss, act where others don’t” is a highly motivating mantra for me, so when I see things that I am curious about, and believe that they can be better, I take an experimental approach. There was an incident at my daughter’s summer camp, where I observed that there was cheating happening during one of the games. Older boys were abusing the rules and were unfairly collecting valuable prizes. The camp leaders were aware of the issue, but they didn’t know what to do about it. Another parent (Sergio Meza, a professor of quantitative marketing) and I were able to quantify the problem and develop a simple nudge based on the research on honesty. Much to our delight, it helped reduce cheating significantly. I was also curious about the claims of transformation at Burning Man, so, with the support of Dan Ariely, Nina Mazar, and Chuck Howard, I conducted an experiment studying people’s reactions to unfair offers in the desert in 2014, which I shared in an article for Behavioral Scientist.
With all your experience, what skills would you say are needed to be a behavioural scientist? Are there any recommendations you would make?
Behavioral scientists typically have a tremendous depth of skills and knowledge, including enduring curiosity, the ability to ask probing questions, identify assumptions, conduct great research, design good experiments, and analyze data. I believe one of the most important skills is the ability to design experiments under very complex conditions. There’s so much passion for behavioral insights, but the insights continue to emerge and evolve and it is important to recognize that the insights are only valid in very specific circumstances. Having knowledge of the litany of BE tactics is not adequate in the complexity of the real world. The hard part of experiments though is having the discipline and patience to wait for a signal in the noisy real world.
But one of the most important challenges we need to address are organizations with ridiculous expectations. Job postings show they expect an individual to single handedly be able to determine where BE can be applied, champion BE, teach teams how to do BE, and in some cases, to also design studies, conduct research, and analyze data across a portfolio of initiatives. They are expected to have business acumen, financial savvy, and industry knowledge and to be good at science, storytelling, relationship management, project management, team leadership, and consulting. They are also sometimes tasked with building and leading teams with non-scientific skills. It's an impossible and unfair mandate, designed to fail. I’ve seen several fantastic scientists accept these positions, only to end up disillusioned and quit. If an organization wants to make a meaningful commitment to BE, and not burn people out, there needs to be a team coordinated across a number of tasks to get the work done in a reasonable time frame. For starters, there needs to be more careful role distinctions such as having a quarterback with the skills to champion and teach BE, but other resources to engage in the practice of BE. Having been at this myself for 12 years, I have a lot to say about BE and organizational effectiveness. Thankfully, efforts are underway to enhance the professionalism of the field with explorations of things like accreditation, standards, and ethics codes. This will provide much needed guidance to the people who want to work in the field and to those who want to hire them.
How do you think behavioural science will develop (in the next 10 years)?
This question was just asked by Evan Nesterak! He pulled together a fantastic array of contributors published in the Behavioral Scientist. My piece, along with my colleague Nathaniel Barr, were chosen by Evan to be published in the journal. In a nutshell, while Nathaniel talked about the role of creative technologies like animation and virtual reality being brought into the intervention mix, I explained that as much as the concept of using a small nudge to yield big results” is compelling, it has led many to believe that simple interventions are all that BE has to offer. Fortunately, mandates are increasingly moving from one-shot nudges to multi-faceted programmatic interventions to tackle society’s most complex problems.
Which other behavioural scientist would you like to read an interview by?
Nancy Cartwright, the philosopher of science, because she is pushing scientists to go beyond discovering what (seems to) work, but to dig deeper and question ‘why things work’.
Thanks for these amazing answers Kelly!
Now for those who are stuck at home and want more behavioural science. BEWorks is hosting a webinar on the 6th of April, for which you can sign up here. Both Kelly and Adrian Furnham (Professor of Psychology at University College London) will be talking about he impact that work from home policies will have on productivity, creativity, collaboration, culture, trust, and other factors. They’ll provide concrete recommendations geared towards CEOs, HR, and team managers, all behavioural science based of course. So make sure you don't miss that, I'm signed up already!
More interviews to come, in a time like this I will make sure to provide you with enough distraction from the madness going on outside. Stay safe!
