Creating a Service with Empathy + Behavioral Economics

(Worth noting: As you read through the body of work in my portfolio, you’ll notice that my more recent portfolio pieces like this one illustrate a real turn — talking more about my role, questions, concepts and thinking, instead of showing off deliverables, as my work continues to evolve. So by way of framing and setting expectations, I won’t try to encapsulate the full service I’m working on here. I’m just letting you know, dear reader, that the turn is deliberate.)

SCENE

In my new role at Morningstar that I took on in May of 2018, I was presented with some big questions to work on: how do we help people figure out how to do the right things with their money? More specifically, how do we help people learn why they should invest, and help them get to a place where they stick with it?

First, A little context

A few years ago I started to read all the Kahneman and Tversky I could get my hands on. They are the grand poobahs of behavioral economics, which has changed the way we think about how people behave with money and just about everything else at a Nobel Prize level. Their work changed my outlook on design forever, but admittedly, I hadn’t had a chance to really use what I’d learned from them, and other things I’d been studying in service and experience design. So when this role came up, I took it, because:

  • There is a LOT at stake for people, holy cannoli Batman, the scale and consequences are alarming and huge.

  • I love nothing more than a big, wicked problem that people actually need help with.

  • The team I met while interviewing was so stellar I thought, I have to work with them.

  • I was... well, I admit it, bored with UX, partly because I’ve been doing it for so long, partly because it’s being commoditized and partly because I no longer believe new software is the answer to every question.

  • And finally, I was married to a financial advisor for 13 years and helped start an advisory firm in 2009, so I know the ins and outs of the business reasonably well.

And now, Back to our story

At first, I was kind of boggled by the sheer size and scale of the problem. There were so many angles and possibilities!

Enter Dr. Sarah Newcomb, a behavioral economist, who was already working on these questions from her own angle. She wrote a book called Loaded: Money, Psychology, and How to Get Ahead Without Leaving Your Values Behind. A very good read, by the way. (She also interviewed Daniel Kahneman at the Morningstar Investment Conference right when I started working there — for real! In person! Squee! The father of behavioral econ! Such fangirling.)

My collaboration with her has been nothing short of magical in terms of advancing my work on these tough problems. I’ll take one slice of how we work together and describe the impact here.

Business Problem

Morningstar is quite comfortable talking to people who have been investors for a while. The DIY folks who build their own portfolios, people who understand why they need to invest, financial advisors who know how to select investments, people excited by the disintermediation of trading stocks and buying mutual funds, disrupted by companies like Morningstar and eTrade. You know, people who seem “smart” with their money (though that’s really a function of privilege, mentoring and education, a whole other topic). But that’s a small group of people whose numbers are shrinking. And all that change put a lot of pressure on financial advisors to change their approach to their work, not for nothing.

The people who are less understood, and less helped by the financial services field, are those who don’t participate for one reason or another. Time-starved people who look at the investing world, see how complicated it is don’t want to even dip their toes in. People who look at recent history and think, what a bunch of con men. People who are ashamed about what they don’t know, and can’t find their way to ask for help. Lots of reasons.

Back to our question: What about them? How do we help a larger number of people see why investing is something they need to do (no, really, we all need to do it) and help them become successful investors? How do we help financial advisors build the relationships they want to build with their clients, or expand their market to work with people who aren’t currently participating? In short, how do we broaden the circle of investing success to include more people?

My personal goal for the work I’m doing right now is to be part of helping to raise the national savings rate in the US. That’s what success looks like for me, if I’m helping to solve this problem.

Approach

So… I could have wandered about making and testing things for months. Well, actually, I still did that (for like, 3 months), but armed with so much more awareness, I could leapfrog over more months of guessing. In a single conversation, Sarah bequeathed three theories to me that unlocked my ability to do that. They were:

These are great theories but feel a little … cold and inhuman when you start to think about how they might be applied to a service. They are about how ALL people change what they’re doing — that’s important - how ALL people plan and manage change in their lives. After our mind-blowing chat, she said, “now you go do whatever you think is best and let’s talk next week.”

Watching Sarah and I on the next call a week later must have been entertaining. I drew a straight-out-of-Campbell hero’s journey on the whiteboard with the theories wrapped around them to prepare. I hopped on our video call and said I had something to show her. On the way over to the whiteboard, she said, “So I have an idea I want to run by you. Have you ever heard of the hero’s journey, the Joseph Campbell concept?”

Dear Reader, I just about dropped my laptop.

And that was the beginning of one of the best collaborations I’ve ever had. Whenever she and I get into one of our jam sessions, my whole brain is 🔥en fuego🔥 with what could be.

What I learned (so far)

A super rough sketch of progress on a financial goal, missing one gold star. Aside: in doing this work, I’ve learned so far that people see progress as a thermometer and success as a gold star, when asked to draw it themselves.  let’s say this is you, and you’re behind on your goal. The idea of this sketch is to show that even if you’re behind, all you need to know is that you’re off track without judgment, get tangible actions to take to remedy it, and be reminded of why the goal is important before you make any changes.   what you DON’t Need is a guilt trip or a lecture.

A super rough sketch of progress on a financial goal, missing one gold star. Aside: in doing this work, I’ve learned so far that people see progress as a thermometer and success as a gold star, when asked to draw it themselves.

let’s say this is you, and you’re behind on your goal. The idea of this sketch is to show that even if you’re behind, all you need to know is that you’re off track without judgment, get tangible actions to take to remedy it, and be reminded of why the goal is important before you make any changes.

what you DON’t Need is a guilt trip or a lecture.

nudges aren’t ethical

There’s a lot of buzz out there about “behavioral nudges” and honestly we should really just stop it right now. For real, QUIT IT. It’s not ethical.

Oh, they’re real, they’re effective, but they’re usually not done for the right reasons. You can throw a notification here and there to “nudge” people toward something you want them to do, like buy something, and it’s been proven to work. That doesn’t make using them the right thing to do.

Also, long term, it’s not effective if your actual goal is beneficial behavior change (like weight loss, diabetes management, or budgeting). Behavior change happens over time, so you can build the concepts into a service, but not into a single use product, digital or physical. It’s not realistic to expect that a single digital experience for one moment in time is going to provoke lasting positive change.

Money and physical health are like peas in a pod

I have yet to find anything in people’s lives that are as similar as managing your health and managing your money:

  • You have to eat and you have to have money, so they are inevitable, daily.

  • Everything we do with both addresses a need, conscious or not.

  • We arrive at how we eat and how we spend and save as adults with all the baggage of what we were taught as children.

  • The decisions we make about what to do with food and what to spend money on are made … maybe 100 times a day or more, with deliberate temptations thrown in our path constantly (think influencers, ad words, email…)

  • Those decisions have a cumulative effect on our future.

  • The upside of beneficial behavior is hard to even describe.

It’s pretty amazing when you start to see the parallels.

Behavioral Economics should inform but not lead design

Which gets me to my final point: behavioral economics tells you all about how all people react to events and stimuli (hint: not rationally), but it doesn't necessarily explain how to compassionately help people change or shift their response to those things.

That is the responsibility of design: to find a kind and compassionate way to help people not with their reaction — that’s pretty hard-wired — but with their response to what’s happening around them.

By way of example: which friend would you rather have at the table while your’e trying to lose 10 pounds, Spock or Deanna:

Waiter: “Here’s the dessert menu. You had a salad - you should treat yourself!”

Me: “I’m thinking about getting the ganache. I just don’t know. I know I’m not supposed to.”

Spock (behavioral): “You should have given back the dessert menu. It was unplanned to even see it, and the waiter is trying to sell you something. This would sabotage your long-term goal of losing ten pounds.”

Deanna Troy (empathic): “That looks really good and I can see why you’d want it. You did great ordering a healthy dinner. We could check your food diary app to see how this affects the meal.”

What I did there:

My reaction to the menu was predictable and normal, but I have time to plan a response. Spock is right, but it doesn’t feel very good to hear about how bad I am at making spontaneous, technically correct choices. I know it was unplanned, dude. Now I have to do something about it and oh god the waiter is coming back RIGHT NOW.

I made Deanna’s advice about the choice right now and helping me figure out how to respond. Notice that she did not say, “you shouldn’t order that.” Because I already know that, intellectually. I can soft pedal the waiter until I can make a decision I can stick with. Even if it’s ordering the ganache.

That’s because when I’m confronted with the description of something I didn’t know I wanted until someone tried to sell me something by appealing to immediate gratification, it’s just not about the long term goal any more. My brain can’t do that math right now — It’s about CHOCOLATE and wanting to reward myself because someone put a thought into my head that I should reward my good choice with a sub-optimal one. So the best route is to address the impact to my day and right now.

And that is what I’ve learned how to do on a daily basis in everything I make. And not coincidentally, lose forty pounds in the last year.

Improving an employee experience

I think most of us are looking for a calling, not a job. Most of us, like the assembly-line worker, have jobs that are too small for our spirit. Jobs are not big enough for people.

—Studs Terkel, Working: People Talk about What They Do All Day and How They Feel about What They Do

Scene

When I worked in the world of consulting, I sold work that the firm had never done before. Heck, I sold work I’d never done before, which is part and parcel of consulting’s game. It works when you have rock-solid, experienced people running the show and staying with a client project instead of moving on to sell the next thing — as opposed to selling a great project and immediately allocating 20 freshly minted college graduates to run around doing what they, in all their lengthy work experience, think is best that day. Instead, I intended to follow through and do high quality work. (Yes, that was a dig on the consulting industry, and if you’ve ever hired one you know exactly what I’m talking about.)

I knew I could do this work well because I have a lot of faith in the process of human-centered design. I was (and am) certain that most problems in the world involving people and their environment can be worked on by talking to the people who have or are impacted by a challenge or problem. That is where I always start.

I’m going to dance around a lot of things in this piece, like who the company was and showing deliverables, but I learned a ton and got my first real taste of large-scale service design in an organizational context, so I’m including it anyway.

BUSINESS PROBLEM

The team we worked with was a newly formed group called “Employee Experience” within HR. They were formed because there was a widespread undercurrent of low employee engagement that the current HR team couldn’t seem to get to the bottom of and address. This new team was formed to work on this problem and were in the process of trying to find their feet about what they would do. They knew employee engagement numbers were low, attrition was high, and some of the changes being made around remote office work were not going well - people missed the old culture. But what should they do about it? What did people need?

The people on the team were well respected, creative and innovative employees, but, oddly, the other employees we talked to at first were pretty sarcastic and pessimistic about what could be achieved. There was an atmosphere of “the company doesn’t care about its employees like it used to,” which puzzled me at first.

Part of the stated goal of the project was that what we did, we would also teach them to do, so that they could move forward on their own. I was so thrilled to get a chance to do that, because it meant that human centered design could really be used within HR to reshape what employees experience. So that was a pretty cool opportunity.

From a business perspective it was also great to have them trust us. It was risky to dig up old resentments and ask people to talk about their unhappiness, and what we found felt risky to tell them, at first, but they went all in with us once they saw how accurately we were reflecting the company’s culture back to them.

Oh, and halfway through our project the CEO of this thousands-of-employees company changed.

Approach

With the help of an organizational change consultant (who thought I was nuts at first to want to talk to so many people), I persuaded them that the first thing to do was understand the current experience at a deeper level than surveys would tell them, and to use those findings to drive experiments in improving the full employee experience. We asked their HR department to slice and dice their employee population by age, tenure, gender, title, performance rating and company function to ensure an even spread, so that we could get just over 100 people to talk to, which reflected 1% of the US employee population.

Two of us talked to 100 people, traveling to different offices to conduct interviews. We synthesized all of those transcripts. We built out results sets and worked on how to communicate them to the company’s executive leadership, which resulted in empathy maps covering 15 different key areas to work on. We shared and workshopped the maps, and built teams of employees to run experiments for improving things. All of this took 7 months, start to finish.

The overall roadmap for how we’d get work done on the project.

The overall roadmap for how we’d get work done on the project.

Results

The human results of this work revealed that a traumatic layoff event that had happened three years prior was still having a disastrous effect. Apparently not many people handled it well, including senior management, who pretty much avoided talking about it. Trust had been broken, and the ‘survivors’ of the massive layoff were like walking wounded, wondering if it would happen to them next. And because no one would talk about it or admit it could have been handled better for the people left behind to pick up the pieces, people made up their own stories about what might happen to them.

One woman I spoke with packed her things up every day and took them home, because she was working in corporate communications and knew in advance who would be affected — and she knew just how much they weren’t expecting it.

I’ve never worked in a company where there were massive layoffs. I’ve always worked in technology, where we’re relatively safe from events like that. It was really hard to listen to. I understood why people didn’t want to address how it was handled.

Another big issue was the move toward people doing work remotely. Offices had moved to a hoteling model, and several of the smaller ones were being shut down in favor of saving money but keeping crucial employees. The hoteling had the effect of people feeling even more temporary than the layoffs did, because it wore on their psyche to feel like they didn’t have a “home” at work. They were told not to have any personal items on their desks, and were given small lockers for work-related stuff like staplers, which they had to go and get every day.

People were getting up at midnight to reserve the desk they wanted.

The way the whole thing was handled was an unfortunate pile-on to the feelings of being “disposable.” The march toward remote work felt like it was for the company, not employees. It was taking a deep toll on the sense of belonging and culture that people needed, in order to feel like they were “part” of the company.

This ran so counter to what I was expecting because I (personally) generally view remote work as a bonus, and don’t expect much “culture” from a place I work. But a great many people valued working there because of the network they created over time, moving around in a big company, and the opportunities they had because of that network. Now, with so much happening remotely, not only were people less productive because they were running 8 chats while trying to complete a to-do, but they’d lost the sense of team that they really enjoyed.

And the biggest result of all:

Innovation? Puh-LEASE.

When you threaten people’s sense of safety and fail to appreciate them, new and risky ideas are not going to even be spoken, much less heard.

Also, a lot of the people I interviewed said that they felt better after just talking about their work life with me. They said it gave them a different perspective, to talk about it as a whole experience. And the power of feeling heard is strong medicine in what I ultimately decided was a healing process.

Deliverables

This was not your average design project - no end product, no screens, no user flows. On top of being in consulting, where powerpoint is one of your only friends and not a nice one, really, we weren’t delivering a project but micro-experiences, many of them physical. One of our first experiments was to design a first day package that came with a functioning laptop. Another was to design 1:1 conversation guides for managers and employees.

I would have liked to go further — particularly into the remote work culture space — but that wasn’t part of our work.

So, I don’t have a nice bunch of pretty images for this one, because I also can’t say who the work was for.

What did I learn?

About work in general, I learned that

  • The relationship of a company to its employees is more… human than I believed. Because ultimately humans make and execute the decisions, those decisions can feel very personal. The layoffs I heard about felt very much like people never saw it coming, even though senior leaders said things like “they should recognize it’s good for the business’ but … the human toll all of those decisions make is very real.

  • By way of extension, if you avoid the hard conversations, people will fill in the blanks with things that are the worst possible versions of a story they can create in their minds.

  • Remote work dissolves a company’s culture in ways that we have not figured out how to address yet. I still believe that’s where we’re headed, because the confluence of skills, experience, location, and willingness to commute is going to continue to become less and less reasonable, but we have to find ways to build culture. I know of a couple of organizations who have succeeded. They do it mostly through play and humor (showing off things they make or introducing pets as coworkers) and real-world metaphors (like setting up coffees with one another).

  • Second only to that is how people learn to do a new job. Without a guide in the first 6 months, it can feel very lonely if a person is remote all the time. Think about it. You’d feel like you’re in the dark not knowing what to do next, and you have no one to just turn around and ask. Or, at least, I haven’t seen that done well yet.

  • People remember their first day of a new job WAY more than I thought — no matter how long ago it was. They also highly value having someone to guide them through their first week. So much so that “highly value” isn’t a strong enough way to put it.

  • People need to feel appreciated in tangible, stated, clear ways, and if they do, they will be some of the best team members you’ll ever have.

About design in particular, I learned that

  • Talking to people is still the best way to gather data on the why behind the what of what people do, think and feel.

  • Training people to be empathic in a conversation is quite a bit harder than I ever thought it would be.

  • Design can be used to help solve problems in creative ways far beyond software (not like I needed to be taught this, but it was great to have it reinforced).

  • Designing something for thousands of people to have a positive experience with is actually not that hard if you’re human about it, understand the people you’re making it for really well, and consider all the impact you could/might and want to have.