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Diciembre 2016 © Copyright Insitum 2016 Think Before you Do: Service Design and Behavioral Economics Service Experience Chicago, Aug 2016 Luis Arnal #designthinking @insitum @luisarnal

Service Design and Behavioral Economics

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Page 1: Service Design and Behavioral Economics

Diciembre 2016  © Copyright Insitum 2016

Think Before you Do: Service Design and Behavioral EconomicsService Experience Chicago, Aug 2016

Luis Arnal

#designthinking @insitum@luisarnal

Page 2: Service Design and Behavioral Economics

INSITUM HELPS ORGANIZATIONS SOLVE COMPLEX, STRATEGIC, AMBIGUOUS PROBLEMS THROUGH PEOPLE-CENTERED APPROACHES

MOST OF THESE PROBLEMS CAN BE SOLVED BY INNOVATING PRODUCTS, SERVICES, BRANDS, PROCESSES, EXPERIENCES.SUCH AS: DESIGN THINKING, LEAN

PROCESSES, ETHNOGRAPHIC RESEARCH, USER EXPERIENCE DEFINITION, BEHAVIORAL SCIENCE, INNOVATION CONSULTING, ETC.

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CHICAGOBARCELONAMÉXICO CITYBOGOTÁLIMASÃO PAULOBUENOS AIRES

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WE WORK WITH LEADING COMPANIES

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Diciembre 2016  © Copyright Insitum 2016

A few years ago...

CREDIT: FOLLYGRAPH, 38 WAYS TO MAKE A PERFECT COFFEE - 2ND EDITION

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Diciembre 2016  © Copyright Insitum 2016

Today

CREDIT: FOLLYGRAPH, 38 WAYS TO MAKE A PERFECT COFFEE (CROPPED IMAGE)

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Diciembre 2016  © Copyright Insitum 2016

A few years ago...

Page 8: Service Design and Behavioral Economics

Diciembre 2016  © Copyright Insitum 2016

Behavioral Economics Stoicism & other

philosophy schools

Positive Psychology

Design Research

Data ScienceData

Visualization

Art

Political Science

Service Design +

Organizational development

Page 9: Service Design and Behavioral Economics

Diciembre 2016  © Copyright Insitum 2016

Behavioral Economics

Behavioral economics explores why people sometimes make irrational decisions, and why and how their behavior does not follow the predictions of economic models.

http://www.investopedia.com/terms/b/behavioraleconomics.asp#ixzz4IaP3ivr2

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a) Both are the same sizeb) Blue is longerc) Red is longerd) I’d rather not respond now

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Diciembre 2016  © Copyright Insitum 2016

Economía Psicología

“errare humanum est”

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Diciembre 2016  © Copyright Insitum 2016

Today

As a Research tool (to explain observable behavior or plan for the best approach)As an Assessment tool (to evaluate current experiences / system)As an Ideation tool (to inspire the divergent thinking phase or purposefully embed principles in the design)

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Diciembre 2016  © Copyright Insitum 2016

Why some patients are reluctant to switching to a new therapy in spite of having evidence that supports higher efficiency?

Research Assessment Ideation

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Diciembre 2016  © Copyright Insitum 2016

Barrier to switching therapy: Switching treatment is hard because people have invested time, money, pain, and learned behaviors. Letting go means losing that investment.

Research Assessment Ideation

Sunk Cost Fallacy: The more you invest in something the harder it becomes to abandon it.

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Diciembre 2016  © Copyright Insitum 2016

Chronic-disease patients can spend years expecting an unrealistic goal (finding a cure) instead of doing things that will make them happier or improve their quality of life (i.e. running a marathon)

Research Assessment Ideation

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Diciembre 2016  © Copyright Insitum 2016

Study novice and advanced patients: When inquiring about patient needs, advanced patients have more manageable expectations and clearer priorities (but less quality of life) than novice patients.

Research Assessment Ideation

Intertemporal Choice: People make decisions (and have desires) based on their current situation, not their future one.

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Diciembre 2016  © Copyright Insitum 2016

Research Assessment Ideation

Long periods of unresponsiveness and lack of decision making from the patient allows the tumor to advance and metastasize, leading to a vicious cycle of problems.

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Diciembre 2016  © Copyright Insitum 2016

Loss Aversion: Losses hurt more than gains feel good

Attitude towards Chemotherapy: For women, losing hair or a breast makes them reluctant to therapy—even if such “losses” can save their life. This leads to more effort, stress, unhappiness or death.

Research Assessment Ideation

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Diciembre 2016  © Copyright Insitum 2016

Research Assessment Ideation

Why some doctors prescribe the same therapy to all their patients?

Page 23: Service Design and Behavioral Economics

Diciembre 2016  © Copyright Insitum 2016The Anatomy Lesson of Dr. Tulp, Rembrandt

Status Quo Bias: People tend to choose the default option because they are unwilling to assume the time, effort and risk of a different choice.

Using guidelines releases MD’s responsibility: Doctors rely excessively on guides when choosing a therapy, even when suspicious that other options might be more effective

Research Assessment Ideation

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Diciembre 2016  © Copyright Insitum 2016

Research Assessment Ideation

Why do patients delay the process for obtaining a diagnosis—mostly when a chronic illness is involved?

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Information avoidance: People avoid receiving information which may lead to negative emotions.

Delayed suffering: Instinct pushes people to delay / deny / disagree with bad news, such as a chronic disease, because of the additional resources (i.e. mental, time, money, emotional) this will demand.

Research Assessment Ideation

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Diciembre 2016  © Copyright Insitum 2016

Research Assessment Ideation

Patients prefer to go to a hospital rather than a clinic, in spite of crowded halls, long lines, not guaranteed appointments, and other risks

Page 27: Service Design and Behavioral Economics

Diciembre 2016  © Copyright Insitum 2016

Research Assessment Ideation

Rename clinics: Position clinics as hospital extensions will increase their reputation and patients will be more evenly distributed within the healthcare system.

Availability Heuristic: People rely on easy to access decisions (top of mind)Bandwagon Effect: People do and believe things just because others do or believe the same

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Diciembre 2016  © Copyright Insitum 2016

Research Assessment Ideation

Patients stop treatment once they start feeling well , avoiding the doctor experience (potential bad news, reminding sickness, interrupt daily activities, cognitive stress, etc.)

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Diciembre 2016  © Copyright Insitum 2016

Research Assessment Ideation

Super sticky adherence: Have someone else with positive attributes (friendly female) visit patient in their home and bond in order for positive attributes of the nurse/experience migrate to the therapy.

Halo effect: Attributes of a thing/person/experience will spread over if you put them together.

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Wrapping up:

If you look closely, you will find that most experiences are affected—positively or negatively—by a number of BE principles.Identifying these allows you to understand [behaviors, thoughts, decisions, needs], dissect [problems, systems, consequences] and design [define, prioritize, ideate]Service designers should be proficient in these principles if they want to use them purposefully to help people live better experiences.

Page 31: Service Design and Behavioral Economics

Diciembre 2016  © Copyright Insitum 2016

Behavioral Economics Stoicism & other

philosophy schools

Positive Psychology

Design Research

Data ScienceData

Visualization

Art

Political Science

Service Design +

As a Research tool (to explain observable behavior or plan for the best approach)As an Assessment tool (to evaluate current experiences / system)As an Ideation tool (to inspire the divergent thinking phase or purposefully embed principles in the design)

Organizational development

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Diciembre 2016  © Copyright Insitum 2016

Nitrogenated coffee?[look for image]

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Diciembre 2016  © Copyright Insitum 2016

Gracias!Thanks to Thomas Hahn, Olivia Radillo, Eyra Perez and Nathalie Cacheaux—most of the ideas presented here came from them

[email protected] @luisarnal