Give it a nudge

Behavioural economics, contrary to its academic name, is a very human subject. It’s about the why and how of our everyday decisions – why we do and what we do.


As such, behavioural economics provides powerful tools for leaders to help shape organisational design decisions to prompt more ethical behaviours. These tools enable leaders to use insights into human behaviour to create environments more likely to result in ethical behaviour as a norm, rather than relying solely on policies and procedures and the personal character of individuals. Behavioural economics points to a people-centred style of leadership, one attuned to human nature and to shifts in culture, as a way of achieving long-lasting positive organisational change.

For those not familiar with this way of thinking it, Give it a nudge represents a great starting point. As the paper suggests, COVID-19 is a real opportunity to start the journey to rethink and redesign organisations with an understanding of people providing the directional arrows.

One such insight is that we humans are inherently social by nature and we mostly want to do the right thing. We love feeling good about ourselves – so designing initiatives that acknowledge our social needs is important. It begins with identifying an overall social purpose for the organisation — one that enables employees to feel good about themselves and their role in helping to achieve positive social outcomes.

For many, I suspect, this a different way of looking at the world. The exercise of rethinking and redesigning organisations based on the insights provided by behavioural economics requires a different type of leadership.

It requires a mindset shift from control to collaboration, where leaders focus on facilitation and empowerment rather than edicts from on high. And it introduces a wonderful new world of nudges, framing and priming.

Acting on a key insight for organisations provided by behavioural economics, that they have a social heart – they are social constructs – will go a long way towards helping rebuild public trust and faith in businesses and organisations.

2021 represents a rare opportunity to break with old ways of doing things.

Give it a nudge.

Ainslie van Onselen LLB MAppFin
Chief Executive Officer
Chartered Accountants Australia and New Zealand

This document was developed and written in partnership
between Chartered Accountants Australia and New Zealand
and Managing Values.




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    Realigning Organisational Values Post Covid-19

    Most organisations have guiding values. These values signal to employees and the marketplace how the organisation intends to pursue success. As employees begin to return to their workplaces, now is the time to review and refresh your values to better respond to the new business environment and be reassured you are meeting your employees’ social needs.


    The Continuum of Values


    Arrow Chart of Values


    Academic research suggests that values lie on a continuum. At one end is foundation values, and on the other, vision values. Focus values are somewhere in the middle. Both employees and organisations can find themselves moving up and down this continuum, especially in times of crisis.


    What Happens in Each Area of the Values Continuum?


    • When in foundation values, employees focus on how to protect themselves. Protecting their back comes at the expense of day to day performance.
    • When in focus values, employees trust their manager because they know what to expect. Managers behave in ways consistent with the organisation’s values. Employees can perform at their best. Together with their leaders, they can look towards a future vision of success for the organisation.
    • In vision values, employees are highly engaged. It is a win-win situation where employees are personally developing from their work experiences, and the organisation is reaping the benefits of high performing employees.

    Good managers keep their people in focus values by behaving consistently with organisational values so that employees know what to expect. When managers or leaders say one thing but do another, people feel unsafe because of the mixed signals. Employees move down the values continuum to foundation values and are robbed of workplace satisfaction and predisposed to disengaging with the enterprise.

    Values-led leaders behave in ways that are consistent with stated values. This consistency enables employees to move towards desired future states. Here, employees embrace new possibilities for themselves and their employing organisation.


    The Effects of Covid on Values


    The social and economic impacts of Covid-19 have demonstrated how uncertainty can push us towards foundation values; we “downshift” into survival mode. Leaders must now find ways to help move their staff back up to focus values. When this happens, employees can get on with their jobs, and the organisation can build towards a vision of thriving in its new context. Enabling employees to move back into focus values involves a lot of reassurance and trust-building. Employees need to know that leaders are focused on keeping them safe even as realigning organisational strategies to respond to the new normal. The additional benefit of working to keep employees in focus values is that it promotes psychological safety and well being and helps address the critical social needs of a post covid workforce.

    Employees can only move to a future vision they can imagine, so leaders must be talking about the organisation’s vision. The pandemic has given everyone an experience of how quickly they can change when necessary and has enabled employees to hone personal skills in change management, so leaning into change has become a new norm rather than resistance to change. Leaders can leverage these new change management skills to help employees reengage or realign with the organisation’s values and contribute to building a shared vision of success.


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      How do I know if I am an ethical manager?

      Field research finds time and time again that how managers behave has more significance on how employees behave and their willingness to accept ethical accountabilities than EXCO teams or CEOs. Such managerial influence brings important ethical responsibilities often not made explicit to newly appointed managers and team leaders.

      Reflecting on your managerial style is the first step to improving your ethical skill development and can begin by reflecting on these four indicators from ethics field research. Positive responses will indicate you are actively addressing the ethical dimension of management:

      1.  My team describes me as a fair manager

      2.  I know the strengths of individual team members

      3.  I know what might make my team do the wrong thing

      4.  I know how my personal biases shape my managerial style


      For those not quite there yet and still aspiring, key steps include:

      • Leading by example by talking about why the organisation’s values matter and linking them to how things get done. Sharing personal challenges in promoting values-based decisions to nurture psychological safety
      • Reviewing mindsets about management moving towards a mentoring style that promotes trust
      • Investing time in getting to know team member’s strengths, needs and preferences to empower them
      • Prioritising clarity on KPI’s while ensuring staff have the necessary resources to do their best work
      • Purposely designing your team’s culture to ensure it is inclusive and maintaining supervising communications to promote well-being
      • Regularly checking in with the team about existing ethical challenges or values tensions to encourage two-way communications
      • Mastering the skill of empathy to promote fairness and effective communications

      Most of us see ourselves as ethical people. Our ability to live up to our ethical ambitions depends on acquiring the skills necessary to respond to contextual challenges and maintaining a commitment to ensuring our impacts stay positive.

      Please fill out the form below to get in touch regarding your organisation’s needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at [email protected].

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        The role of business in future-proofing employability

        Digital transformation, automation robotics and the Internet of Things are transforming the world’s workplaces at breakneck speeds. By 2025, The World Economic Forum warns 54% of employees will require significant upskilling due to automation and AI advances. The Brookings Institute reports that 25% of American jobs are at a high risk of becoming automated by 2030. It’s not just Americans under threat. Australian employees could face an even higher risk from automation due to our resource-based economy. In the face of this warp-speed change, how are today’s business leaders enabling their staff to remain employable?

        The ever-increasing use of automation, AI and other new technologies heralds the 4th Industrial Revolution. Failing to act now could sentence current and future generations to permanent exclusion from economic participation.

        The workplace is not just a means to a pay packet. It’s where we as human beings develop our skills, find our purpose and self-actualise. If we can’t participate in the economy due to lack of skills, will personal development and social progress be stymied as a result?

        Business is the central institution in the world today. Private enterprise has both the reach and resources to dwarf many national governments. Business is therefore a key player in responding to the increasing employability challenge. It has the luxury of taking the long view while governments increasingly restrict their horizons to the next election date.

        Leading businesses such as Unilever and Ikea are Business could also take the lead in shaping the digital transformation of our economy.

        The interdependence of social prosperity and economic prosperity is undisputed. The devastating social impacts of the GFC on global youth unemployment, and more recently the effects of the COVID-19 pandemic, stand as stark reminders of this interdependence. Society’s continued progress now depends on business leaders addressing the impacts that emerging technologies will have and designing strategies to offset potential consequences.

        The good news is that leading brands such as PWC, Accenture, Microsoft or Mastercard, are already investing substantially in upskilling or reskilling their staff to safeguard their employability as the economy evolves. Leaeading organisations are also working alongside national governments and global institutions like the World Economic Forum, World Trade Organisation and the United Nations. These collaborations seek to develop strategies and allocate resources into comprehensive training and skilling programs.

        The challenge today, which every Board and Exco team faces, is the ethical challenge of participating in these visionary initiatives to ensure they are playing their part in protecting society’s place in the work environment. Social progress and prosperity depends on the outcome of this collaboration.

        Visionary business leaders have already moved their HR functions into the strategic domain, on par with other business imperatives. They recognise that investing in organisational learning is critical to long-term sustainability and comes with a significant ethical dimension. Let’s hope we don’t have to wait too long for others to join them.

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          A new way to build inclusive workplace cultures

          When toxic workplace behaviour is exposed, such as currently in our Parliamentary workplace, it should be seen as a symptom of poor culture design rather than rogue individuals. Many workplaces are built on false assumptions, namely innate employee competitiveness and selfish motivations, which enable or promote toxic behaviour. Addressing poor workplace behaviour is a culture redesign challenge for leaders, rather than leaving it to the HR department.

          Behaviour science shows that rather than being innately competitive, we are predisposed to prosocial behaviour and organisations can benefit from it. Elinor Ostrom received a Nobel prize in 2009 for demonstrating that people are predisposed to cooperation; they create rules and organisations based on it. ‘Prosocial’ behaviour is characterised by a concern for others’ rights, feelings and welfare. It is behaving in a manner which promotes the well-being of others. We all have social needs that we seek to have met in our workplaces. We value the same things – being respected, included, appreciated and feeling safe in our environment.

          Examples of this predisposition are all around us. In Australia, we can see the prosocial behaviour of our beach lifeguards, our volunteer firefighters in the summer or our blood donation drives in the office. These prosocial behaviours and underlying selfless motivations are apparent in all the world’s varied cultures and peoples

          We can also see evidence of this in the Parliamentary workplace scandal; the selfless and often self-harming actions of whistleblowers who speak out. These prosocial actions typically come with anticipated and significant personal costs to the whistleblowers.

          So why do we see prosocial behaviour in some workplaces and not others?


          Social scientists suggest that our workplace context can determine whether we engage in prosocial actions. Many not-for-profit organisations, such as Mozilla Firefox or Wikipedia, owe  their success to individuals’ prosocial orientations, their desire to join organisations enabling them to express themselves. When asked, many public servants point to a prosocial motivation (e.g. ‘Creating a better society’) as their reason for joining the sector. On the flip side, HR professionals understand it is because of unmet social needs that many employees leave their position regardless of the job salary and perks.

          By failing to respond to these innate social needs, a vicious circle emerges where employees feel cheated and are more likely to cheat the organisation in turn. Gallup research estimates that only ⅓ Australian employees are engaged at work due to not having their needs met beyond monetary compensation. This lack of engagement leads to conduct risk.

          Innovative organisations, particularly newer ones, are already designing their corporate culture on cooperative principles. Organisations such as Zappos and Atlassian design culture to address employees’ social needs and deliberately promote inclusive workplaces. Global brands such as Novartis are now encouraging their leaders to hone their social skills to promote a unifying organisational purpose to employees. This shared purpose helps to harness social or ethical priorities and promotes a more cooperative orientation towards achieving the organisation’s goals. Managers must engage in honest communication with employees to address the ongoing ethical and social challenges of attaining these goals. Honesty from leaders promotes psychological safety, which helps build an inclusive workplace culture.

          One of our most pressing human needs is to feel good about ourselves, and as social animals, we use workplace groups to support and cultivate positive self-concepts. Because people mostly conform to what significant others around them are doing, managers modelling prosocial behaviours enable respectful workplace cultures to emerge while appeals to group identity maintain shared standards.

          How do I get started?


          A more human-centric approach to culture design means inviting employees’ input and ideas on how best to design organisational systems that work for them and their views on how they can better support each other to foster a more inclusive culture. The healthiest cultures are co-designed.

          In a low-trust interconnected world, demands for more workplace diversity, equity and inclusion will only accelerate. Recognising our prosocial natures and leveraging these to promote psychological safety is a strategy guaranteed to provide benefits for both the organisation and it’s members.

          Let’s hope Parliamentarians are listening.

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            Do Poor Management Practices Shape Collective Unethical Behaviour?

            How do so many employees manage to find themselves caught up in unethical business practices? Often these are not of their own choosing and don’t even benefit them personally. Consider the employees caught up in the scandal which engulfed General Motors (GM) at the beginning of 2014. This scandal was over its 10-year failure to rectify a faulty car component. This event occurred despite inside knowledge of its link to accidents and deaths. Why? The study of behaviour ethics has produced some interesting insights on the subject.

            Company Dynamics that Can Cause Unethical Behaviour


            The study of behaviour ethics focuses on how company dynamics can give rise to such collective unethical behaviour. Behaviour ethicists draw on field research to comment on why this happens. Unethical decisions at work have less to do with the character of employees. They are much more influenced by the context employees are in when making decisions. They suggest that contexts can be stronger than reason, values, and good intentions. Ethicists point to some key organisational dynamics that rarely get acknowledged:


            Employees experience contexts that shape the way or ‘the frame’ by which they see things. Individuals can narrow the information they use or screen out unwanted information. The role of frames was exposed by the inquiry into the Challenger space shuttle disaster. Concerned engineers had wanted to abort the launch but were invited to change their frame of reference.

            “Mr Mason said we have to make a management decision. He turned to Bob Lund and asked him to take off his engineering hat and put on his management hat.”

            The new frame of reference, the management frame, allowed the launch to proceed and seven astronauts lost their lives.

            The way you construe a decision then can have a profound result on the decision made. Frames such as ‘if it’s legal, it’s okay’ or ‘I have nothing to personally gain from this’ are common. They can also lead to unethical choices and behaviour as they screen out ethical considerations.

            Ethical Blind Spots

            Contexts can be so strong that people might engage in unethical behaviour despite good intentions. An example might be where people frame their actions in terms of ‘it’s a business decision only’. They avoid canvassing any downside, such as the negative impacts their decisions will have on others. Shonky financial advisers might have justified their decisions thus.

            Ethical blindness might cause us to engage in unethical behaviour without realising that it is wrong. There was an inquiry into GM over the non-disclosure of its faulty ignition switch. The findings showed that the GM culture meant that people avoided giving management bad news. It had been that way for decades. Almost no one was ever held accountable for a decision, partly because committees made most decisions.


            Perhaps the biggest contextual pressure on employees comes from time pressures. Time restrictions encourage employees to be reactive rather than review decisions on the merits of each case. Time and peer pressures to ‘go along to get along’ are the systemic source of much unethical behaviour in modern workplaces. Succumbing to these contextual pressures sees employees bypass their personal values and formal codes. Instead, they do what’s necessary to get the results required.

            How can you avoid unethical cultures emerging? A regular ethical review of your business will reveal any contextual pressures. This strategy can protect employees and companies from becoming blindsided to inappropriate behaviour. Business ethics training needs to be context-bound. It must speak to the authentic issues and challenges facing each organisation and its industry.

            If companies wish to promote their code of conduct’s ethical principles, they must ensure their employees are skilled to withstand contextual pressures. Otherwise, these strains can leave them vulnerable to participation in collective unethical business behaviour.

            Please fill out the form below to get in touch regarding your organisation’s needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at [email protected].

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