Beyond Policy: How Behavioral Science Can Drive E&C and HR 🧠🛠️

What do urinal flies, hotel towels, and corporate compliance have in common? They all demonstrate the power of behavioral science in shaping human behavior. If you’ve ever wondered why some compliance programs succeed while others struggle, the answer might lie not in your policies, but in human psychology

This episode of The Ethicsverse examines the intersection of behavioral science and corporate ethics & compliance programs, presenting both theoretical frameworks and practical applications. The discussion centers on three key behavioral science principles: reducing friction in compliance processes, utilizing social proof to drive desired behaviors, and aligning incentives with compliance goals. The examples discussed demonstrate how behavioral science techniques such as nudging, expectation setting, and reciprocity can significantly impact program effectiveness. The speakers explore the evolutionary basis of cognitive biases and their influence on workplace behavior, while also addressing the importance of testing and validating behavioral interventions across different cultural contexts. The discourse emphasizes the shift from traditional policy-centric approaches to behavior-focused strategies that acknowledge and work with human psychological tendencies.

Meet The Ethics Experts:

• Rebecca Rehm, Director & Compliance Officer, Olympus Corporation of the Americas
• Matt Kelly, CEO & Editor, Radical Compliance
• Nick Gallo, Chief Servant & Co-CEO, Ethico

Understanding Behavioral Science Foundations

• Behavioral science principles are crucial for compliance programs because humans often act irrationally due to cognitive biases developed through evolution.
• These biases, including present bias and moral blindness, affect how employees interpret and follow compliance policies.
• Companies must recognize that simply providing information doesn’t guarantee behavior change; instead, success comes from understanding and working with these inherent human tendencies.

The Power of Reducing Friction

• Research demonstrates that simplifying policies and making compliance easier significantly increases adherence rates.
• Studies show that policies with multiple components and complex connections to other policies are more likely to be violated.
• Organizations should focus on breaking down complex policies into simpler, standalone documents and providing information in easily digestible formats that match how employees naturally consume information in their daily lives.

Leveraging Social Proof

• Implementation of social proof strategies has shown measurable improvements in compliance program effectiveness.
• For example, GSK’s experiment with different training completion messages revealed that social norm-based messaging (“over half our colleagues have completed the training”) increased completion rates significantly.
• This demonstrates how highlighting collective behavior can motivate individual compliance.

The Impact of Leadership Modeling

• Leader behavior and messaging play a critical role in establishing compliance culture.
• Research indicates that when leaders actively model ethical behavior and share their own experiences with difficult decisions, it significantly influences employee behavior.
• Organizations should actively engage leaders in compliance initiatives and provide them with specific tools and talking points to effectively demonstrate their commitment.

The Role of Expectation Setting

• How compliance initiatives are framed and presented significantly impacts their effectiveness.
• Studies show that setting positive expectations and emphasizing the value of compliance training (rather than apologizing for it) leads to better engagement and retention.
• Organizations should focus on communicating the benefits and importance of compliance activities rather than treating them as necessary burdens.

Testing and Validation Approaches

• Companies like Novartis and GSK have demonstrated the importance of testing behavioral science interventions through controlled trials.
• These organizations have successfully measured the impact of different messaging strategies on training completion and information retention, showing that empirical validation of behavioral approaches is both possible and valuable for improving program effectiveness.
• The key to successful testing lies in starting with small, low-risk experiments before implementing major program changes, allowing organizations to gather data and refine their approaches without significant resource investment.

Cultural Considerations in Implementation

• While behavioral science principles generally apply across cultures, their specific implementation may need adjustment for different contexts.
• Research suggests that socioeconomic factors often create more significant behavioral differences than regional cultural variations, indicating the need for nuanced approaches that consider both cultural and organizational contexts in compliance program design.
• The research particularly highlights that core human tendencies like reciprocity, social proof, and the desire for consistency remain relatively constant across cultures, though their specific manifestations may vary.

The Power of Reciprocity

• Experiments have shown that reciprocity can be a powerful tool in driving compliance behaviors.
• Whether through providing valuable resources, offering assistance during difficult situations, or acknowledging employee time and effort, creating positive reciprocal relationships can significantly enhance program effectiveness and build long-term compliance partnerships within the organization.
• Companies like GSK have successfully leveraged this principle by framing compliance training as a valuable resource created specifically for employees’ benefit, resulting in higher completion rates compared to traditional mandatory training approaches.

Technology Integration Strategies

• Modern compliance programs should leverage current technology and communication preferences.
• This includes using short-form videos, interactive policy documents, and multiple content formats to meet diverse learning styles.
•  The most effective programs recognize that technology should serve as an enabler rather than a solution in itself, ensuring that digital tools enhance rather than complicate the user experience.

Principles-Based Approach

• Rather than attempting to cover every possible scenario in policies, successful compliance programs focus on establishing clear principles that guide decision-making.
• This approach helps employees understand the underlying rationale for compliance requirements and enables them to make better judgments in situations not explicitly covered by policies.
• The principles-based approach has proven particularly effective in complex regulatory environments where it’s impossible to anticipate every scenario, as it empowers employees to apply consistent ethical reasoning across diverse situations.

Closing Summary

The integration of behavioral science principles into ethics and compliance programs represents a significant evolution in how organizations approach workplace behavior change. By understanding and working with human psychological tendencies rather than against them, companies can create more effective, engaging, and sustainable compliance programs. The success of this approach, as demonstrated by leading organizations, suggests that behavioral science will play an increasingly important role in the future of corporate ethics and compliance.