Buurtzorg is a Dutch healthcare organisation that has grown from a small start-up to one of the most successful healthcare providers in the Netherlands, with more than 10,000 employees. It has a radically decentralised model of care, where small teams of nurses are empowered to make decisions without top-down oversight. These teams have the autonomy to assess patients’ needs, coordinate care, and solve problems independently. This has resulted in higher levels of patient satisfaction, lower costs, and more engaged employees.

This is in contrast to traditional healthcare systems, which are often structured hierarchically, with nurses and other frontline staff bound by strict protocols and, as such, can face delays in seeking approval for changes. Buurtzorg’s success is a good example of how a more collaborative and decentralised approach that values autonomy and decision-making at the frontline can foster better outcomes for both employees and patients.

And they are not alone; other organisations have notably adopted decentralised, collaborative management models. Morning Star, a Californian-based tomato processing company, operates with a self-management structure, allowing employees to make decisions independently, boosting accountability and innovation. W.L. Gore & Associates, known for Gore-Tex, has a flat structure where leadership is based on influence, encouraging creativity and quick adaptation. Valve, a video game company, has no traditional managers, enabling employees to choose projects based on passion, which fosters high engagement.

Organisational psychologists, such as John Amaechi, have challenged old-style command-and-control management, suggesting it is looking increasingly anachronistic in fast-changing environments where rapid, decentralised decision-making is crucial. So how are organisations meant to operate? What evidence is there concerning what works? And given that organisations are made up of people, what part does behavioural science have in helping to ensure organisations, in terms of their structure, processes and culture, are well equipped to operate in new ways?

To explore this, it is helpful to first consider the different ‘eras’ of management practices so we can see just how different the requirements are for today’s organisations than in the past, and why.

Three Eras of Management Practices

Rita McGrath helpfully identifies three distinct eras in the development of management practices, each reflecting how organisations have necessarily adapted to the challenges of their time. The first, named the Era of Execution, emerged during the Industrial Revolution. At this time organisations were seen as machines, which meant that efficiency, predictability, and scalability where prioritised. This led to hierarchical command-and-control structures that enforced standardised workflows and quality control measures. Of course, while we cannot underestimate the success of this model, its very strength of rigidity offering stability and consistency also meant there was little room for flexibility or rapid adaptation.

This was followed, writes McGrath, by the Era of Expertise. This gained prominence in the mid-20th century, shifting the focus to knowledge work and specialisation. The era introduced new management theories rooted in the social sciences, and managers were encouraged to move away from their formerly authoritarian positions to become coaches, emphasising employee engagement, emotional intelligence, and the importance of adaptability. However, even in this era, rigid processes often remained embedded in organisational structures, the bane of many workers lives as they were perceived as stifling innovation and responsiveness in dynamic environments.

So where does that leave us today? McGrath suggests we are now in the Era of Empathy where flexibility and inclusivity are needed, alongside creating meaningful experiences for the workforce and wider stakeholders (such as the communities in which organisations operate). Managers are now expected to operate quite differently, building networks, fostering collaboration, and leading with emotional intelligence.

But are these shifts merely passing trends in management practices or do they actually reflect changes that are needed for organisations to be successful? A meta-analysis undertaken by Lindy Greer and colleagues of 54 studies across a total of 13,914 teams suggests the latter. Their findings showed, on balance, that hierarchy tends to negatively impact team performance, creativity, decision-making speed, and adaptability, all of which are crucial for long-term organisational success

A more recent study by Fengli Xu and colleagues in 2022 analysed data from over 89,000 scientific publications and found teams with flatter structures, where leadership roles are more evenly distributed, tend to produce more innovative and impactful research.

So there does seem to be empirical support that a shift away from command-and-control management can result in positive outcomes. But what is the human story that underpins making this work?

Mindsets: Shifting Toward a More Adaptive Perspective

To explore this we can draw on Carol Dweck’s Fixed and Growth Mindset Theory that offers, (as we have set out previously), helpful insights into the way beliefs about abilities influence performance. A Fixed Mindset, which sees talent as static, encourages hierarchical systems that discourage collaboration and risk-taking as it assumes those with greatest talent are not only few and far between but are typically at the top of the organisation. In contrast, Dweck proposes that a Growth Mindset encourages learning and adaptability, enabling people to experiment, iterate, and work out how to thrive in dynamic environments. This move from the ‘know it alls’ to the ‘learn it alls’ has been hugely influential and challenges many organisations to rethink their culture.

We can extend this thinking further with a paper by leadership researchers Jon Stokes and Sue Dopson who argue for a similar shift they describe as Ego to Eco. They argue we need to be moving away from traditional, hierarchical ‘Ego-centred’ leadership models toward a more interconnected and systemic ‘Eco-centred’ approach. On this basis, leaders need to evolve beyond traditional (vertical) top-down decision-making to embrace a mindset that values (horizontal) collective intelligence and participatory collaboration. This shift enables organisations to respond more dynamically to complex challenges, creating an environment where diverse perspectives contribute to problem-solving and innovation

Given the research appears to back this up, what can organisations do to encourage Eco-centred leadership, and how can behavioural science help?

From Ego to Eco: Behavioural Science and Transformation

Usefully, Stokes and Dopson identify five key capabilities for leaders adopting Eco-centred approaches, each of which have behavioural implications. We look at each of these and their behavioural implications in turn:

1. Shaping the Conversation: When a leader speaks, the desired effect is not only to describe a given reality, but also to change that social reality. This reinforces the need for understanding the psychology of the way ‘scripts’ (agreed narratives) can close down certain ways of thinking; success then requires leaders to unearth these ‘social silences’ and tackle the ‘awkward’ truths that are quietly shaping the organisation.

2. Cultivating Collective Intelligence: It is increasingly recognised that knowledge is less about what happens in individual brains, and more to do with communities of brains working together and dividing up ‘cognitive labour’. This means behaviourally informed ways to optimise collaborative working and sharing knowledge but also understanding the mechanisms by which know-how spreads and becomes currency.

3. Examine the Context: Taking a behavioural approach allows a better understanding of the wider ecosystem the organisation is operating in. Some systems are ‘simple’ (meaning conventional best practice guidance can be used to determine strategy) whilst other systems organisations find themselves in can be complex (meaning it is important to set broad goals and monitor for patterns to adapt as things clarify).

4. Co-Creating Structures: The notion that there is a perfect structure for an organisation can be misleading; instead, it is better to think of structure as something that needs to be evolved together with members. This means structures are more likely to reflect the needs and realities of the organisation as a whole, but also give people a sense of ownership and accountability. In addition, it helps to rein in senior leaders who are prone to overestimating both their own skill levels relative to others and the (unrealistic) positivity of outcomes stemming from their personal decisions.

5. Pluralising Participation: Encouraging pluralistic participation aligns with behavioural findings that diverse teams often outperform homogeneous groups by bringing varied perspectives to complex problems to inform and shape decision-making. Leaders are therefore encouraged to facilitate conversations that foster psychological safety and openness, enabling inclusive teams to challenge norms and generate innovative solutions.

We can see the way that ‘Eco-leadership’, as envisioned by Stokes and Dopson (and adapted by us), embraces complexity and fosters inclusivity which enables organisations to thrive in uncertainty. And with a more explicitly behavioural understanding within these Eco-leadership capabilities, organisations can create cultures that are not only more adaptive but also more human-centred.

Making change happen

We cannot underestimate how difficult this fundamental shift can be from Ego to Eco: it requires letting go of deeply embedded structures that often enabled an organisation's success in the first place. But it also requires encouraging people to interact the organisation (and hence each other) in quite different ways.

So what can we do to bridge this gap? We suggest a small number of simple guiding principles to support this transition (with a handy mnemonic!):

1. Evaluate: The opportunity to give and receive feedback in real-time allows people to quickly monitor and evaluate understanding of changing conditions and stakeholder needs.

2. Co-create: Encouraging employees and stakeholders to bring their own perspectives, experiences and skills to a problem in a collaborative manner plays to the value that comes from collective intelligence (but also supports the collective emotional state of an organisation of course).

3. Ownership: Rather than simply guiding behaviour implicitly, there is a need to help people and teams develop the skills and mastery to drive change. The finding that people look to the bottom of the status hierarchy, rather than the top, for information about social norms suggests this has real potential for driving fundamental organisational culture change.

By integrating these elements, we suggest that organisations can create adaptive, participatory environments that allow for a more rounded ‘Eco-culture’. We can look at this more tangibly by focusing on the pressing issue of cybersecurity within organisations.

Case study: An Eco approach to cybersecurity

There are huge risks for organisations with cyber-security threats getting ever more sophisticated as AI tools become available to criminals. This has led the World Economic Forum to estimate that the global cost of cybercrime will jump to $23.84 trillion by 2027, up from $8.44 trillion in 2022.

The responsibility for managing cybersecurity behaviours in the workforce often falls to IT teams, but of course, their expertise often lies in technical problem-solving rather than risk communication. And many of the current approaches to cybersecurity all too often seem to reflect a top-down, directive (‘Ego’) style where IT teams act as authority figures, broadcasting facts and expecting compliance.

This approach treats employees as passive recipients of information rather than active participants in shaping cybersecurity practices. By contrast, an Eco-centred approach would shift the focus toward a more dynamic, participatory system that engages employees in co-creating cybersecurity solutions. This would involve fostering ‘relational trust’, as researchers Karen Cook, Russell Hardin and Margaret Levi suggest, where employees and IT teams build strong networks of communication and shared understanding.

So how can we take our behavioural ‘Eco’ principles into cybersecurity strategies? Ways this can be done include:

1. Evaluate: Real-time feedback mechanisms, such as automated alerts after simulated phishing exercises, security failures and near misses, can help employees internalise lessons and adjust their behaviours straight away. For example, an employee who clicks a fake phishing link could receive instant feedback explaining why the email was suspicious, embedding the lesson into their day-to-day awareness.

2. Co-creation: Organisations could host regular discussions where, in a safe space, employees are able to share their own experiences with suspicious emails and together with the IT team refine cybersecurity protocols. This leverages collective ‘hive’ intelligence to understand what good looks like for countering evolving threats.

3. Ownership: Finally, employees can be empowered to develop protocols that help others identify and address subtle contextual anomalies in emails. For instance, a workforce designing ways to get to know each other better, then it will be easier for them to recognise the very nuanced ways that an email might be suspicious (e.g. does not have quite the right sort of signature format or comes from an unexpected sender who does not normally email at that time of day) and needs to be checked out.

We can see through this simple approach that current cybersecurity practices are too often rooted in an Ego-centred orientation that emphasises compliance over collaboration. Behavioural science can be a more effective support to building a much more robust Eco-orientation to cyber-security, critical given the high risk, dynamic landscape of cybercrime.

Conclusion

The journey from rigid, Ego-centred organisational structures to dynamic, Eco-centred systems is not just a theoretical nicety; it seems an essential evolution given the high-risk dynamic environment organisations now operate within. Organisations are under pressure to adopt flexibility, inclusivity, and collaboration, prioritising human connection alongside operational efficiency.

Behavioural science has an important role to play here, bridging the gap between Ego-centred and Eco-centred cultures. In cybersecurity, for instance, these principles are much needed to help organisations to shift from compliance-driven, top-down approaches to participatory Ecosystems that foster trust, adaptability, and resilience.

What is needed are not only structural changes to organisation structures but a fundamental rethink of organisational mindsets. In this context, behavioural science needs to be more than a tool for guiding behaviour, acting as a catalyst for creating human-centred organisations that can thrive in uncertain conditions.

Cyber threats are becoming increasingly common and sophisticated, targeting both individuals and organisations. Consider the following scenarios: an email lands in your inbox from your employer, offering a gift card and asking you to click a link to claim it, or news arrives via email that you are off the waitlist for Taylor Swift’s Eras Tour, and you click a link to register. In both cases you will have failed a phishing test by your employer, used to train people on how to recognise attacks.  It is only when employees report an email that they pass. 

If you would have failed, then you would not be alone – a security awareness company sent over 17,600 Taylor Swift phishing emails with over 533 people clicking on it. Whilst in percentage terms that seems pretty good, each one of these could potentially cost the organisation millions in recovery efforts, legal fees, and lost revenue. And added to that can be potential fines, such as in the UK where the Information Commissioner's Office is able to levy fines for lapses in cybersecurity of up to £17.5 million or 4% of the annual turnover of the parent company. There are huge costs involved with the World Economic Forum estimating that the global cost of cybercrime will jump to $23.84 trillion by 2027, up from $8.44 trillion in 2022.

Given the pervasiveness of IT systems in our lives, managing everything from our employment, finances, health, social relationships and so on, then we are arguably in a time when cyber-security threats represent a huge challenge to our wellbeing. This threat this is of course not purely technical but has a strong social element. Defending against phishing attacks is challenging because identifying a phishing email requires specific social context that only the recipient possesses, such as expected communications and trusted contacts.

Given the techno-social element of these attacks, it is clear that humans are a crucial part of the defence against cybercrime. Behavioural science can be called upon to consider how people can best be equipped to defend themselves and their organizations. But in doing so, we can ask what is reasonable to expect of people, and how they can be best equipped to defend themselves and their organisations.

The Growing Threat of Phishing

Phishing attacks are considered one of the top cybersecurity threats organizations face, with the UK Government's Cyber Security Breaches Survey finding that 90% of businesses that experienced cyber crime reported phishing as the primary type of attack they faced. These can take a number of forms:

• Spear Phishing: Targeted attacks aimed at specific individuals or organizations.

• Whaling: Targeting high-profile individuals like executives or public figures.

• Smishing: Phishing attacks conducted via SMS or text messages.

• Vishing: Phishing attacks conducted via voice calls.

Deloitte's 2024 Cybersecurity Threat Trends Report notes that these forms of phishing are  common entry points for more sophisticated attacks. This can include picking up information that is then used to ‘socially engineer’ communications for actions such as intercepting communications to redirect funds or downloading malicious software (malware) designed to block access to a computer system or encrypt data until a ransom is paid to the attacker.

And not even those who might expected to have high levels of security are immune: in 2020, Twitter experienced a high-profile phishing attack that compromised the accounts of prominent figures like Elon Musk and Barack Obama. So protecting against cyber-crime is a hugely pressing issue for all organisations (and of course individuals on their home computers). So just how is this done?

The history of modern organisational cybersecurity

Early organizational IT security strategies were heavily influenced by the metaphor of the firewall, drawing from the concept of physical firewalls in buildings. In buildings, firewalls contain fires within specific areas, preventing their spread to protect the entire structure. Similarly, in computing, firewalls were designed to establish a secure perimeter around the organisation, isolating it from external threats.

The firewall metaphor emphasized the importance of separation and control over movement. Just as a physical firewall in a building limits the spread of fire, a digital firewall restricts the flow of data, allowing only certain types of traffic and interactions to pass through. This creates a protected interior space where valuable digital assets can be safely contained.

However, the metaphor of the firewall in IT security strategies also places significant responsibility on employees within organisations because while it managed external threats, the onus was on employees to maintain the integrity of the organisation’s network by being vigilant against accidental breaches, unauthorized activities and insider attacks. This typically requires employees to have ongoing security training and awareness to recognize and report suspicious activities. With this focus on the importance of the workforce, how can this group of people be encouraged to have effective engagement in cybersecurity?

The role of the employee in cybersecurity

Typically, it is the responsibility of the IT team to manage the wider employee’s cybersecurity behaviours. However, expertise in technical issues does not necessarily translate to expertise in risk management communication.  All too often technical experts tend to think cyber behaviours are caused by a lack of available facts or understanding of the consequences of certain actions. This leads to the tendency to tell people what they think they ought to know, in other words a ‘broadcast of facts’.

Of course, the problem here is that it is fact -focused rather than audience focused – unfortunately it has been found this results in IT professionals tending to blame users security incidents with words such as ‘lazy’, ‘stupid’ or ‘ignorant’ being used. Of course, there have been significant advancements, and most modern IT departments now adopt a more enlightened approach, encouraging whistleblowing and implementing a no-blame policy for reporting security lapses. Whilst these steps are necessary, there is clearly more that needs to be done and the next step is to consider how to better educate users to deal with cyber security threats, such as phishing attacks. 

Education is clearly needed but there are also challenges with it. Education works best when people are motivated – but the evidence suggests that people are not motivated to engage on this issue and in fact will frequently seek to avoid it. In addition, application of the training and feedback on the steps taken are needed to embed what has been learnt in the ‘classroom’ to real life. The challenge here is that no-news is often good news in cyber-security in which case the training runs the risk of being a tick-box exercise rather than something that is properly engrained in day-to-day working behaviours. Some steps have been successful such as gamification approaches  where fake phishing emails are sent out with prizes for those that accurately spot and report them (and education for those that click on the links).

The education approach can lead to best practices such as ‘Never click on a link in an email’ and ‘Never respond to an email asking for banking details’ as well as checking that URLs match the alleged email sender. Again, while necessary, the challenge is this is unlikely to be sufficient, in no small part because the time that users have to spend on checking is limited - so making them deal with increasingly warnings and difficult tasks (like hovering over every email link received) results in lost time, distraction, and fearfulness.

So how can employees best be equipped to manage the range of cyber security threats – for which their engagement is urgently required? To explore this one area that holds promise is the use of mental models.

The use of mental models to support cyber security

Rick Wash and Emilee Radar suggest that mental models are “simplified representation of reality that allows people to interact with the world".  They describe how a person reasons and makes inferences about a problem or situation, allow people to make predictions about what might happen, and provide simple rules of thumb and guidance to guide behaviours. These are helpful are they guide our understanding without necessarily being influenced by formal instruction or education: furthermore, they are often intuitive, we do not have to explicitly think about them.

This holds true in cybersecurity: users who have mental models of hackers as criminals are more likely to adopt stringent security practices compared to those who see them as mere nuisances. Another paper by Ruba Abu-Salma and colleagues looks at the way people understand the security properties of communications tools (such as WhatsApp, iMessage and Telegram). The paper emphasizes that non-experts often have an ego-centric mental models of cybersecurity, thinking that splitting information across various tools (like email, messaging apps, and social media) act as separate channels and on that basis are protected them from interception by an attacker. This can lead to them failing to to implement security measures (E2E encryption and digital signatures) across their channels actually making their communications more susceptible to breaches. By contrast, experts have a network-based mental model, understanding that all communication tools are interconnected within a larger network, recognising that there is no security benefit by splitting information across various tools. As a result of this (correct) mental model, experts are more likely to adopt and correctly configure advanced security technologies.

Perhaps it is no wonder then, as this paper suggests, that mental models appear to be shaped by fictional portrayals of computer security concepts and behaviours in films and media generally. It seems that incorrect or incomplete mental models are often based on these portrayals, leading to suboptimal outcomes such as believing security intrusions are always obvious, that hacking is inevitable, and that ordinary users are not important enough to be hacked. One example of this is the unplugging a computer to stop a hacker in the TV series NCIS led participants to believe (incorrectly) that this simple action is an effective solution for stopping cyberattacks.

Finally, an interesting study led by Karen Renaud explored children's vulnerability to dark patterns—deceptive techniques in websites and apps that trick users into actions they might not intend. The paper found that 11-12 year-old Scottish children are aware of online deception but often misinterpret benign warnings and fail to differentiate between various dark patterns and genuine alerts, leading to heightened suspicion and mistrust. The paper suggests that interventions should focus on improving children's comprehension of the characteristics and motivations behind these deceptive techniques to help them develop more accurate mental models, enhancing their ability to navigate online environments safely.

All of this suggests that encouraging the adoption of the ‘right’ mental models are helpful, offering shortcuts to facilitate understanding and emphasising the importance of embodying some behaviours and not others. So should we double down on storytelling and narrative as the means to support employee cybersecurity behaviours?

The limitations of mental models

Karen Cook and Russell Hardin suggest we need to be cautious about an over-reliance on narratives, arguing that stories can be manipulated to highlight specific aspects while omitting others. For example, a company might emphasize a single successful defence against a cyber-attack while ignoring multiple instances of breaches, creating a misleading sense of security.

In addition, narratives often rely on emotional appeal, which can overshadow rational analysis and lead to decisions driven more by emotional resonance than by factual evaluations. In cybersecurity, this could mean prioritizing high-profile, emotionally charged threats like ransomware attacks over more pervasive but less dramatic risks such as phishing.

Lastly, narratives often capture only a snapshot in time, which can lead to decisions based on outdated or incomplete information. This means that in cybersecurity, relying on a story about a past success in security protocols might overlook current vulnerabilities and evolving threats. Consequently, this could result in a false sense of security and complacency, leaving us unprepared for new and emerging risks.

Why we need relational trust

While Cook and Hardin critique the over-reliance in storytelling, more positively they make a case for relational trust. By this they mean that how we understand what and when to trust communication can be enhanced by having shared experiences which then leads to mutual reliability – and it is through this that we have a verifiable basis for trust.

In the context of cybersecurity, this means building ‘trust networks’ through regular communication and transparency, having regular meetings and communication channels between departments and security teams for a consistent and reliable flow of information. The point is that when employees have a strong network of trusted contacts within and outside the organization, they can better assess the legitimacy of communications.

To understand how this works we can draw on a study, again by Rick Wash, that looks at the way experts identified phishing emails. This involved a three-stage process:

• First, they engage in sensemaking, using their expertise to notice discrepancies within the email's context, triggering a cognitive shift, making them suspicious.

• This prompts a second stage of and investigating further by, for example, hovering over the URL to check its legitimacy.

• Finally, they decide on the email's authenticity and take appropriate action, such as deleting or reporting it.

The point here is that focusing on discrepancies (the second stage above) is not enough; Angela Sasse argues that this approach is misguided and that the time users have to spend on checking is limited and making them deal with increasingly warnings and difficult tasks (like hovering over every email link received) results in lost time, distraction, and fearfulness.

Instead, users must shift their understanding of the email's context to identify a potential problem. For example, in the research study, the participant in the study reports how their organization doesn’t typically send business emails outside of business hours (for an email asking to update benefits information). Another raised the alarm as an email didn’t have the usual full, long signature, which is standard practice for their organization. One person got an email from someone who worked down the corridor which he considered odd as she never emailed him, and the company culture was to personalize emails and this email wasn’t personalized.

We can see these all of examples of relational trust that we have of the organisation we work in, and an important element of helping people to recognize discrepancies.

Reducing the pressure on the employee

Whilst a lot of work had been done to enhance the capability of the workforce to spot and prevent cyber-crime, maintaining vigilance is challenging with what can seem at times an unreasonable level of requirement on the individual employee.

An alternative approach to cybersecurity has been emerging called Zero Trust that, in part, shifts the focus away from individual employees as the frontline of cybersecurity vigilance. This approach proposes organizations should not automatically trust anything either inside or outside their perimeters and must verify everything trying to connect to their systems before granting access. As such there is a need for continuous monitoring and validation of users and devices, with rigorous authentication mechanisms, assuming that no user or device, whether inside or outside the network perimeter, should be trusted without verification.

For the employee this means continuous verification (ongoing authentication that the users are who they say they are), least-privilege access (providing minimal necessary permissions to access data and systems), and micro-segmentation (isolating network segments to limit impact of security breaches).  

Zero trust approach reduces the risk profile for the business by lowering the 'attack surface', which is the total number of entry points and vulnerabilities that can be exploited by attackers, and the 'blast radius', which is the potential extent of damage or impact that can occur if a security breach happens, by implementing strict access controls, continuous monitoring, and segmentation of network and systems.

Of course, Zero Trust is not immune from cybercrime which can move from phishing to verification fraud so the challenge moves to maintaining user trust in legitimate verification processes while educating them to recognize and avoid fake ones. And increasing the number of verification steps can lead to ‘security fatigue’, causing users to become desensitized to security prompts and potentially respond without due diligence. Organizations must balance the need for robust security with the risk of overwhelming users, which can lead to lapses in judgment.

The need for a wider organisational perspective

There is a danger that cybersecurity is seen is the domain of the IT department, albeit with support from disciplines such as behavioural scientists to understand employee behaviour in this regard. However, the emerging area of Cyber Security Governance recommends security is aligned with strategic objectives to ensure that risks are managed most effectively.

The authors of this paper identify three key paradoxical tensions that need to be addressed for effective cybersecurity implementation:

• Institutionalization versus Professionalization: This tension is about whether security should be a part of everyone's job or handled by specialized security professionals. Effective cybersecurity means making security a daily responsibility for all employees, creating a strong security culture and reducing errors.

• Security versus Innovation: Balancing security with the need for innovation is crucial. Innovation requires flexibility and speed, but security measures can slow things down. Effective cybersecurity integrates security from the start, ensuring new technologies are secure without limiting creativity.

• Mindfulness versus Mindlessness: This tension involves balancing human oversight with automated processes. Automation is essential for managing threats quickly, but human judgment is needed for complex issues. Effective cybersecurity requires both automation and human involvement to maintain high security levels.

The business critical nature of cybersecurity risks alongside the need for wider cross-organisational engagement to deliver effective security means this is not something to be managed in a separate isolated way from the rest of the business. The challenges that come with this more holistic approach, will inevitably mean paradoxical tensions for which there needs to be effective governance and decision making.

In conclusion

There is no simple answer to the challenge of tackling cyber threats: fraudsters are becoming ever more sophisticated as AI based software is used for ever more tailored targeting. Cybercriminals now use AI tools to not only find details from social media and data breaches, but dynamically generate personalised messages that mimic individuals in convincing way.

On this basis, the degree to which we can rely on intuitive mental models that can guide our intuition of ‘rightness’ whether to spot fraudulent emails or verification systems will be something that need constant focus and attention. Strategies that support mental models and relational trust have a role to play; there are no silver bullets here and a range of approaches are needed by organisations.

But also technology systems such as Zero Trust that recognise there is a limitation to the degree that the vigilance of the workforce can (or indeed should) be relied upon to police the organisation against ever more sophisticated and nuanced cyberthreats. This is an issue that requires strategic organisational decision making, reflecting the challenges of navigating an increasingly complex world with evolving risks.

Many countries are considered to have a workplace productivity problem with some estimates suggest that workplace productivity growth has been relatively stagnant for about 40 years. Into the fray steps Generative AI (Gen AI), frequently considered a panacea for faltering productivity, or at the very least a helpful signal to investors that these companies at the forefront of technological adoption, deliver enhanced productivity. Indeed, startups that mention ‘AI’ attract up to 50 percent more investment than those that don’t.

But with all the promise that this suggests, how do we counter the finding that 70% of all organizational transformation initiatives fail to achieve the anticipated results. And specific to Gen AI, the finding that over two-thirds of business leaders in the US saying that AI integration either remains limited or is non-existent is clearly concerning for the productivity challenge.

Of course, it is clear that the successful adoption of any new tool within an organisation takes time: it is frequently suggested that effective deployment typically depends less on technological capability than on human flexibility and the ‘people factor’. This can mean concerns such as the fear of the unknown, with the uncertainty of change creating anxiety and loss of control where employees can feel a decline of autonomy over their working day.

While these are certainly key considerations for adoption, these sorts of concerns perhaps do not represent the full story: when an issue is characterised as being due to an apparent deficit on the part of the individuals involved, we often need to look harder.

With this in mind, we set out the way in which the modern organisation has a complex set of issues sitting behind the apparent gap between the promise of Gen AI and workplace adoption, what we are calling the ‘Digital Drag’.  The research we cover certainly suggests that responsibility for effective adoption of Gen AI and translation into productivity gains sits much more broadly across the organisation and not solely at the feet of the individual worker.

Reasons adoption of Gen AI can be tricky

Complexity²

As we have set out previously, the hierarchical structures of the traditional workplace, with their rigid command-and-control dynamics, are often poorly-suited to the complexities of the modern world. While these can be highly effective in environments that are relatively stable due to their clear chain of command, consistency in processes, and efficiency in decision-making, they can also be liabilities in today’s more precarious business environment. These systems, built for predictability, can translate into rigidity and slow pace of change - precisely the opposite of what todays unpredictable landscape calls for.  No surprise that occupational psychologists such as  John Amaechi are increasingly advocating for a shift towards more adaptive and decentralized models, reflecting a significant shift in thinking about organisational leadership.

But while decentralised models offer a real advantage to organisations through agility and responsiveness, it means that it can be harder to work out what is actually happening in an organisation. This is illustrated by the huge amount of questions and discussion about workplace trends where commentators attempt to make sense of confusing shifts in the workplace such ‘quiet quitting’ popularised on TikTok, where a user described it as “not outright quitting your job, but quitting the idea of going above and beyond.”  Another is quiet hiring, which is asking existing employees to take on new tasks as well as using contractors to fill in needs at companies that are struggling to find workers.

Note the use of the term ‘quiet’, perhaps suggesting how complex work structures means that much employee navigation of the organization is tacit rather than explicit. This means understanding unspoken rules, reading between the lines in communication, and knowing how to get things done within the unique context of the organization.

Add into this mix the way that GenAI arguably differs from traditional tools due to its open-ended nature, its ability to ‘learn’ and improve over time and the ongoing sense that new capabilities are likely to be available shortly. If we contrast this with other workplace tools, they (arguably) typically have more defined functions and capabilities as well as a longer lead time for changes or enhancements, then we can see that adoption of this complex tool into an equally complex work environment is no small feat.

No wonder then that in today’s more decentralised workplace it can take time for a less well defined tool to find its feet, being more dependant on the tacit, informal structures of the business to make change happen.

Also throw into this the way that people are acutely aware of the disruptive impact of AI not only on their nature of their work but also for their job security.

Will I keep my job?

One of the sometimes unspoken concerns that workers have in the adoption of new technology is that their livelihood can potentially be at risk.  And the media coverage of AI certainly encourages this understanding with Sam Altman, the CEO of OpenAI saying:

“Jobs are definitely going to go away, full stop”

And he is not alone: the International Monetary Fund says that 40 percent of the workers in the world have jobs that ​“will be affected by artificial intelligence.”  It is not simply the middle or lower spectrum workers that might be concerned - C-Suite execs tend to command high salaries, so there is financial incentive to consider how some of these functions could be undertaken by AI: indeed Polish drinks maker Dictador recently appointed a humanoid robot called Mika as its "experimental CEO."

Resistance in the workplace to technology adoption is nothing new; in the Nineteenth Century the Luddite movement famously involved textile workers challenging the manner in which new technology was leading to jobs and wages cuts. So perhaps no wonder that employeees may not be falling over themselves to look for ways in which their work can be done more cheaply and efficiently by a machine: the mantra may be that this frees up more time for more rewarding work, anda recent study found that 95% of workers see value in working with Gen AI, but approximately 60% are also concerned about job loss, stress and burnout. While almost all people appear to consider that Gen AI can offer value, has the argument really been won?

Value creation is by no means always certain

It is no secret within the workforce that there is a very live debate about the extent to which Gen AI will offer the degree of value versus the extent to which this is being hyped.  One example (and by no means isolated) is a recent article in the New York Times suggests the latter:

“The question (today) isn’t really whether AI is too smart and will take over the world. It’s whether AI is too stupid and unreliable to be useful. … It feels like … AI is not even close to living up to its hype. In my eyes, it’s looking less like an all-powerful being and more like a bad intern whose work is so unreliable that it’s often easier to do the task yourself. That realization has real implications for the way we, our employers and our government should deal with Silicon Valley’s latest dazzling new, new thing.”

Added to this are the questions concerning the business model of Gen AI with Peter Cappelli, a management professor at the University of Pennsylvania Wharton School suggesting that overall, generative AI and LLMs may create more work for people than alleviate tasks. They can be complicated to implement, and “it turns out there are many things generative AI could do that we don’t really need doing.” In other words, if the infrastructural costs of offering Gen AI outweigh the business value that is accrued by organisations (and therefore the amount they are willing to pay for it) then there is a question mark about its long term viability.

On this basis workers may be hedging their bets – is this something that they should be investing their time and energy in when there are more certain near-term ways in which they can enhance their work and careers?

What steps can be taken?

Recognise this is a marathon not a sprint

In Aesop's fable, a speedy hare mocks a slow-moving tortoise, who then challenges the hare to a race. Overconfident in their speed, the hare takes a nap during the race. Meanwhile, the tortoise continues at a steady pace and ultimately wins, demonstrating that perseverance and consistency can triumph over arrogance and haste.

With this in mind, while slow adoption or resistance may appear simply to be a self-centred concern for employment conditions, or anxiety about one’s ability to integrate into their work. However, people such as Thomas P. Hughes have pointed out that slow speed of adoption can also be seen as a crucial counterbalance to technological momentum, ensuring that technological advancements are thoughtfully integrated with consideration for effective use in the workplace. By slowing down the adoption process, it therefore perhaps allows for a more effective approach, ultimately leading to technologies that have more value and longevity. 

In line with this, philosopher of technology Andrew Feenberg advocates for a participatory approach, emphasising the importance of carefully including a wide range of voices in technological decision-making. This allows broader interests of the workplace to be met if it is developed and implemented in ways that enhance human capabilities, given that technology is a product of wider workforce choices and values.

And we can look at this in behavioural terms: Construal Level Theory suggests that at an early stage the understanding of Gen AI in its application to workplace challenges maybe generalized and simplified. People might underestimate the complexities involved because they are not yet dealing with the specific details and practicalities.

As the project progresses and people move closer to implementation, they increasingly need to address specific details such as integration with other workstreams, training for their teams, data security and privacy issues, security concerns, and so on. These concrete aspects often reveal unforeseen difficulties and obstacles. In other words, people start to see the ‘how’ – the specific steps, resources required, and potential roadblocks. This shift from abstract to concrete thinking can lead to ‘Digital Dragging,’ where the initial momentum slows down due to the recognition of these challenges.

Some care needs therefore to be taken when interpreting speed of adoption – not least as the complexity of workplaces and of the technology itself means that a more considered route may well be needed.

Encourage and empower the early adopters

So just how can organisations best approach the adoption of new technology and, in this case, of Gen AI? One useful route is via Lead User theory, developed by Eric von Hippel, which focuses on the role of advanced users in the development and diffusion of new technologies. These are people in the workplace that often face needs ahead of their peers and are positioned to benefit significantly from innovations that address those needs. This means they can be relied on to be champions of new technologies, and help ensure that the solutions developed are highly relevant and practically applicable.

Left to their own devices, Lead Users will often seek to develop their own solutions and can operate in a skunk works way, circumventing the usual governance processes of an organisation if they are found to be unhelpful. This means it is critical to accurately identify who the lead users are, recognising they are often not in formal leadership positions but possess deep practical knowledge and experience. Organisations need to create incentives for these lead users to actively participate in innovation processes, perhaps with recognition, additional resources, or career advancement opportunities.

But also, perhaps equally as importantly, while Lead Users are good at developing highly customized solutions, there is often a challenge of how to scale these innovations to the broader organization so they can be generalized and implemented across different departments.

Consider the wider organisational culture

A new book, Cultures of Growth, by  social psychologist Mary Murphy offers some guidance for ways to encourage Gen AI adoption in organisations (there is a great review of here book that we are drawing on here). The backdrop to the book is the work of her advisor, Carol Dweck whose book Mindset, sets out two ways people can conceive of themselves and their talents. Those with a fixed mindset consider that positive traits are inherent and immovable, in contrast to those with a growth mindset who tend to feel that good qualities can be developed over time through hard work, learning, and collaborating with others. The evidence seems to suggest that organisations that promote growth mindsets over fixed ones tend to do better in the form of happier, more empowered members who are more likely to come up with new ideas and collaborate well on projects.

In Cultures of Growth, Murphy suggests that any individual's self-image is shaped by their everyday environment so even if we try to maintain a growth mindset for ourselves, it will not be maintained if workplace culture is more oriented towards fixed mindset behaviours. With this, Murphy outlines two possible environments: in ‘Cultures of Genius,’ fixed mindsets dominate, and the focus is mainly on the contributions of star performers, who are considered inherently more skilled than the wider workforce. By contrast, in ‘Cultures of Growth,’ positive mindsets are supported more widely, with the assumption that anyone in the organisation, given the right resources and structures in place, has potential to contribute to success.

In an analysis of Fortune 500 businesses, Murphy found ‘Culture of Genius’ businesses are less adaptive and resilient, less inclined to take risks (as the price of failure is so high), and more likely to experience significant staff turnover. And worse, these organisations are also consistently associated with greater lapses in integrity and ethics. By contrast, ‘Culture of Growth’ businesses, "which embrace learn-it-alls over know-it-alls," have more satisfied employees who both collaborate and innovate better due to the growth mindset cultivated around them.

‘Growth’ businesses also tend to be more diverse than their ‘Genius’ counterparts, for example they tend to have more women on their board. This is in part due to ‘Cultures of Growth’ believe that good ideas come from everywhere and they value differences (cultural, economic, social)." ‘Cultures of Genius’ on the other hand, tend to have fixed ideas about who the best performers are – and focus on fixed (and often sexist and racist) notions of inherent worth, On this basis, ‘Genius’ companies fail to properly access the huge amount of talent, viewpoints, and ideas that a more diverse workforce can bring to the table.

From this we can clearly see the way that it is not enough to place the success or failure of adoption of Gen AI at the feet of individuals in the workforce – the organisational culture also needs to be addressed adoption is to be scaled from Lead Users to the wider workforce.

In conclusion

Understanding how to encourage the adoption of Gen AI in the workforce leads to a much broader discussion about the modern workplace.  As set out in the beginning, the pressures to enhance productivity through rapid adoption of new technology such as AI can lead to a narrow conceptualisation of the challenge, leading too much of the responsibility being placed at the feet of the employee.

But the workplace is one which is more complex, the tools more nuanced and multifaceted. How Gen AI is to be applied is not necessarily simple and requires careful consideration. And in the midst of this is the question of where to spend one’s time in challenging market conditions and uncertainty of the value Gen AI will deliver.

There is a long history of ‘Digital Dragging’ actually benefitting companies such as the introduction of Personal Computers during the 1980s when many employees continued to use typewriters and filing cabinets, on the basis that they found these were more reliable and easier to use. Whilst this minimal engagement with new systems slowed down the overall adoption process it was found, in hindsight, to reinforce the importance of better training and user-friendly interfaces to support the integration of personal computers in the workplace.

But more broadly, there is a growing body of evidence that we cannot rely on individuals alone, regardless of how brilliant they are, to be facilitating adoption. Instead, we need to be looking more carefully at the culture of the business and the extent to which this is working effectively, as it seems that to generate the much- sought-after increases in productivity, then we need a diverse set of employees who can both collaborate and innovate with a growth mindset cultivated around them.

‘Brand purpose’, the notion that there is a purpose beyond the reason a business exists beyond making a profit, has far reaching implications for businesses by reflecting its values, aiming to have an impact on society, and to contribute to the betterment of the world.  Most brands now have a purpose agenda aiming to make change across a wide range of issues that includes public health, environmental sustainability, education, gender and sexual equality – there is no shortage to the ways in which businesses aim for a positive impact on people, society and the planet.

Not only is this a moral cause but brand purpose is considered a critical commercial consideration for businesses to get right. In a recent poll of consumers globally, 62% want companies to take a stand on issues such as sustainability, transparency, and fair employment practices. Brands that fail to do have to suffer the commercial costs with 47% saying they would be less likely to place their business there, and 17% not coming back.

But more recently there have recently been dissenting views expressed on brand purpose. Unilever CEO Heinz Schumacher suggested it was becoming an 'unwelcome distraction' and impacting business results. He said that the company has been guilty of “force-fitting purpose in every brand”.  And some politicians go much further with, for example, Republican presidential candidate Vivek Ramaswamy, suggesting purpose (specifically that which is centred around Environment, Social and Governance concerns) poses the “single greatest threat” to capitalism and democracy. Elon Musk suspects a conspiracy “weaponized by phony social justice warriors” to bring harm upon free-market practices.

So just where are with this tricky topic and what, if anything, does behaviour science have to offer businesses seeking to navigate the complexity of politics, money making and social good?

The role of purpose

To understand what ‘purpose’ is and how it arises, we need to trace its roots back to the mid-20th century, where the ‘60’s and 70’s saw increasing concerns about environmental issues being reflected in the positions adopted by companies.  Alongside this there was a steady increase in government regulations for both environmental and consumer protections, forcing companies to be more accountable for their actions. Social justice movements also started to find their way into corporate policies, with brands starting to address issues of diversity and workplace equality.

Initially the corporate response was called Corporate Social Responsibility – reflecting the way in which businesses would take a philanthropic approach to these issues, supporting in a well-meaning but often limited way. While at the outset it was considered that the halo effect of good deeds were also good for business, it was only later in the ‘80’s and 90’s that there was a shift towards aligning CSR with business objectives – and was seen to more fundamentally drive business success.

The notion of brand purpose emerged in the 2000s, going beyond CSR by more thoroughly embedding a sense of purpose or a social mission into the core identity and function of a brand. This meant the marketing orientation, product proposition and other aspects such as supply chain are structured around the brand purpose objectives.

Enjoying the read? Please vote for us!

The purpose mandate

The commercial and reputational successes of brand purpose have inspired many organisations to pursue a purposeful strategy.  And not unreasonably, given the expectations placed on businesses: a recent Ipsos poll in the UK found that 50% agree, versus 18% who disagree, that “business leaders have a responsibility to speak out on social and political issues affecting my country.”

Ipsos polling in the US also found that the wider population consider brands often have as much responsibility as government to prove solutions to issues as diverse as poverty and social inequality, climate change, treating men and women equally and protecting religious freedoms.

And Ipsos’ Reputation Council members, made up of global communications leaders, also recognise a clear role for business in addressing political issues. 63% say business leaders are overtaking politicians as a force for progressive change in the world – up from 57% in 2019. But at the same time, 72% of them agree that too many organisations use the language of social purpose without committing to real change. Indeed, there have been accusations of ‘woke washing’ and in the UK there is a CMA investigation underway to assess the degree to which brands are guilty of making environmental claims that do not hold up under scrutiny. In other words, people expect businesses to ‘do the right thing’ and will seek to punish them if they fail to live up to the standard.

Authenticity

One of the challenges for brands is the dual motivates that are at play – on the one hand there is a mandate to make money, on the other there is the desire and requirement to engage in a wider purposeful agenda. Whilst these are not necessarily mutually exclusive (and most brand purpose narratives suggest they are not), the nature of the power imbalance between consumers and businesses would suggest we are then vulnerable to paranoid cognition where we can distrust companies’ motivations despite their best efforts to persuade us otherwise.

This is what makes ‘authenticity’ critical to overcoming consumer scepticism. Consumers may question the true motivation of purpose objective and accuse businesses of inauthenticity, believing their involvement in social issues is mainly a marketing ploy to sell more products.

To address this, one way in which brands can communicate their authenticity is through sacrifice – and a key means to do this is to demonstrate a willingness to support a cause and its target audience in particular even if this involves a risk to revenues.   One such example of a brand that did this is the razor brand Gillette. They used a purpose campaign to fight against the widespread stereotype of “toxic masculinity.” They challenged sexual harassment, toxic masculinity, bullying, and abusive behaviour, calling for men to hold themselves and others accountable for their actions. The film went viral on YouTube and generated both praise but also, importantly for our analysis, criticism. Indeed, the ad received almost 250,000 dislikes on YouTube and the brand faced backlash from thousands of men’s right activists across social media who vowed to the hashtag #BoycottGillette.

The impact on sales of these sorts of stands which can alienate some of the population is generally not known but nevertheless the signalling of the willingness to support a progressive position in the face of opposition suggests a ‘trustworthiness’ on the part of the company. In a marketing led world where it can be hard to unpick reality from spin, then this sort of signalling likely has real psychological cut through.

Managing the divide

The values expressed in a purpose campaign tend to align with progressive values, so it is of little surprise that those to the political right are less enthusiastic of these efforts. In fact, there have been attempts to organise boycotts of some brands on this basis, particularly in the US with the rallying cry of ‘go woke, go broke’. There is little evidence, however, if any, that these have to date had a great deal of impact.

But if we consider that we live in an era where the values we hold will be ever more important across walks of our life, then as psychologist Jonathan Haidt claims, it makes sense to better understand what he calls the Moral Foundations of our choices and leanings. We can see how can see how the different moral values he identified, likely align with consumer preferences for certain brands:

• Care/Harm: Consumers who prioritize care/harm may well be drawn to brands that demonstrate ethical and compassionate practices. An example is The Body Shop attracts with its commitment to cruelty-free and ethical products, highlighting a dedication to care for both animals and the environment.

• Fairness/Cheating: Those valuing fairness are attracted to brands that emphasize equitable and transparent practices. Ben & Jerry's, with its focus on social justice and equity, may well resonate with these consumers.

• Loyalty/Betrayal: People who value loyalty show a preference for brands that embody patriotism or community support. Iconic American brands like Ford and Levi's tap into this sentiment with their long-standing national heritage.

• Authority/Subversion: People who respect authority tend to favour established brands with a legacy. Rolex and Mercedes-Benz are prime examples, as they are not only established but also often endorsed by figures of authority.

• Sanctity/Degradation: Those sensitive to sanctity/degradation are drawn to brands that align with moral or religious beliefs, or that are perceived as pure and wholesome. Aveeno attracts consumers who value sanctity and purity in products, thanks to its emphasis on natural ingredients.

Whilst in many ways versions of these could appear relatively uncontroversial for many people, they could also quickly become problematic. Already, recent Ipsos polling in the US suggests very different opinions by political voting behaviour concerning a purposeful business agenda, as shown below. 

If we follow Haidt, then we can also see that we might move to a more nuanced position where there are not only challenges of whether businesses should have a purposeful position the different moral foundations that are reflected in the purpose activities could be more closely scrutinised. Haidt  suggests that the differing Moral Foundations held by opposing political parties helps to explain political polarisation, with each side struggling to understand how the other could prioritize such different values, resulting in an "us versus them" mentality.

This might seem a stretch but we can see other examples of issues where historically broad consensus quickly leading to polarised postions, as is the case with the recent controversy concerning the increase in the Ultra Low Emissions Zone in London to tackle air pollution. Discontent over the financial costs of this have morphed into a party-political debate due, some commentators suggest, to the electoral uplift that can be gained from activating the very different values underpinning either side of the debate.

Trying to dodge the debate is something that may be hard to do - people are increasingly alert to the ‘greenhushing’ trend, where companies keep quite about their sustainability achievements in an attempt to avoid some kind of backlash. It seems increasingly likely that it is hard for businesses to avoid taking, or being placed in, a political position.

Concluding thoughts

The brand purpose agenda is one where there has to date been a broad underpinning of support from different groups of the population and whilst we expect this to continue, by adopting a behavioural lens we can see that the landscape may well get more complex. Mapping this out will require using behavioural theories and frameworks covering fakes and authenticity, trustworthiness, and moral psychology.

It is also worth a few final reflections on the wider set of challenges that could be made of the brand purpose agenda using the lens of the ‘Frankfurt school’ a philosophical movement that offered a critical perspective on how mass-produced culture influences society.  

Applied to brand purpose, critics from this perspective could suggest that while the brand purpose activities might appear diverse, in fact they represent a narrow view of the political spectrum of ideas and debate and ultimately leads to a form of passive ‘clicktivism’ and a decline in critical thinking. The poster child for this is the Pepsi and the Kendall Jenner  where the model, in a protest setting, hands a Pepsi can to a police officer seemingly resolving the conflict. There was a great deal of criticism that this trivialized and commodified the serious issues surrounding police brutality and protest movements like Black Lives Matter.

With this in mind, we may see more pressure for more overtly political positions being adopted by businesses, rather than side-stepping this by talking about values. One example is Ben & Jerry's involvement in social justice initiatives, particularly their support for the Black Lives Matter movement. They provide detailed educational content on systemic racism, voting rights, and criminal justice reform. Additionally, they have taken concrete steps, including supporting relevant legislation and community projects, which demonstrates a genuine commitment to social change.

We may be on the cusp of an era where brands will need to not only be engaging behavioural science to unpack their purpose landscape, but also political scientists to examine the wide political considerations and implications.

Some of the acts of greatest bravery, creativity and inventiveness come from environments which are hostile and unpromising – take Pussy Riot, a Russian feminist protest punk rock group, have gained international attention for their opposition to Russian President Vladimir Putin. Or the way in which parts of Detroit, characterized by abandoned spaces due to economic decline and population loss have community members transforming these spaces into urban farms creating a vibrant urban farming movement. Or in the fact of economic collapse in Greece there has been a surprising growth in tech startups. Entrepreneurs, often facing limited job prospects have been creating vibrant tech scenes in economically blasted landscapes.

These activities will perhaps be of little surprise to readers of a book by anthropologist Anna Tsing called The Mushroom at the End of the World. In it, Tsing sets out the way that new complex, systems can not only survive but thrive in "blasted landscapes". It centres around the matsutake mushroom, which flourishes in seemingly unpromising cut-down forest landscapes, a metaphor to understand survival and success in precarious and ruined environments.

What can we make of this for the way in which businesses can operate in the difficult terrains we inhabit today?  And what are the ways behavioural science can help inform this? 

The blasted business landscape

What can we learn from this to understand the way in which businesses might succeed in the VUCA landscapes (volatile, uncertain, complex and ambiguous) we currently inhabit: The FT (hardly a publication known for its hyperbole on such matters) recently suggested that “the British economy is in a generation-long slough of despond, a slow-burning economic catastrophe. Real household disposable income per capita has barely increased for 15 years. This is not normal.”

If we go back in time and look for historical precedents, there is very little on this scale. Economic historians Nick Crafts and Terence Mills recently examined the growth in labour productivity over the very long run and the only period they find that is arguably worse than that we are now experiencing was 1760 to 1800. We are, it seems, indeed living in the blasted landscapes described by Anna Tsing

The past 15 years have been a disaster on a scale that previous generations of British economists could hardly have imagined with around 14.4 million people were living in poverty in 2021/2022. In terms of the business landscape, while some companies have seen a huge increase in profits, this is far from evenly spread. The Insolvency Service reported that 2,308 firms in England and Wales collapsed in August, which was 19% more than in August 2022 and higher than pre-pandemic levels. And it is not only small businesses either - corporate insolvencies increased by 71% from August 2021’s total of 1,347 and by 69% compared with pre-pandemic levels in August 2019 (1,365). One well known casualty is the retailer Wilko, which went into administration on 10 August ’23 and has subsequently collapsed with the loss of 12,500 jobs and 400 stores.

So what can businesses do?

It is against this harsh backdrop that we might turn to Tsing’s matsutake mushroom, to see if we can find possible routes for business survival and success in precarious and ‘ruined’ environments as she describes it.

There are certainly no shortage of commentators that consider businesses can, and indeed should, change. Many argue that hierarchical structures, with their rigid command-and-control dynamics, are increasingly obsolete and poorly-suited to the complexities of the modern world. Perhaps we can now see more clearly how traditional hierarchical corporate structures are highly effective in environments that are relatively stable due to their clear chain of command, consistency in processes, and efficiency in decision-making. These structures allow role specialization, controlled coordination, and effective risk management, making them suitable for scenarios where the landscape is known and predictable.

But the very characteristics that make them so well designed for these environments can also be liabilities in today’s more precarious business environment with the flip side of these systems built for predictability translate into rigidity and slow pace of change - precisely the opposite of what a blasted business landscape calls for. 

Indeed, occupational psychologists such as  John Amaechi are increasingly advocating for a shift towards more adaptive and decentralized models, reflecting a significant shift in thinking about organisational leadership.

The ADAPT approach

Much is talked about the way in which we are now living in a polycrisis environment – but of course many people have long lived in these sorts of harsh environments. Marginalized groups in society, often facing adversity and exclusion, have historically developed unique methods of self-organization and imagined alternative lifestyles that differ significantly from mainstream norms. This necessity to adapt and innovate outside conventional structures has fostered distinct, resilient communities with diverse perspectives and practices.

The expertise built in these communities offers insights on how to live in adverse environment that we can draw on to build business practices for this blasted landscape.  We have loosely organised these into an ADAPT framework, as set out below (note we use this to help organise but we strongly recommend exploring the original materials):

Agility - Queer theorist Judith Butler writes about the way that the very structures and boundaries that seek to enforce fixed, binary gender identities also enable resistance, subversion, and alternative configurations of gender that defy categorization. Through this, power and discourse are productive as they create new possibilities for reimagining identities and positions. If we apply this to business we can see that the possibilities for employees to push boundaries, creating modes of organization can surface through these very structures meant to rigidly contain them. Renegade groups can emerge, in a ‘skunkworks’ style, challenging status quo and rigid conventions of the organisation, to rapidly adapt to new emerging issues and opportunities.

Diversity – Black Feminism values listening to and uplifting marginalized voices within groups, what Patricia Hill Collins calls an "ethic of caring" whereby Black women practice empathy, express emotion, and understand personal uniqueness in others. As she writes:

"By using one another as sounding boards, Black women as sisters and friends affirm one another's humanity, specialness, and right to exist."

Following this Black feminist principle of seeing the basic humanity in every person, embracing an ethic of care means creating a workplace culture where people across all intersections of race, gender, sexuality, ability and socioeconomic class feel genuinely accepted, valued and supported. This can create environments that surface more perspectives allowing organisations to better interpret uncertain scenarios, solve complex dilemmas, and mitigate blind-spots that could lead to risk.

Alliance – Tanya Titchkosky writes that:

“We cannot understand disability without understanding the dynamics of working collectively and interdependently”.

This means embracing interdependence and forming coalitions across different groups who face the same concerns to jointly tackle issues of exclusion and oppression in society. Working in partnership bolsters capabilities and resilience to navigate risk and uncertainty.

Businesses can learn from this notion of ‘interconnected solidarity’ by constructing diverse business alliances as these have potential to facilitate innovation and manage risk through joint action - versus insularly relying on one dominant way of thinking. Activation for business then involves building strategic partnerships, ecosystems and alliances with other businesses, experts, and communities representing a diversity of backgrounds. This collective capability enhances resilience in addressing complex challenges.

Progressive Innovation – bell hooks writes that:

“Feminism demands flexibility, an open mind, and progressive innovation.”

This reflects hooks’ assertion that societal systems and structures have an embedded bias privileging male traits and experiences while positioning feminine preferences and needs as abnormal or niche.  If feminism were to only make incremental tweaks then given the power of existing male paradigms this would simply be assimilated rather than fundamentally reforming the dominant patriarchal models.

For businesses the lesson here is about boldly reimagining and reconstructing business practices and cultures to create more inclusive, equitable, and sustainable models. This is essential not just for gender parity but for driving the innovative and ethical business practices that needed in blasted landscapes.

Total Accessibility – Crip technoscience scholar Aimi Hamraie's view is that creating "accessible environments" by practicing "flexible designs and resourceful appropriations" enables diverse participation allowing marginalized groups to wholly engage.

This is a useful lesson for businesses as this approach means they can expand their market reach by catering to a broader audience, but also the challenge of universally accessible designs can inspire innovation. Of course, it also creates a more inclusive workplace, positioning the business to meet future market demands as population demographics evolve.

In conclusion

There is much that can be learnt from a careful reading of the bodies of knowledge for marginalised groups – after all if we are looking for inspiration for a world very different to that we are now in, are the current winners in the existing system really where we are going to learn from?

We have of course merely scratched the surface across many different bodies of knowledge as a provocation for finding inspiration on how organisations might succeed and even thrive in ‘blasted landscapes’.  In some ways this reflects the Nicolas Talib and his theory of ‘anti-fragile’. He suggests that businesses should in fact accept and even embrace volatility, risks, stressors, and disorder rather than try to minimize it.

The question is often what this actually looks like – how we should organise to this effect. Many social scientists are calling for a radical change to organisational structures towards more agile, decentralized, and flexible organizational models. But in doing so we would surely do well to reference the huge bodies of knowledge from longstanding marginalised groups as they have so clearly examined how to operate and reimagine the world from a position of very challenging circumstances.

One of the many disturbing claims coming from the UK’s COVID Inquiry being held currently is that there was hubris and over-confidence in the government’s pandemic response which led to a delay in considering approaches by other nations affected at the start of the crisis. Quite what impact this had is unclear but delaying lockdowns and being hesitant about other safety measures such as social distancing and mask wearing are considered to have contributed to many fatalities.

Of course, the COVID response is not the only place where hubristic leadership has been seen to have damaging effects. Eugene Sadler-Smith has noted that hubris in businesses has been implicated in the demise of Lehman Brothers and The Deep Water Horizon oil spill in the Gulf of Mexico (estimated cost $62bn) was been attributed, at least in part, to ‘corporate hubris’.

We live in a world where we assume that those in leadership positions, occupying prestigious professional roles are ‘exceptionally talented individuals’ who rightfully ‘command superstar incomes’. But does the behavioural science evidence really support this? And what do we need to know about leadership that means leads to hubris and over-confidence? What qualities should we look for in leaders?

These are critical questions for us given we live in an increasingly unpredictable and unstable world where we are all reliant on the quality of our leaders to be making the right decisions.

How concerned should we be?

Drawing on a paper by Marc Keuschnigg and colleagues there is evidence that we tend to assume that those at the top of their professions have exceptional talents – in other words, we tend to equate extreme skill with extreme success. But do the highest earners and those with the most prestigious jobs actually have the greatest minds?  This matters, argues Keuschnigg, for two reasons: first in all Western countries income distributions are hugely skewed with the 1% of earners earning 9% of the national income in Sweden and 20% in the US. In terms of any kind of notion of fairness, one would hope that this would be occupied by the most capable individuals. 

A second point that Keuschnigg makes is that “those with the most prestigious jobs wield the greatest economic and political power, and the intelligence of their decisions is consequential.” We can see this in the way that those with economic power shape media agendas such as celebrities the Kardashians, top football players, business leaders such as Elon Musk. They all set trends, fashions and their political statements shape media agendas.

Whilst Keuschnigg agrees that, on average, wages and occupational prestige increase in line with cognitive ability (there is a great deal of evidence for a broad correlation ), this does not hold true at the very upper end. Instead, two other things count: family resources and luck. The class and network advantages of those with elite family backgrounds are considered instrumental for gaining access to the most sought after and best paying jobs.

The authors show, for example, that having a breadwinner parent from the upper-middle class, as opposed to the working class, makes it 6.5 times more likely that one will enter into an elite occupation. Second, rich get richer processes are assumed to allow inequalities in job success to grow between those who got a lucky break early in their career and those that did not – the so called Matthew effect. This refers to the phrase from the New Testament Bible:

"For unto everyone that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath."

The suggestion is that it is these factors, rather than the relative ability of top earners that drives success. The reason this has not been empirically supported previously is due to data restrictions, as very high net worth individuals typically don’t participate in this type of research.

To overcome this, Marc Keuschnigg had access to something that is pretty rare: a comprehensive database of the cognitive ability of a population. They were able to access the Swedish database of 59,000 men taken as part of a men-only conscription for the Swedish army. The ability test includes verbal reasoning, technical comprehension, spatial ability and logic.

Upon analysing the data, Keuschnigg and the team found that the most able Swedish men can expect to make more money than the less able others. But the magnitude of the relationship is, at best, modest as the worst scoring men still earn more than one third of the salary of the best scoring men. Past a certain threshold having a higher wage is no longer telling of cognitive ability, it plateaus at high levels of occupational success both for wages (at about €60k) and at a similar level for job prestige (differences between doctors, lawyers, professors, judges MPS and accountants is unrelated to their cognitive abilities).

In other words, there was no evidence that those with top jobs that pay extraordinary wages are more deserving than those that earn half the wages in terms of cognitive ability.

Hubris

The challenge we have is that the narratives concerning capability are societally very potent – we live in world where the notion of meritocracy dominates: success is based on our own merit whether it be hard work or the skills we have got.

Perhaps this helps to explain why we all tend to consider ourselves ‘above average’ on positive characteristics. It is well known, for example, that a majority of people will rate their driving skills as above average. This so-called ‘better-than-average’ effect means we tend to attribute successful outcomes to our own actions and attribute failure to factors such as ‘bad luck’.

In a paper reviewing the research on hubris, Eugene Sadler-Smith and colleagues suggest the effect is compounded as CEOs’ estimates of their own (apparently extraordinary) abilities are often derived from comparisons to the population average (such as the ‘average’ manager) rather than the average CEO, resulting in base-rate neglect (i.e. with too little weight on the CEO base level). This, Sadler-Smith suggests, means that senior leaders are especially prone to overestimating both their own skill levels relative to others and the positivity of outcomes stemming from their personal decisions.

One way to understand hubris is the work of Nathan Hiller and Donald Hambrick and their theory of  hyper-core self-evaluation (Hyper-CSE) a term used to describe how individuals consider themselves in relation to their social context in terms of:

• self-efficacy: belief in one’s ability to achieve an objective,

• locus of control whether or not control over one’s destiny is controlled by internal or external factors,

• emotional stability: control over and levels of anxiety and stress,

• and self-esteem (perceptions of self-worth and self-acceptance).

Hiller and Hambrick consider hyper-CSE to be mainly shaped by inherited biological factors during early years, but then either reinforced or diminished by long-term feedback processes, as well as being subject to adjustments in the face of recent life events.

Those who have risen to senior executive levels in organisations are often overconfident and may be prone to hyper-CSE.  As Sadler-Smith points out, although hubris is considered a ‘dark-side’ trait of leaders (alongside narcissism and Machiavellianism), it can also exhibit a ‘bright’ side, enabling the bold pursuit of an ambitious vision.

For example, Tony Blair’s healthy leadership energy metamorphosed into a messianic manner manifesting as self-exaltation as in his description of the Labour Party’s 1997 election victory:

‘[we] had swept all before us, conquered with ease, strode out with abandon. Hadn’t we fought a great campaign? Hadn’t we impaled our enemies on our bayonet, like ripe fruit?’.

But all too often hubris means that legitimate leadership behaviours, tip into over-reach. For example, Sadler-Smith suggests that when Tesco was looking to grow its business internationally, the expansion into the US market with the ‘Fresh & Easy’ small format grocery store chain was quickly found to be based on overly ambitious and optimistic plans. Rather than taking a measured approach, Tesco set out to boldly create their operation from the ground up and pushed its own ‘Fresh & Easy’ branded products rather than ones familiar in the US. Not recognising their own limitations and actually understanding what would be wanted from customers is a clear example of hubristic over ambition.   It ended with the closure of the entire chain of 200 stores in 2013 at a cost to Tesco £1.2billion.

What can we do about this?

One of the challenges is arguably about nurturing the right type of intelligence for the unpredictable world we inhabit. An indicator of what this looks like comes from William Deresiewicz who criticizes elite education (which many of those in leadership positions have come from) for its emphasis on a linear type of intelligence. He argues that this educational style argues prioritizes conformity and a narrow focus on achievement and success in comparison to a more creative, holistic, and independent form of intelligence.

He considers that the type of elite which he saw the results of at Harvard, (where he was a Professor), rewards students for checking off boxes and achieving specific goals without necessarily fostering genuine intellectual curiosity or the ability to think critically. Instead, he champions a more creative form of intelligence that values independent thought, exploration, and a willingness to challenge conventional wisdom. He argues that elite education should encourage students to question assumptions, engage in deep and meaningful discussions, and develop a sense of purpose and meaning in their lives. This, he believes, is essential for cultivating individuals who are not just "excellent sheep" but are capable of contributing to society in meaningful and innovative ways.

Another person that reflects this general orientation is Scott Hartley who argues that individuals with a background in the humanities and social sciences (the "Fuzzies") are crucial for the success of the tech industry (the "Techies").  He suggests that while technology and STEM (Science, Technology, Engineering, and Mathematics) skills are essential, they are incomplete without a foundation in the liberal arts. He also emphasizes the importance of critical thinking, creativity, communication, and empathy, which are nurtured through disciplines like philosophy, literature, history, and sociology.

This surely calls for a revised emphasis in the skill set of leaders than is traditionally offered, suggesting the need for a more rounded approach to ongoing professional development. This certainly chimes with people such as organisational psychologist John Amaechi who makes a strong case for introspection being key to compelling leadership and how that introspection helps builds stronger, more resilient teams

In conclusion

We need leaders that are able to operate effectively in a volatile, uncertain, complex and ambiguous world so their orientation to perceived and actual risk is critical. Hubristic CEOs are more prone to risk-taking behaviours, as hubris tends to warp the leader’s recognition of the possibility success and failure to such an extent the likelihood of success is significantly overestimated. Hubris also leads to overstating the perceived potential of the gain whilst downplaying the investment needed for the implementation of ambitious plans.

But it is not simply a matter of reining in a hubristic individual:  in a study of over 2,790 manufacturing firms in China, Jiatao Li and Yi Tang found that CEO hubris and risk taking was strongest when (among other factors) the firm faced complex but favourable conditions, had less inertia (as in the case of younger firms). They concluded that a firm which allows too much discretion to a hubristic CEO may be prone to undue risk-taking and that it is important that firms have the necessary governance structures that are capable of monitoring and protecting firms from CEO hubris. Sadler-Smith suggests there are many examples of firms, including Vivendi, Enron, Tyco, World Com and Long Term Capital, whose boards failed in their governance function and exposed these businesses and their markets to the potentially damaging effects of CEO hubris.

Finally, there is plenty of evidence that successful leadership comes with a degree of humility: just as those at the pinnacle of their professions are not necessarily there by dint of their innate superiority, it is important to recognise that those at the other end of the spectrum are not there by virtue of their inferiority (or ‘lifestyle choice’). In a recent study by the New Leaf Project in Canada, the charitable organisation ‘Foundations for Social Change’ gave people who had been homeless for less than two years a one-time deposit of $7,500 in Canadian dollars (about US$5,600). They also received coaching and workshops about spending. Other groups received the money and workshops with no coaching, while some received the training but no cash and no resources at all. The study found that those who got the cash secured enough housing on their own to save the government $8,277 (about US$6,150) per person. Even subtracting the initial payment, the program came out ahead with a net savings of $777 (close to US$580) per person.

This reflects the work of Mullainathan and Shafir emphasize that individuals facing financial constraints frequently demonstrate remarkable skill and intelligence in making intricate trade-offs. As the authors of Sendhil Mullainathan and Eldar Shafir write in their book ‘Scarcity: Why Having Too Little Means So Much’:

"Scarcity demands that we be more skilled at making choices."

One of the key considerations of successful leadership may therefore be to recognise the skills and capabilities of the wider workforce as they may in fact have the skillset needed to navigate the complex, unpredictable world where resources needed for success are increasingly scarce.

We live in a world of ‘wicked problems’, where the big societal challenges we face are complex, their resolution unpredictable and, crucially, there is no single right answer.  So just how do brands, with purpose as core to their missions, operate in this space?

In particular, government has set net-zero targets industry with the understanding that industry will be a key driver of societal change and yet a relatively recent report found that only 10% of banks (the subject of the report) manage these risks comprehensively and take a long-term strategic view of the risks. 

Just what does a good strategy look like?  Received wisdom suggests a triple bottom line, measuring the financial, social, and environmental performance of a company over time. But some commentators are arguing that a more radical approach needs to be adopted; in an environment which is so unpredictable and uncertain, is measurement really viable and indeed are there certain advantages to lowering the priority that measurement has in this space?

We argue there is in fact an interesting behavioural case to be made that brands can enhance their trustworthiness by focusing less on measurement for social outcomes and supporting a ‘polycentric approach’ of decentralised, individual and community decision-making to deliver social good.

The context

Firms are increasingly attempting to manage rolling crises whether climate change, technology disruption to their business or, more recently, COVID (and other pandemics that are threatening to follow).  Added to this, the purpose of companies has been changing to not only generate profits for the benefit of shareholders but also to have a bigger role to play in society which comes with a requirement to engage in a range of complex issues.

To this end, concepts like VUCA (for something that is Volatile, Uncertain, Complex and Ambiguous), wicked problems (for which no known solution exists) and ‘polycrisis’ are entering the business vocabulary.  These seem to call for a very different sort of approach as these complex challenges they describe are not only rarely solved but tend to have multiple stakeholders who frequently have different views of both the problem and the solution. This requires leadership which is best demonstrated as asking intelligent questions, weighing up options, gathering information, and getting to grips with complexity. 

In fact, the term ‘wicked problem’ was adopted as a management concept by Keith Grint who argues that the ability to deal with this type of problem is at the heart of the ability to be an effective leader.  Of course, one of the biggest challenges is first recognising that problems are wicked, ill-defined and open-ended and that you don’t necessarily address them by trying to reduce them to predictable, clearly-bounded, and what we might call ‘tame’ problems.  The danger of attempting to simplify the problems and decisions means we can easily make misguided decisions: it is better to look at all the issues and embrace the complexity.

But what does good leadership look like? The starting point is often to set out a programme of measurement to guide activity.

The lure of measurement

But this raises a problem – measurement of wicked VUCA style problems are inherently harder to measure. So how does this square with one of the most famous mantras of business from Peter Drucker that “[only] what gets measured, gets managed.”

In many ways this makes absolute sense – how would we otherwise determine what works, how to invest resources and so on? The challenge though, as COVID showed us, is that we are in a period of radical novelty and uncertainty that, in the words of science historian Lorraine Daston, means we are “like a squid obscuring itself in ink”.

We cannot see what this new world means for us, but we are nevertheless renegotiating how to live in it.  The world of Peter Druker where we can be confident of what to measure, and why, seems to be a distant memory. 

And, of course, measurement of social value outcomes has simply never been easy.  Indeed, Professor Geoff Mulgan suggests there are four unavoidable complexities that bedevil the measurement of social value.

• The first is the lack of hard-and-fast laws and regularities in the social field so that very few areas of policy and strategy making allow precise predictions about what causes will lead to what effects.

• A second reason is that measuring social value is hard as people do not agree what the desired outcome should be. For example, many people want to imprison criminals to punish them, even when incarceration costs more and confers fewer benefits than do alternatives to prison. Philosophers have long recognized that societies are made up of competing and conflicting systems of valuation and justification. But, Mulgan suggests, measurers of social value have often tried to deny this.

• Even without these concerns, many social value metrics are inherently unreliable. Measurements of social return on investment (SROI), for example, often quite arbitrarily estimate costs and paybacks, which dramatically affects the final calculated value. Whilst SROI calculations may help in broad-stroke predictions, they can’t help with finer-grained decisions.

• Finally, measuring social value is difficult due to the problem of time—estimating how much good an action will bring about many years in the future, relative to how much it will cost to implement it now. Much can happen between the start of a social initiative and the eventual delivery date meaning that it can be difficult to determine the best course of action by measurement alone.

So the issue of measurement of these complex social outcomes is by no means a straightforward process.

The case for polycentrism

And yet it seems we are in polycrisis world with a business culture that all too often fetishizes measurement for a set of issues that are inherently hard to measure. This creates a challenge, as stated by World Economic Forum:

“as traditional policy development processes lag behind the rapid pace of technology innovation, citizens increasingly expect the private sector and other non-government entities to take on new responsibilities and develop new approaches to support the diversification and speed of governance”.

They suggest that organisations are in danger of suffering from a structural lag where their internal ‘time signatures’ are out of sync with the external pace of change. But what else can an organisation do? One answer comes from ‘The Bloomington School’, which advances the concept of ‘polycentrism’, reflecting a dissatisfaction with exclusively monocentric ‘top-down’ approaches to governance.

The Bloomington School highlights the ‘human capacity for self-governance’, suggesting there is rarely a single ‘best solution’ to wicked problems, but there is a role that decentralised, individual and community decision-making can have in determining a more cohesive and resilience way forward.

This means that rather than a group of detached analysts presuming what is in citizens’ interests, it is more helpful to engage them to understood how they themselves understand their environment, needs and options, and how they chose to act. In other words, we need to stop assuming that people are not able to reflect and act but that in fact we all have a great deal of capacity for agile problem solving.

Clearly this is much harder to control but also difficult to measure: if responsibility has been devolved identifying what is being done let alone what is measured is challenging.

Polycentrism and trustworthiness

As such, while a polycentric approach seems sensible and reflects many of the points we have made previously about ‘from me to we’, it does require a potentially seismic shift for businesses.  No longer is measurement being used to guide activity in the same way but, in its place, we are using trust as we are conferring people (both inside and outside the organisation) with the capability to enact decisions locally. This suggests a space in which there is an absence of data and measurement – if we were able to measure, then we do not need trust which is there to bridge the unknown. 

A polycentric approach to social value involves deprioritising measurement which, of course, creates anxiety but may in fact have reputational value for brands.  The reason for this is that when we trust people we are not just signalling how we think another will act but also how they should act, and this is critical. Because when we talk about generating trust, what we really want is trust that is ‘well deserved’. As philosopher Onora O’Neill points out, what we are seeking is not more trust but more trustworthiness.

Rhea Karuturi suggests that to answer the question of how to increase trustworthiness, we need to rely on a theory of ‘therapeutic trust’ where the act of being trusted can make a person more trustworthy. A good example is parents trusting their children to carry out certain chores at home— in entrusting the task to them they are teaching them how to become trustworthy as well.

Phillip Pettit captured this in his paper “The Cunning of Trust” suggesting that when we trust another person, we signal that we hold them in esteem, and that they will act to honour that trust. The social contract encourages people who are trusted to behave in a more trustworthy manner because they are “compelled by the force of norms” or by the force of social constraints.

While the act of placing trust in people means they are more likely to be trustworthy, there is also a virtuous advantage for brands who are similarly seen as more trustworthy themselves for this investment.  For example, retailers with generous ‘no questions asked’ returns policy are an example of the way in which trust is placed in the hands of customers to not abuse the policy. Of course, while some abuse in inevitable, we suggest that the majority of people feel the pressure to act in a trustworthy way because of the trust that has been placed in them.

Conclusions

In 2020, governments were forced to make a series of decisions in a short period of time—with limited information— compared with prior crises. As Radical Intimacy, writer Sophie K Rosa pointed out, this era meant that there was little choice but to trust people to self-organise and find solutions to a range of pressing challenges. As we discussed last week, was a huge amount of successful ‘polycentric activity’  included getting to know our neighbours better, grass-roots development of community led food co-ops, collaborative home schooling and the proliferation of WhatsApp groups to co-ordinate delivery of provisions to people isolating and to ask for, or offer, other kinds of support. 

Alongside this, it has long been understood that while metrics have huge value to guide business activity, surely in a complex world we cannot cling onto them in quite the same way.  Indeed the classic book by Jerry Muller (and a great read) ‘The Tyranny of Metrics’.  Muller argues that while metrics can provide valuable information, they often oversimplify complex realities and lead to unintended negative consequences.

Rethinking metrics in the context of brands and their social value activity is not simply a matter of losing something that would otherwise be helpful. Instead, we can argue that it offers us an opportunity to try a different form of approach that has the potential for a much higher return, both for society at large but also for organisations that are willing to take this less trodden path. 

And to drive the much-needed change we are seeking, a polycentric approach is surely an interesting consideration for brand and sustainability strategists.

We often talk about the importance of trust and the way in which this is so central to policy making and marketing.  But while we can see the value of trust, we argue that the onus also needs to be placed just as firmly on the more powerful party (such as brands, government institutions, employers) and not only the less powerful (such as consumers, citizens, employees): so we move from a focus on ‘trust’ to one on ‘trustworthiness’.

Flipping the focus in this way is helpful as trust is not an ‘ingredient’ of people but is a relational property that exists between us, not within us.  And as any good social scientist will tell you, relations are typically mediated by power which can give rise to questions of trustworthiness.  Given that it goes without saying that institutions are inevitably much more powerful that the individual, what does this imbalance mean for trust building? 

The power imbalance

If one party holds power over another, then does the powerful side really need to take the other’s sides interests into account?  If, for example, a company is the clear market leader and offers a product or service that others are not matching, then they may be less inclined to be concerned about maintaining trust. 

As political scientist Russell Hardin pointed out, trust does not apply in a relationship where someone is holding a gun to my head as I will inevitably have to fall into line and act according to demands that have been set out.  In these situations, the dominant party may renege on their stated or implicit commitments – customer service may decline, prices may rise, quality can suffer and so on.  We do not need to think too hard of brands that have done just this from a dominant market position.

Of course, even though brands may hold a dominant market position, they still may seek trust for a variety of reasons.  First, of course they may be committed to operating in an ethical way with a strong moral compass. Second, perhaps less altruistically, there may also be regulatory and reputational reasons why they need to demonstrate that their customers trust them.  And of course, thirdly, other providers may start to appear and in a position that people feel they cannot trust the dominant brand, people may choose to take up the alternative proposal.

Managing the power imbalance

But if the brand is in such a powerful position that we feel any complaints we have may not be properly attended to, why should we trust it?  In these circumstances it may be less about what a company does or does not do – and more about the perception that any commitment given may simply not be credible. 

We can see how the power imbalance means that the question about what trust is and how we build it (or lose it) moves from the individual (and what the mechanisms are by which individuals build or lose trust) and towards the institution (how they need to act to build trustworthiness).

This is quite similar to what happens in everyday life:  if one friend, Alex, is more socially attractive than the other, Kai, and values the relationship less, Alex can simply get away with things as Kai has fewer options (other than to end the relationship which Kai may not want to do). In this way, Alex can act in a less trustworthy way with impunity and Kai only trusts Alex on a small number of things while Alex is able to trust Kai to be reliable on a wide range of issues.

So, what happens in these circumstances? Two options are available: first, the more powerful Alex can stop reneging on arrangements and turn up as promised and as such establish a reputation for acting as promised.  Doing what you say you are going to do is therefore particularly important in situations of imbalance:  reputation is critical. But, of course, there will always be temptations to renege – if an enticing invite comes in then Alex may find it hard to stick to the arrangements. And in the case of the brand, if the share price is faltering, then it may well be tempting to cut customer service or quality standards.

The inevitability of mistrust?

This example offers some important lessons.  First, where there are asymmetries of power then it is by no means a given that trust will be present and, in fact, it is very easy for distrust to arise.  Our most attractive option as the less powerful party may in fact be to abuse the more powerful party’s trust: if we consider they are so powerful that our interests will not be taken into account, then we may decide to simply take advantage of them and only co-operate if we have to.

Of course, life is often not this simple, as we can never be sure of what the power imbalances actually are: we can never really be sure what the other party will do, and whether or not they will bother with our complaints. But in these circumstances, research on paranoid cognition suggests that less powerful actors will often construe the more powerful actors intentions in the worst possible light. Which means that even if the more powerful party genuinely wants to behave in a trustworthy manner, they may well often have difficulty persuading the less powerful of their good intentions.  Research suggests that in these circumstances, even flattery can activate suspicion of ulterior motives.

The claims of the more powerful party may be authentic but the less powerful party may simply struggle to believe them and as such have no little vested interest in being trustworthy themselves.  Disparities of power can easily give rise to mutual distrust. So how do we find a way out of this? 

Solutions for building trust

If power therefore sits at the heart of many of today’s challenges about trust then we need to consider how to address the power imbalance. In the late 1950’s social psychologists John French and Bertram Raven published a seminal paper on social power, titled ‘The bases of social power’. They initially proposed five bases of social power, later adding a sixth.  These are:

• Reward Power: Using rewards to influence compliance and the desired behaviour

• Coercive Power: Using punishments and threats to influence the desired behaviour evoking a sufficient degree of fear

• Legitimate Power: When an authoritative figure and is perceived to have a formal right to make demands and give out directions to others.

• Referent Power: When a person or institution is considered to be charismatic and admirable, allowing them to influence the behaviour of a target group or individual.

• Expert Power: When a person or institution is deemed trustworthy because they are considered to be an expert within a certain field.

• Informational power: This is used when a person or institution is able to influence the behaviour of others because of either i) their ability to access information, or ii) the possession of certain information which can be leveraged to make others comply.

We can then look at some of the activities that have been undertaken to address power imbalances with this in mind.  Informational Power has arguably been used by the UK’s financial regulator, the FCA, when they propose new rules to tackle greenwashing and the Consumer Duty regulations across financial services through reducing informational imbalances.  We could also see the way this applies to UK and the Food Standards Agency, ‘scores on the doors’ of showing the extent to which a restaurant complies with hygiene standards. A positive smiley denotes compliance, a negative smiley indicates discrepancies.

Another example of addressing power imbalances is through Referent Power via social media. For example, in 2020, L’Oréal Paris expressed support for Black Lives Matter in the wake of George Floyd’s death. Model Munroe Bergdorf challenged the brand, citing her 2017 firing over a Facebook post discussing white supremacy after the Charlottesville riots. This sparked a boycott, and promoted L’Oréal Paris’s brand president Delphine Viguier to take swift action, hiring Bergdorf to a diversity and inclusion advisory board, and donating $50,000 to a trans organisation and UK Black Pride. Viguier acknowledged the brand’s past shortcomings and took tangible steps to show they were working on being better. This shows the impact and opportunity of responding to Referent Power: while there was potential for a PR disaster, this was effectively turned around and in all likelihood the episode facilitated the building of trust through a demonstration of trustworthiness.

Conclusions

Building trust is all too often framed as building up levels in individuals (consumers, citizens, employees) so that they can be ‘more trusting’.  What also needs focus is the trustworthiness of the brand (or governmental institution, employer and so on).  And and understanding how trustworthiness may be hard to demonstrate if there is a large power imbalance. This suggests there is a case for brands (and other institutions) to think carefully about how to ‘earn trust’ by actions such as submitting themselves to scrutiny, being transparent in their behaviours and being mindful of (and swiftly acting on) feedback they get through social media and other channels. 

ChatGPT and the other versions of generative AI have upended technology markets in ways that seem to have taken many commentators by surprise. The media has been full of discussion of the possibilities, people have been talking to each other, trying it out, sharing what they found.  But why has this gained so much excitement when earlier versions did not seem to make all that much of an impression on the population? 

This is a question that lies at the heart of much head scratching when it comes to technology innovation: history is littered with examples of tech development that seem to often amazing leaps forwards but do not enjoy wider adoption.  And there are other cases where there is widespread adoption of something that involves very minor technology development.

Some have tried to create a science of technology evolution to explain this, placing the onus on the technology itself and the way in which has its own ‘natural’ patterns of progress. It can seem that this is the intuitive way we answer the question of technology progress: we start with the technology and then ask what aspects of it we like or find useful or are excited by.

The benefit of the time we are in right now is that we have an opportunity to see close-up what is happening and start to unpick the dynamics of this reaction to technology change. With this in mind, we suggest that there are benefits of turning 180 degrees from the technology itself, to look more closely at the other part of the equation: the user. 

Innovation from users (not just the tech)

Of course, staying close to the needs of users to drive innovation is not something especially new, there has long been enthusiasm for engaging people to co-create products and services reflects this orientation, with Lego as one example of a brand that successfully makes use of user-generated content. On the Lego Ideas platform, people are encouraged to share ideas for new sets. These ideas are voted on and the best ones can become official sets. In this way user-generated content can lead to a user-generated products. 

While this has much to recommend it, tapping into user-generated content can also be fraught with challenges, not least given the huge amount of content that is often created. Another way that users can be engaged to support innovation and the successful adoption of new products or services is through Lead-User Theory. This can help to identify users whose innovations are likely to succeed. These users are defined as those that 1) can see the benefits of a solution to meet their needs and 2) are ahead on an important trend in the marketplace.

Applying this thinking to the excitement around ChatGPT, we can see how the provision of open access encouraged engagement by Lead Users, whose reaction has made clear they perceive their needs are being met in a very tangible way by this solution.

There is a lesson here surely for organisations seeking to innovate – encourage Lead Users to engage early on and assess the degree to which there is take-up and engagement (or not). But this does begs the question of how these needs were created in the first place. 

The epistemic economy

That we have a drive to collectively orient ourselves to make sense of the world is something we have covered before:  we regularly cite the work of Sloman and Fernbach as well as Nick Chater and George Lowenstein with a recent paper that centres around this theme. But the way we are collectively responding to ChatGPT perhaps shows us more clearly and saliently how this ‘under-appreciated’ drive is operating.

We live in a world where it is often considered that we have a huge challenge in how we make sense of it. For example, the WHO set out how we are living in an infodemic, overwhelmed by huge amounts of information as a result of an ever more complex and confusing world. Hence, there is a need to try and navigate this ‘epistemic economy’ effectively, to make sense of and tame this complexity. 

We can see how we the notion of living in an infodemic shapes how we define our needs for sense-making.  There is plenty of evidence to indicate that concerns about information overload is a burden on now we feel with, for example, 73% of people wishing they could slow down the pace of their lives, 83% considering the world is changing too fast, underpinned by the way many people feel that technological progress is destroying their lives (61%)

We are familiar with the way we can locate knowledge in all sorts of online locations, from a more familiar web search yielding pages of links, online forums with lively discussions, to email newsletters and social media posts.  The salience of this promotes a sense of an epistemic environment that is unwieldy and out of control despite the fact that our local bookshop or library has long had more material on the topics we want to explore than we could ever likely assimilate.  But regardless of whether or not we really are in an epoch of information overload, people simply feel the anxiety of this more keenly and are ready for a means to fix it. 

From this we can then piece together how the ‘epistemic economy’ has reached a state of readiness for ways to address our collective concerns, to make our lives simpler, to offer a means to synthesise and make sense of all these different information strands without us having to do it all ourselves.

The degree to which current generative AI solutions offer solutions that are robust, accurate and representative of the range of evidence that is available is something that is the source of a huge amount of discussion.  We are limiting ourselves to an analysis of why there is so much discussion and engagement and this, we argue, points to the importance of growing concerns about the ‘epistemic economy’ shaping what we prioritise and how we react.

In conclusion

People such as political theorist Paolo Gerbaudo speculate that we are witnessing a moment of global transition of ideas, aligning with historical cycles in ideologies that take place every fifty years or so.   Kenneth Gergen  argues that social sciences need to reflect these shifts, not least because what was shaping behaviour decades ago is not what is shaping behaviour today.

We are collectively sense making not just of the information itself (ontological sense making) but also the mechanics of how we go about doing this (epistemological sense making).  We are collectively changing our orientations towards the knowledge tools we have, moving away from some (there is, for example, a decline in book reading, as well as newspapers)  as connecting us to others (such as the growth in online forums such as Reddit and messaging apps such as WhatsApp and Telegram). Behavioural science then is as much about unpacking and understanding culture and the mechanisms that underpin this collective sense-making activity, as it is looking at what is going on inside individual heads. 

Engaging people in the innovation process is key, through co-creation and Lead-User participation. But we also need to think more deeply about the wider cultural mechanisms that are shaping our needs and expectations of these research participants.

There is a great deal of concern about ‘washing’ across a wide variety of contexts: purpose, woke, green, rainbow and so on.  Indeed, regulators are starting to take a closer look, with the FCA planning to clamp down on ‘green washing’ specifically. They point out that there has been growth in the number of financial investment products marketed as ‘green’ and are concerned that exaggerated, misleading or unsubstantiated claims about green credentials damage confidence. The FCA is planning to take steps to ensure that consumers and firms can trust that products have the sustainability characteristics they claim to have.

The aims of course are laudable – but perhaps it is worth stepping back and using behavioural science as a lens to explore some of the challenges around this topic.  Through this we can see that the issues are not quite as straightforward as they might first appear. Indeed, posing the discussion as ‘washing’ frames it as a fairly narrow binary debate between accurate and inaccurate: an alternative perspective is one of people willing to engage in the complexities of the nuanced challenges of an increasingly uncertain world.

The origins of washing

If we consider something has been ‘washed’ then it suggests that we have in some way been deceived.   The origins of the -washing suffix date back to the 16th-century verb whitewash, which over time took on a metaphorical sense, associated with stopping people discovering the true facts about something.

The term greenwashing was first used by New York environmentalist Jay Westerveld in a 1986 essay about the hotel industry's practice of placing notices in bedrooms promoting reuse of towels to "save the environment". He argued that often little or no other effort toward reducing energy waste was made by hotels, whilst towel reuse saved them laundry costs. His concluded that real objective was not environmental concern but increased profit, hence the term greenwashing.

In some ways we could see this as a ‘say-do’ gap for businesses and other institutions – where what is said appears to be at odds with what is actually done.  But if we look a little closer at the issues then we can see some challenges with this narrow distinction. 

Is there a standard to judge?

If ‘washing’ is taking place then this assumes that what we are seeing is a form of fake, it is not the real thing.  Which then begs the question of what is the authentic standard of what is being washed, that we are being prevented from seeing. In some instances this is easily understood – for example when there is a clear case of wrong doing, as was the case in the cover up of vehicle emissions by Volkswagen with the group's chief executive at the time, Martin Winterkorn, saying his company had "broken the trust of our customers and the public”.

But in other cases, to what extent can we be confident that we know what the standard is that we are holding the organisation to account and how can we be sure that the organisation has fallen short?   Looking specifically at environmental sustainability, there are standards we can use to compare current practices, such as B-Corp, but of course, these are not without some degree of controversy with, for example, carbon off-setting being particularly contested ground.

One example of how it can be hard to know where the lines are drawn is the case of a British supermarket retailer that was accused of using fictional farm names, such as ‘Woodside Farms’ and ‘Boswell Farms’ on their products. This, it was claimed by some, was an attempt to mislead shoppers into believing that produce was sourced from small-scale producers.  When questioned, the retailer pointed to their interim results, pointing out that the brands continued to be popular with consumers despite this being widely reported.   Indeed, the retailer went on to suggest that all parties understand the concept is fake, meaning that the marketing activity was justified. 

So perhaps it is often not as straightforward as first appears: the “-washing’ prefix sets things up to suggest a binary opposition between ‘truth’ and ‘obfuscation’. As Patricia Kingori points out in a special edition journal on fakes in Africa, the claims made by religious leaders, scientists and traditional media outlets are not always taken at face value but are evaluated alongside other narratives for their authenticity.  This suggests that reality is not as straightforward given that the underlying truth is itself based on contested claims. And not only that, but the public recognises the nuanced nature of these lines.

A political debate?

Whilst ‘-washing’ can at times be a cover for clear malpractice, we could also see it as the means by which a ‘thinking society’ is having a political debate. To help us understand this we can look at the very topical example of the difficulties involved in unpicking this is the debate concerning the current World Cup. 

Placing itself right at the centre of the debate is beer manufacturer BrewDog that has declared itself the “proud anti-sponsor” of the football world cup, with a series of billboards protesting Qatar’s human rights record. The bill posters feature copy reading: ‘Proud anti-sponsor of the World F*Cup,’ ‘The Beautiful Shame,’ ‘Eat, Sleep, Bribe, Football’ and ‘First Russia, then Qatar. Can’t wait for North Korea.’

There has been substantial debate concerning this campaign with some suggesting it represents ‘inauthentic brand activism’ and points to the way the firm itself has faced accusations of a toxic workplace culture, as outlined in a BBC documentary. And while BrewDog plans to donate all profits made from its Lost Lager during the tournament to human rights charities, there have been challenges concerning BrewDog’s distribution deal in Qatar and their bars will be showing games in the UK.

So just how do we come a conclusion here concerning ‘purpose washing?’  On the one hand this could be seen a legitimate exercise in raising awareness of some critical issues and making a decent contribution to charities.  On the other hand it could be seen as a form of ‘washing’ in which societal concerns are used to ‘wash’ another agenda of promotion of the brand and enhanced sales.

A very different but perhaps more explicitly political example of ‘washing’ claims comes from Austria, whose government is to start a legal challenge to the European Union's decision to classify gas and nuclear energy as green and sustainable transitional energy sources. The country's climate protection minister, Leonore Gewessler said "Especially with the war waging in Ukraine, we can't have a greenwashing programme for investment in nuclear power and fossil gas,"

Whilst these cases appear very different, they are both surely drawing attention to the contested grounds of the debate, ones where there are few clear dividing lines here upon which it is possible to readily find agreement. 

This illustrates the point that it can be very difficult to be very confident of what it is that is being washed, or indeed whether washing has taken place.  These are political debates for which a range of views can legitimately be expressed. And, as journalist Anand Giridharadas recently put it:

“Politics is the inherently messy business of negotiating and reconciling incompatible interests and coming up with a decent plan, designed to be liked, but difficult to love.”

The psychology of being drawn to these debates

What is being ‘washed’ or not, what is fake and what is real, what is misinformation and what is the truth, are all questions that sit closely together and where a great deal of research activity is taking place.  What is starting to emerge is the way in which people engage with ‘fake news’ is more nuanced than might seem at first sight.  Examining this can help us to unpack some of the psychology of the debate around the very similar debate concerning ‘washing.’

A recent paper examines the social motives that drive people to share conspiracy theories, and devotes particular attention to the motive to generate social engagement, such as “likes” and reactions to social media posts. Specifically, the authors focused on how the motive to generate social feedback influences content sharing decisions. The research study found that people willingly trade off accuracy for social engagement and share material that they know to be of debateable veracity.

So we can see that people are drawn to being engaged on these matters – but perhaps we are not only generating ‘social engagement’ but we could also consider this to be ‘political engagement’.  Why is this?  Perhaps because the technocratic solutions here are not going to find a solution. Kingori puts it well when she suggests:

“The labels of authentic and original, as opposed to reproduction, fake and copy, refer to an idealised notion of a market that does not reflect how these markets function in everyday life.”

It seems that perhaps we can consider that much of this debate is about politically contested ground about which we will likely be drawn into, often in an animated and argumentative manner.

No wonder much of the discussion is also about motives of the organisation involved: such as whether are they intentionally misleading or doing so inadvertently?  And could they be doing more but choosing to do less?   Is the stated positioning one which places great virtue on certain sorts of behaviour whilst their actual behaviour suggests something less than this (even if their performance is better than others but who have lower stated standards?) All these are hard to identify and discern but they are all reasons why people look at the breadth of actions by organisations to understand their intentions.

The need for debate

Added to this, we are stepping into a world where the future is more uncertain than ever, Liquid Times as one commentator calls it.  As climate journalist David Wallace-Wells recently put it:

“…the likeliest futures still lie beyond thresholds long thought disastrous, marking a failure of global efforts to limit warming to “safe” levels. Through decades of only minimal action, we have squandered that opportunity. Perhaps even more concerning, the more we are learning about even relatively moderate levels of warming, the harsher and harder to navigate they seem.”

Wallace-Wells suggests the world we are entering is one of uncertainty and turmoil which calls into question many things about the world that have been taken for granted for generations. With this in mind, we surely need to get used to operating in a way that does not assume binary distinctions between ‘truth’ and ‘washing’ or between accuracy and fake.

Negotiating this world inevitably comes with risk, controversy and debate.  Indeed, the debate itself is no bad thing.  In another recent study (yet to be published), researchers JonRobert Tartaglione and Lee de-Wit showed participants data attributed to a "new immigration policy": they used different types of bar charts that illustrated the degree of polarisation between political parties. Most interestingly, they found that when no graph was shown, people were most likely to believe that the issues were most polarised in the general population, and even when the charts used a truncated vertical axis (which accentuated the degree of difference between those advocating and those opposing the policy) people were much less likely to consider the population to be polarised.

The point here is that open debate, while messy, allows people to engage in a way that is less polarising.  The alternative is that people stop engaging in the issue and instead adopt identity based positions, as set out in Dan Kahan’s identity-protective cognition framework.  When we adopt these positions, the focus moves from the subject matter to the way we see ourselves in relation to these topics.  We see then see ourselves in terms of our political or social identities and adopt arguing positions congruent with these rather than getting stuck into the messy world of political debate trying to negotiate and reconcile incompatible interests (see Rafia Zakaria’s book ‘Against White Feminism’ for a searing critique of the way in which identity can displace the focus away from the subject matter itself.)

Conclusions

Perhaps we have got used to more technocratic forms of governance of our political, cultural and commercial lives so it may be that we tend to see these debates as problematic. But debate is inevitable as the examples cited here illustrate the way that ‘washing’ debates often concern the negotiation of contested grounds.  Simply calling something ‘washing’ does not necessarily mean it is problematic fakery.  As Anne Merlan sets out in her book, Republic of Lies, these terms (e.g. conspiracy theories, fake news and by implication ‘washing’) can be appropriated and weaponised to serve particular agendas. These are often arguments where rhetoric is set against rational debate and can rapidly become very sophisticated.

Many organisations are engaged in a range of purposeful activities that seek to obtain positive outcomes across a range of social, cultural and environmental areas.  To what extent are these ‘washing’ activities designed for self-serving purposes versus acts that are intended to find new ways of doing business and operating in a changing world will always be something that is challenged and debated.

But it seems that there is a case, as BrewDog are doing, for bringing the wider population into this debate and recognising that the difficult conversations are perhaps a critical part of this activity. As we seek to navigate the uncertainty and turmoil of the changing world then surely it is better to have a robust and difficult conversation about these topics, than for people to be retreating into identity-based positions which likely leads to polarisation and little actual progress.

Much is written about the challenges of changing behaviour among the general public with regard to a range of purpose behaviours relating to sustainability, gender and ethnicity.  But have business decision makers been subject to the same scrutiny as consumers?  Of course businesses have a wide range of purpose objectives relating to these and other topic areas but just as there is a ‘say-do’ gap in consumers due to a range of pressures, then can we consider there is something similar going on for people working in organisations?

And while there is not the same level of data about business decision-maker say-do gaps as there is for consumers, it surely exists.  For example, one study from the financial services sector found asset managers were struggling to action sustainability issues with 43% of managers unable to provide an example of a sell decision driven by an ESG view in the last 12 months.

This is an important topic given the way that people frequently identify governments and brands as having responsibility to find solutions for issues such as sustainability.  Indeed, according to the US Energy Information Agency, industry is responsible for a greater degree of carbon output than consumer behaviour.   Their report suggested that industrial sector consumed more of the world’s energy (54.8%) than commercial (7%), transportation (25.5%) sectors with consumer behaviour accounting for 12.6%.

While the activity of firms represents a large amount of energy usage and thus carbon emissions, a relatively small number of people are responsible for the decision making (relative to the general population) perhaps making intervention targeting easier. Moreover, while business decision making is often seen as being logical and based on careful deliberation of information, more recently there has been a focus on how psychological factors shape business decision making. Indeed, much as cognitive processes, emotional and social influences all contribute to the say-do gaps that are seen in consumers, these same influences are coming to light for business decision makers as well.

Hence, this certainly makes a case for exploring what may result in a ‘say-do’ gap for business decision makers.  We discuss a number below:

Defensive decision making

One area that deserves some examination is that of defensive decision making.  Work on the way doctors make decisions on behalf of their patients is perhaps interesting here.  In an interesting study, Rocio Garcia-Retamero and Mirta Galesic asked eighty general medical practitioners to complete a questionnaire involving choices between a risky and a conservative treatment. One group of doctors made decisions for their patients. Another group of doctors predicted what their patients would decide for themselves. Finally, all doctors and patients made decisions for themselves and described the factors they thought influenced their decisions.

What they found was that doctors selected much more conservative medical treatments for their patients than for themselves. Most notably, they did so even when they accurately predicted that the patients would select riskier treatments. When asked about the reasons for their decisions, most doctors (93%) reported fear of legal consequences.

So we can see that experienced and highly trained professionals may not be making optimal decisions based purely on the information about each of the treatment options. Instead, there are a range of additional factors that come into their decision above beyond the immediate considerations of the treatment options. In this case the legal consequences were of concern, resulting in doctors selecting a more conservative treatment option. 

While this study concerned medical decision making, we can certainly see how this translates to other contexts resulting in business decision makers acting more conservatively and being reluctant to make shifts towards potentially risky options that bring about wider societal benefits.

Challenging decision environments

Business decision making does not take place in a vacuum of course, and as such there needs to be a careful consideration of the environments in which they are embedded, as these shape the nature of how a decision might unfold.  Bjorn Meder and colleagues developed a taxonomy of different types of environment in which decision making takes place which includes:

• Underprepared environments:  In this case there are simply not the facilities available to support effective decision making. For example, while some work has been done to scope out how business decisions can be made with a sustainability lens, this is arguably still under-developed. As such, when asked to make decisions with a ESG lens, there may be little clarity over how that decision should be made and on what criteria should be considered.

• Counteracting environments: This is when opposing forces in the environment can diminish or neutralize the effect of good intentions.  In business decision making the focus on costs and profitability take precedence and difficult to move away from. Hence, when a sustainability option is considered, but requires an added cost or may result in a reduction in profit, this can have a strong counteracting impact on the decision.

Understanding and classifying these different environmental considerations helps us to better recognise the constraints on delivering positive sustainability outcomes by business decision makers.

Group decision making effects

Decisions in organisations are rarely made by one individual independent of others.  As such, looking at the psychology of group decision making is useful to understand the sources of possible ‘say-do’ gaps. To explore this, we can draw on work done for the Institute and Faculty of Actuaries concerning pension trustee behaviours in firms.

For example, some research suggests that groups of people (such as committees or boards) make inferior decisions because they fail to capitalize on the differentiated knowledge of individual members. A meta-analysis by Li Lu and colleagues found that these effects can be quite large. Groups talked about information that they all had access to far more than individually offered information. So although larger groups should encourage more information sharing for individuals and subsequent group knowledge-building, the evidence seems to indicate that this may well not happen. 

In another study Roy Baumeister and colleagues found that decision making groups often treat cohesion as a critical goal, despite it often resulting in poor outcomes. Although cohesion may seem especially desirable when consensus is sought, it does not necessarily improve, and can in fact harm the quality of group decisions.

Overall, many decisions in organisations are taken as a group and whilst there are frequently cited benefits to making decisions in this way, the research literature is awash with examples of the ways that group context can have detrimental effects on decision making.

Social identity shaping outcomes

Dan Kahan’s identity-protective cognition framework makes a case for the way in which the cultural values we hold define our social identities – which in turn then shape our beliefs about disputed matters of fact (e.g., whether humans are responsible for climate change; whether the death penalty prevents murder).

This helps to explain why groups with different cultural outlooks (such as left or right of centre political orientation) disagree about important societal issues.  On this basis disagreement is not due to people failing to understand the science or even that they lack relevant information. Instead, according to Kahan, disagreement is generated from the way “people endorse whichever position reinforces their connection to others with whom they share important ties”.

With this in mind, the cultural identities of organisations can be very strong with people often identifying with the values of their employers:  indeed this is arguably one of the key elements of effective employee engagement.  Many people are adept at reading the cues of the tacit cultural identity of their organisation which may at times also be at odds with the stated noble corporate aspirations in place. 

Understanding the tacit as well as the desired cultural identities at play is therefore an important consideration as this will create a cascading impact on what values individuals hold and the way these shape and inform business decisions.

In conclusion

The area of organisational decision making is one that can be harder to access (more costly, logistically complex) and it can therefore escape scrutiny of the easier to research consumer decision making.  But nevertheless, as we have seen, there is a case to be made that this is a place where highly consequential decisions are made concerning a range of issues with wide societal implications. 

Understanding the social-psychological mechanisms that underpin business decision making offers a means by which tangible actions that can be taken to address the shortcomings and strive for enhanced outcomes.

Commercial organisations are increasingly adopting a purposeful mission, moving beyond the simple aim of making money to include reflecting a strong set of values to the world on a wide range of issues such as sustainability, LGBTQ+ and Diversity & Inclusion.  Not only are the organisations’ internal policies structured to reflect these values, but they are also used to shape customer products and services, as well as advertising communications.

As such, this effectively moves a brand from purely delivering on the stated outcomes, (such as the purveyor of food or household goods), to one that offers a physical manifestation of values, visibly promoting the principles that we may often consider most important. 

In a sense then we can see the way in which a brand can therefore potentially be part of what we might call a ritual – behaviours which have symbolic value beyond the everyday.  This is something that many organisations aspire to – the creation of rituals that embed behaviours, enhancing the brand’s ‘stickiness’ so people may be less likely to move to an alternative brand or product. 

On this basis, customers buying from brands which reflect their values, provides evidence of the behavioural commitment to values that we, and others in our group, consider important.  Borrowing from a paper by Daniel Stein and others, we can perhaps see the way that these behaviours can then become institutional norms (‘what people must do’)  and as such become deeply embedded in maintaining group values through:

• Promotion: visibly promoting values that the group often considers most sacred

• Protection:  as contributing to the stability and consistency of group values

• Perpetuate: helping to bring to mind ingroup values, fostering ingroup commitment and cooperation

There clearly seems much to applaud here but assessing the importance of this or evaluating the tangible benefits are to an organisation is not what is being discussed here – there is a lively debate in many other places.  The point is to highlight the new considerations that need be made in light of making ‘purpose’ a more central part of a brand’s strategy. We consider that consumers bring quite qualitatively different considerations to their decision making in relation to values than they may do in relation to a more simple choice between products.

But first we look at why values are taking such a centre stage at the moment.

A greater focus on values

Perhaps it is of little surprise that the values that are held by organisations has risen in prominence when we consider the way COVID has been propelling a more urgent consideration of our collective values.  Terror Management Theory (TMT) would surely suggest that the salience of death brought on by COVID-19 plays a key role in motivating people to focus on the values they hold as we wish to seeing ourselves as living a significant life. 

TMT suggests a consequence of our cognitive abilities as humans is the  awareness of the inevitability of death, giving rise to an existential terror. This terror is navigated by a buffering system consisting of a range of activities often relating to a more intense need for a shared cultural worldview leading to core shared values.  No wonder then that three-quarters of people in the UK say the pandemic has made them re-evaluate the most important aspects of their lives.

Of course, a key implication from here would be that that brands and other institutions need to develop an understanding of the social, cultural and political landscape that shapes the values people consider to be important.  These are as much navigated between us, as they are internalised within us, we are a collective ‘thinking society’ as Serge Moscovici called it. Embedding oneself into the ways in which these values form, ebb and flow therefore seems critical for organisations to understand how to engage and embed themselves within the values-based landscape.  

But in this values based landscape, we consider that there are some new considerations that marketers need to navigate.

A. Understand the unspoken associations

We do not of course all share the same values:  Dan Kahan, Professor of Law & Professor of Psychology at Yale Law School conducts research in this area, outlining the way that the cultural values we hold define our social identities – which in turn then shape our (often unspoken) beliefs about disputed matters of fact (e.g., whether humans are responsible for climate change; whether the death penalty prevents murder). 

He suggests that this helps to explain why groups with different cultural outlooks (such as left or right of centre political orientation) disagree about important societal issues.  On this basis disagreement is not due to people failing to understand the science or even that they lack relevant information. Instead, according to Kahan, disagreement is generated from the way “people endorse whichever position reinforces their connection to others with whom they share important ties”.

So the danger here for brands, is of course that their identification with one set of values is then seen as congruent with a raft of other beliefs that may not have been explicitly referenced – but which are bundled together by others.  So a brand may unwittingly be associated with a range of other causes and identities that places them in an out-group for unexpected sets of people. 

B. Brand behaviours are put under a moral spotlight

Another set of implications that need to be faced by brands when considering their purpose strategies is the way that values effectively constitute moral actions. Moral foundations theory proposes that moral intuitions are developed in part by their evolution within groups and cultures.

In particular, this theory suggests that there are innate moral “foundations” (e.g., care/harm, loyalty/ betrayal) on which morality is constructed within specific groups of the population. Of course, this then moves the brand into a fundamentally different space, that of a moral actor and as such will be judged by these moral standards. So what are the consequences of this?  Again borrowing from Stein et al we can see a number of considerations:

• any attempt to alter these values effectively compromise the customers sacred values, leading to moral outrage.  

• those who engage in moral transgressions are punished, with exclusion being a common consequence even when facing personal costs for doing so

• group values are often non-negotiable and sacred values, meaning that even well-intentioned or accidental alterations should elicit outrage and punishment

• the sacred values protection model posits that sacred values are insensitive to trade-offs which means that people will be readily angered by the notion that a sacred value has been compromised but also, importantly, relatively insensitive to the degree to which it was compromised  

This suggests that brands therefore need to be very careful in the way they operate, given that the consumer perception and response when based on considerations related to moral values may well be very different to those based on more familiar evaluation criteria (such as brand personality or pricing for example).

C. There may be greater vulnerability to misinformation / alternative narratives

Finally, there is a case to be made for the way in which alternative narratives may take centre-stage:  we have seen this in relation to a wide range of issues such as climate change and COVID: a brand’s purpose position and related activities may well be equally as vulnerable. 

Indeed, there is more margin for identifying possible discrepancies between a brand’s stated values and activities than there may have been in the past, when values were perhaps more implied, or hidden in vague ‘mission statements’ than explicitly stated. 

Related to this, there is increasing evidence that businesses are being targeted with Conspiracy Theories and disinformation, meaning that regardless of the accuracy of the any challenge, there is clearly potential for reputational damage.

In conclusion and how to navigate

All organisations have values whether explicitly stated or implied but the wider landscape may well mean that we expect organisations to more tangibly spell these out and then act in accordance with them.  We applaud this and whole heartedly welcome the way in which brands are seeking to align with what we see as positive values.

But to execute on this effectively we need to rethink how we operate. Values, as we have seen, are not something which are wholly understood through a focus on our individual psychological mechanisms.  We need to understand the way in which these are negotiated in a social, collective manner and how different values coalesce and what the expectations are for them to be associated with particular behaviours

As values operate more centre stage then smarter ways need to be found of engaging with their community of customers to reduce the divide between marketers and the wider population so that activities (products, solutions, information sharing, marketing communications etc) are developed to support people to make sense of the world and address concerns that they face.

This is a route that governments are familiar with: initiatives such as Citizens Assemblies are used to directly engage with a range of different citizens to hear what difficulties and challenges they are facing when presented with making sense of a particular issue.

We consider this would also help commercial organisations to get more closely connected to peoples’ very real concerns and understandings, using them to shape the development of purpose led strategies with the aim of helping people to make sense of how to participate in this changing world and working together to co-create products and services that more effectively drive positive outcomes.

Subscribe now

One of the topics that marketers and indeed policy makers often struggle with is how to price something.  Of course, if adopting cost-based pricing, it is a simple matter of working out how much something costs and then adding a mark-up to arrive at a price.  But it is not as easy as that:  pricing also needs to be informed by consumers’ willingness to pay which of course is not all that simple.

Value, in the eyes of the consumer, can be created through a range of means not just about what something costs to make – and the pricing strategy deployed in itself offers information that influences us.  For example, luxury goods are famously not discounted as this lowers the equity of the brand, which influences its value.  So, we can see how, in some situations at least, pricing has shared meanings that is over and above a simple calculation of a rational calculation of what offers ‘value for money’, but, instead, a more nuanced evaluation is at play. 

We can see the way in which pricing therefore needs to be understood from a variety of angles:  sometimes we may indeed be trying to avoid over-paying but at other times we may be looking for something that is ‘reassuringly expensive’, signalling to us, and those around us that the goods we are buying represent ‘good value’ and that we are of discerning tastes.

Looking through the literature on the behavioural science of pricing, it can be hard to see these different considerations consistently represented. Much seems to be made of the way in which presentation of pricing information can influence our judgement value. For example, In his TED-talk, Maciej Kraus gives an example of the way human ‘biases’ impact decision-making. He outlines how a coffee shop used to sell a small coffee priced at $3 and large coffee priced at $7 respectively. 87% of consumers preferred to have a small coffee while only 13% bought a large one. 

Then, applying the well-known ‘decoy effect’, a mid-sized option was introduced priced at $6. Following that, 74% of consumers started buying large coffee for $7 with only 26% remaining loyal to a small one.

This sort of information seems hugely useful.  But does that mean we can apply this to all situations at all times?  Inevitably not –we need to think a little more clearly about what sort of decision is being made when we are choosing to make a purchase and how the context of the decision impact the nature of the evaluation that takes place. 

To explain, it is clear that a very different decision is being made about buying a luxury bag than when we are buying a take-away coffee.  Or between fabric care and a new car.  Given that different considerations are at play, then we need to draw on different principles or theories. 

Four minds

One approach which seems to have value here is that of Ryan Hamilton and Uma Karmarkar who talk about the ‘4 Minds’ of the consumer.  The value of their approach is that it sets out broad categories of theories, describing four different approaches that customers could bring to bear on any particular decision:

• The Ideal Point Mind uses the customer’s perfect (hypothetical) option as the point of comparison for evaluating any option under consideration.  This is an entirely subjective type of evaluation built around an internal reference point.  In these situations the customer chooses the option that is closest to their mental ideal (e.g., dream home).

• The Market Comparison Mind relies on the evaluation of a range of individual attributes based on the customer’s experience or research.  The chosen option would be considered most attrative releative to what else is sold on the market place based around performance on the attributes the customer considers is important (e.g., digital camera).

• Local Comparison Mind evaluates options based around the set of options avaiable at that moment .  The evaluation point is external, based around what is on the shelf in front of the customer at that point in time (e.g., candy).

• The Image Mind also uses external reference point but is based around favourable impression or reputation, rather than what is directly on the shelf (e.g. bottled water).

We can plot these different minds therefore on two axes, as set out below:

Implications for pricing

Much of the time behavioural science operates as if it assumed the only mindset taking place is Local Comparison, making decisions ‘at the shelf’ such as the decoy effect, outlined earlier.

While this is part of the answer it is far from the full picture.  Each of these categories has quite different implications for pricing strategy, as set out below:

• Ideal point: This category has low levels of ‘price sensitivity’ as the decision is highly individualised and shaped by their own personal priorities and values.  Understanding what this ideal point is can be hard, as pricing point will be difficult to meet given the inevitable range of criteria on which any solution will potentially fall short on. 

• Market Comparison:  In this mindset people will typically focus on a relatively small number of features to evaluate different options.  Pricing will depend on the performance of the item based on these key features and their importance for the customer.  Setting price will be a function of understanding these calculations for different groups.

• Local Comparison:  As we have set out, this will be based on the items ‘on the shelf’ and the way people process information ‘in the moment’.  This is most relevant to low involvement items where choices are often made with little consideration.  Setting price requires a close examination of price points and pricing presentation (e.g., discounts) of other items available in the context where the decision is taking place.

• Image Mind:  Price sensitively will be driven by the reputation / favourability of the item – and as such, along with Ideal Point, it is much less price sensitive.  Setting pricing is a function of the positioning of brand relative to others on key image attributes.

Conclusions

So what do we do with this theoretical underpinning?  We can use it to understand what sort of ‘pricing game’ any particular item falls into.  Using some simple questioning we can assess which of the minds is in operation and should therefore shape the pricing strategy.

From this point we can then undertake research to identify the necessary information to inform strategy.  For example, we may well need some initial qualitative research around ‘Ideal Point’ evaluation to understand the way in which different groups may be thinking about and valuing different dimensions of the item.   While qualitative research will help to identify what these dimensions are, surveys can then help to quantify them.

Each of the mindsets has different research implications and consequences for the way to set pricing.  Following this, it is then possible to undertake testing of the different pricing options / price points and strategies to assess the potential opportunities for effecting behaviour change.