Richard Mathera is a Managing Director at Irrational Labs. He leads Irrational Labs’ healthcare practice and formerly led its financial decision-making work. Richard has overseen dozens of behavioral economics projects and experiments with commercial clients. Richard holds a Master’s degree from Columbia University’s School of International and Public Affairs, where he studied Advanced Policy and Economic Analysis and a Bachelor’s degree from the University of Virginia, where he studied economics, Spanish, and French, graduating Phi Beta Kappa.
In this episode of TechTalk Podcast, Brad Cost, Dr. Jay Greenstein, and Richard Mathera sit down to discuss:
How Irrational Labs creates behaviorally informed design for better products.
Top-bottom & bottom-up challenges of organizational changes (product & people).
Truly seeing the world in color by understanding behavior-driving issues and studies.
6:30 – The differences in culture. “One of the interesting things about working with these companies is that every single company culture is different, and you don't know what it's like until you get in there. You plan how these projects go. If we're going to deliver a redesigned product, flow or set of communications, it's always interesting to see the capability. How are they able to experiment? Is it something they can execute? Normally, you find that a lot of places are overconfident about how well they can do some of these experiments. It's fascinating to see how people work and engage in different environments. As behavioral scientists, we always say the environment really influences behavior. When you're working within a company, that is an environment, a culture, a way of doing things. It's interesting to see how different companies operate and think about leveraging insights from behavioral science. It's always fun, keeps things fresh and is interesting to learn.”
8:16 – The challenges of organizational changes. “The people who need to make the changes are often at the executive level. They have habits that have been formed over a long period of time and when you have habits, you don't actually think consciously about the way that you do things. You just do it. About 45% of our day is just habitual. When you're looking at a product, you can see how it works and present the psychologies that are most critical in determining a successful product. When looking at an organizational culture, let's examine an example: say we were asked to work with a large pharmaceutical company that had a lot of meetings. The insight is to create more slack, reduce the number of meetings, and increase more open space for people to think, but it's very hard because of the way that organizations run. The social norms are so important because it’s not only what you say you're doing, but also what you think other people are doing. If you say, as an organization, we're going to change, but my perception is that the CEO and executive team are doing the exact same thing that they've always done, it almost doesn't matter. These social norms are so powerful. Organizational change projects are harder than working on the products themselves.”
10:26 – Behavior/culture change versus product change. “I would say we do about 90% product and marketing, like onboarding or getting new patients/users. 10% is more on the organizational change, like impacting culture or doing things on the inside of the company.”
13:53 – Harder in the real world. “A key takeaway of working in applied behavioral science and product design is that a lot of the product changes we make that are the most impactful and have the biggest shifts are often the hardest to quantify rigorously. We've built features that have helped people earn more money. We've built features that help people make preventative healthcare appointments. When you're in an academic lab, it's so easy to test things and say, here's A, here's B, here's the increase, but when you're in the real world, it's a little bit harder to test.”
15:50 – Suffering from human biases. “We were recently working with a variety of challenges in a health system in Boston. When you've got an organization that has so many behavioral challenges, they can range from a new patient in your emergency department that can't find their belongings to someone who comes in at risk of getting sepsis. How do you treat that person? These are all behavioral problems, right? When you're looking at something, like the best way to treat sepsis, you often assume we're providing the best care and doing the right thing. These psychologies, the way that we deviate from optimal decision-making, impact all of us. We all suffer from these human biases. When you think about why someone might not be following the CMS guidelines for sepsis the right way, it's fascinating because you realize they might be doing their best. There is so much going on in the emergency department that's taking away their attention and all of these difficulties in the environment can influence decision making. We make this assumption that experts don't suffer from these biases, but they do just in the same way that you and I do.”
19:16 – Open your eyes and see the world in color! “We have a behavioral economics bootcamp, a healthcare bootcamp, and a finance bootcamp and they all start to open your eyes into the possibilities. You start to see the world in color. Before you think through the behavioral lens, we learn that people are rational and make good decisions almost all of the time. It's almost a disservice when we’re taught so rigidly that this is the case because we can't pay attention to everything. We forget things. There are so many elements of our environment that influence our decision making and we're not going to interact the same way in a football stadium as we would in a place of work. Once you get into this course or our workshops, you start to see the applications to your work or products in a way that is really powerful.”
25:22 – Complexity of solutions. “When we analyze any sort of behavior change problem, we try to find the key psychologies that influence decision making and impact the likelihood that someone will do a behavior right or follow through with their intention. We do a good job at coming up with solutions that are implementable and trying to quantify the impact and potential cost of those solutions. Each solution might have predicted impact. We're uniquely strong at predicting that impact because we create hypotheses about behavior change every single day and try to quantify the cost. Some of these things may be great solutions, but the cost might not feasible. Coming up with a behaviorally informed solution is not just a wild idea that you could try to do. It really is a suite of ideas that might have different levels of impact and cost to help the client determine the right solution.”
31:05 – Logistical and psychological frictions. “When we talk about friction, it's important to note there are two types of friction that we study as behavioral scientists. One is logistical friction, which is the idea of having to do an extra step. The other is psychological friction, which is a choice, thought or evaluation you have to make. If you can simplify your world from a logistical point of view, it's really powerful. Google ran a study in one of its cafeterias where they put out some snacks and then they put out drinks. One drink area was about nine feet away and one was about 20 feet away. Having the drink area 10 feet closer to the snacks increases the amount of snacks people take. One of the key takeaways from behavioral science is if you don't want to do something, make it a little bit harder for yourself. If you want to watch a little bit less TV, take the batteries out of your remote and put them someplace hard to see. These are logistical frictions you could think about. When you think about psychological friction, you want to make the decision as easy as possible. If you're trying to help someone else, make it easy for them. It's very easy to underestimate the amount of friction because it can be actually the same number of steps but presented differently. If you're presenting it all at once, it's just the perception of friction. Imagine you're asking somebody to do all the steps all at once on the same page - it seems really hard. On the other hand, breaking it down into little parts makes the perception of friction seem minimal.”
34:22 – The Eldar Shafir cognitive friction study. “There's a study I love ran by Eldar Shafir. He did the study with physicians by giving them a patient named John who is a 67-year-old farmer. He has a hip problem, and you recommended a hip replacement surgery. This is where the experiment starts - they randomize physicians into two groups. One group tells the doctors that they forgot one medication. They ask the doctors if they would like to continue with their diagnosis of the hip replacement or try the new medication - 50% stick with the original diagnosis and 50% try the medication. The other group tells the doctors that they forgot two medications. They ask the doctors if they would like to continue with their diagnosis of the hip replacement or try the new two different medications – about 70% of stick with the original diagnosis because the choice is harder. Now, there is a third option, and they’ve got to make a choice. This is cognitive friction that impacted the providers. You want to make it as easy as possible for your patients to execute their treatment plans, and when you're making decisions, you have to be thoughtful about minimizing the cognitive friction and making it easy for you to make the right recommendations.”
38:33 – Why did they answer the way they answered? “I don't know the answer offhand, but I'm confident they probably had to do with the scenario or the diagnosis. In behavioral science, when you ask someone why they do something, they will tell you what they think the answer is, but not the answer. There's a classic example when you're thinking about retirement savings. If you look at someone who's saving for retirement and ask why they are saving for retirement, they may say they really care about their future, my family, or being financially responsible. If you look at someone else who’s not saving for retirement and ask them why they aren't saving, they may say they have bills coming up, they’re stretched right now, or they’ll do it later. When you look at people saving for retirement or people not saving for retirement, there's really one behavioral variable that matters: whether or not they've been defaulted into their employer sponsored retirement plan. That's it. If you go back to the study and ask these providers why they made their recommendation, they will most likely tell you something about the medical diagnosis or treatment plan that made them think they made the right choice. I'm very confident that very few of them would be able to say that the choice was more complex.”
40:44 – Self-hurting. “You're describing a behavioral phenomenon we call self-hurting. When you try something out or do a behavior, you are more likely to do it again in the future. Maybe you'll never do it again, but we tend to follow the behavior that we've done in the past. When physicians make a diagnosis, they're likely to continue with that. When you look surgeons, the quality of the surgeon goes up with age for people who are performing a lot of surgeries. They're getting real time feedback because they’re seeing what works and what doesn't work. If you look at providers, oftentimes younger providers have higher quality recommendations because they have been recently trained in the best possible medical approaches. For surgeons, rapid feedback is really important to actually improving. To your point about self-hurting, you may just do the same thing you've always done and not get the feedback on if it’s the right thing to do or not.”
45:03 - The workings of Irrational Labs. “We use applied behavioral science, product design, consulting. Everything from getting a new patient to growing your patient base to having someone interact with a product. We've designed digital patient monitoring experiences for people that are experiencing symptoms as a result of some of the treatments they've taken. We've built out digital tools, physician decision-making tools, flows for onboarding new patients. The whole spectrum of healthcare. We've pretty much worked with every kind of player. We also do trainings and teachings. It’s a really nice way to get your team familiar with the behavioral science approach and how to build it into your workflow. Those are the main ways that we work.”
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