It’s been a few months since many of us made New Year’s resolutions. Have you stuck with yours? Professor Leslie John studies how to help people change bad habits (and reinforce good ones) by looking at what makes them tick. Here, she discusses stickK, an application that motivates people by forcing them to put skin in the game of self-improvement.
Brian: According to the Statistic Brain Research Institute, 45 percent of Americans make New Year's resolutions. Only 8 percent will make their goals. But it's not all bad. Their research also shows that by explicitly stating a resolution, you are 10 times more likely to attain your goals. What's the best way to stick with it? Today, we'll hear from Professor Leslie John about her case entitled, “Making stickK Stick: The Business of Behavioral Economics.” I'm Brian Kenny, and you're listening to Cold Call.
Professor John teaches negotiations in both the MBA and Executive Education programs at Harvard Business School. Her research centers on how consumers’ behavior and lives are influenced by their interaction with firms and with public policy. Leslie, thanks for joining us.
Leslie: Thanks for having me.
Brian: Why did you write this case? How did you hear about stickK?
Leslie: For a long time, I have been interested in behavioral change. Part of the thing that intrigues me about stickK is it's using psychological mind games to try to change your behavior, and it's something I relate to personally because I find that I'm often trying to trick myself into behaving better. For example, one trick I do is when I'm trying to convince myself to go to the gym, I'm sitting on the couch watching trash TV and it feels really good, the idea of going to the gym is super aversive, but I know that I should. know that after I go to the gym I'll feel better, so there's all these benefits, but it's a big hurdle to get myself to the gym.
The intervention that I play on myself, or in other words, the psychological mind game, is I say to myself, "Leslie John, all you have to do is dress for success. All you have to do is put your gym clothes on, and walk to the gym, and show up, but once you get to the gym, you can turn right back around. You don't have to do anything once you get to the gym." Of course, when I get to the gym, I always do something, but the idea is that just saying, “all I have to do is get dressed and show up,” it really helps me to break down the hurdle, this inertia that I face, break it into baby steps as opposed to trying to conquer the whole thing at once.
Brian: For listeners who don't know what stickK is, what's the whole premise of stickK?
Leslie: The premise of stickK is to put your money where your mouth is. First, you have to specify the goal very clearly, "I would like to lose 20 pounds in two months," and then the product prompts you to put some money down, so wager some money. "I would like to wager $200. If I don't attain my goal then I forfeit the money."
You also have the option of specifying where your money goes if it's forfeited, and I'm not sure if it's still possible to do this. In the beginning, the thinking was, "Well we should let people specify charities," so "if I forfeit my money, then I can specify that my money should be donated to the Red Cross." The problem with that is I psychologically think of it as, "Okay, once I put my money down and specify that if I don't lose weight it's going to the Red Cross," then I think, "well now I'm kind of a bad person if I attain my goal, because if I attain my goal then the people at the Red Cross aren't going to get the money."
The way that stickK deals with this problem is they have a feature called the anti-charity. It's devilishly clever. You specify a charity that you hate, and so if you don't attain your goal and— you want more gun control in the US—then you can specify the NRA as your anti-charity.
Brian: Okay. Very clever. In the early days, you talk about the co-founders, Ian Ayres and Dean Carlin, competing against each other in some ways and putting real money on the line. Talk about the psychology that goes into committing to something in this way when you put up some stakes.
Leslie: There are a variety of psychological biases or principles that deposit contracts, or in other words, wagering your own money takes advantage of. One is over-confidence. We know that people, including myself, are overly optimistic with respect to their ability to accomplish their goals, in particular their health goals. The approach is instead of trying to make people not optimistic, or not overconfident, which turns out to be very hard (it's hard to de-bias people), the idea is that we can actually use their bias to help them accomplish the goals that they want to accomplish.
If you're overconfident with respect to your ability to lose weight, this should enhance your motivation, to put skin in the game, because you think in prospect, "Of course I'm going to attain the goal.” This over-optimism actually propels you, motivates you to put skin in the game, but then after having put skin in the game, loss aversion kicks in. The pain of losing something is just much more poignant than is the pleasure associated with the objectively equivalently-sized gains. Loss aversion kicks in. Simply put: you don't want to lose the money, and so that further propels you, or further motivates you to lose the weight.
Brian: You talk about when Ian and Dean—they attain their goals, they had real money at stake, and then once they attained their goals, they took a step back and very quickly they both gained the weight back. What's the boomerang effect of this?
Leslie: This is something that I struggle a lot with in thinking about this topic. The research I’ve done suggests both the promise and the perils of this approach. The promises, of course, we see in rigorous randomized controlled trials that in the short run, when we implement these incentives systems, are designed to use principles from behavioral economics. When we implement these systems, they're very good at inducing behavior change in the short run. The rub is that in the long term, it's really hard to sustain this behavior change. What we've found is that once we've removed the incentives systems, people, to your point, boomerang back. They regain much of the weight (in some cases all of the weight that they lost), arguably making them worse off. Now, in general, it is really, really hard to facilitate long-term behavior change. It's not simply a flaw of this approach. To me, it says that it's really hard to change behavior and I think it points to a lot of opportunity for future work that we can do to try to devise ways to not only facilitate short-term behavior change, but to facilitate long term behavior change. I have lots of ideas I'd love to test.
Brian: Right, so more to be done on that. You mentioned the fact that most of the goals have to do with physical fitness or with weight loss, but you have an exhibit—people can hear me turning the pages here. I love the exhibit that showed the different kinds of things that people actually put on their contract. “Pass my citizenship test," was an interesting one, "learn to play the fiddle, get married." So can you really use this kind of an incentive system to get married?
Leslie: I don't know. I think that a lot of these are a bit of a stretch. I think that these types of systems work better for behaviors that you can break down into sub-goals. If you want to get married, how would you break that into sub goals? I can think of ways, but it's hard.
Brian: You’ve got to go on a date, I guess.
Leslie: Then you're like, "How many dates per month?" I don't know. Then you worry that in the hyper-quantification of the goals, you lose something, you lose the romance with respect to the marriage example. But these systems, they work better when you can break the goal down into sub-goals, and they also work better when it's very clear what the outcomes are at each stage, and the outcome is clearly verifiable.
Brian: How do students react to this in the classroom?
Leslie: They find it so relatable. I love opening the class with asking people, “who has a bad habit? Who had ever had a bad habit that they've tried to change?” All the hands go up and it's fascinating hearing people's stories about when they've succeeded and when they've failed, and all the interesting things that people try to do to change their behavior. It's really hard to change behavior.
Brian: The notion of behavioral economics being used in a business research context is an interesting one. Would you just comment on that a little bit? As we look at research models and management education changing, this is one of the areas that seems to be really booming.
Leslie: It's a more descriptively accurate picture of human behavior, so it describes how people actually behave. This is important because it strikes me that to really devise interventions that help people change, we really need to understand how people actually behave, we need to understand what makes them tick. Another thing that I like to use this case to teach is how to evaluate programs and the value of AB testing, or randomized control trials to actually answer, "Does this thing work?" One of the things I do in class is after talking about the product and how it works, I ask them, “at the end of the day, do we know that this product works, does it actually cause people to lose weight?”
I point them to one of the appendices, which shows that people who wager their own money are more likely to succeed, and I say, "Does this convince you? Does this tell us that the product works?" Of course the answer is no. I let students talk, case-method it, and I ask them questions to try to get them to appreciate that no, this doesn't actually tell us whether the product works because it really could be telling us more about the type of person that uses the product than the product being effective. It could simply tell us that the people who are particularly motivated to lose weight—those are the ones that put their skin in the game. And it's not because they necessarily use the product, it's because they're just super motivated.
I tell students, I explain to them the empirical work, the research that we've done that actually randomizes people. So if you take any random person and you give them this product, is it going to work? We have research suggesting that yes it will work, so I'm showing people the value of the research side plus the business side merged together.
Brian: Clearly, businesses were finding this attractive. You talk in the case about Staples and the American Cancer Society, how were they taking this and using it for their employees?
Leslie: I think that the B2B application—that is when stickK basically comes up with a customized version for Staples and Staples employees. I think in many ways that is a richer application of the product because there are so many different things you can play around with. You can play around with point systems, for example, where you endow people with points to begin with, employees, which they can lose or gain more of, and then they can redeem points for things they care about.
You could also play around with the things that people can redeem the points for. In the standard product, it's just money that you get, you get your money back, but imagine if you redeem points for days off of work, or points for a better parking spot. There are all kinds of fascinating things that you could play around with that I think will ultimately be more motivating than just getting hard cold cash.
Brian: Maybe we should try this at Harvard Business School. What do you think?
Leslie: Maybe. I'm trying to think of what I would do, what behaviors I would try to change, and whether it's of my colleagues or my students.
Brian: All right, we'll file that away until next time. Leslie, thank you so much for joining us.
Leslie: Thank you very much for having me.
Brian:You can find this case, along with thousands of others in the Harvard Business School case collection at hbr.org. I'm Brian Kenny. Thanks for listening to Cold Call, the official podcast of Harvard Business School.