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Diciembre 2016 © Copyright Insitum 2016
Think Before you Do:
Service Design and Behavioral
Economics
Service Experience Chicago, Aug 2016
Luis Arnal
#designthinking
@insitum
@luisarnal
INSITUM HELPS ORGANIZATIONS
SOLVE COMPLEX, STRATEGIC,
AMBIGUOUS PROBLEMS
THROUGH PEOPLE-CENTERED
APPROACHES
MOST OF THESE
PROBLEMS CAN BE
SOLVED BY
INNOVATING
PRODUCTS, SERVICES,
BRANDS, PROCESSES,
EXPERIENCES.
SUCH AS: DESIGN THINKING, LEAN
PROCESSES, ETHNOGRAPHIC
RESEARCH, USER EXPERIENCE
DEFINITION, BEHAVIORAL SCIENCE,
INNOVATION CONSULTING, ETC.
CHICAGO
BARCELONA
MÉXICO CITY
BOGOTÁ
LIMA
SÃO PAULO
BUENOS AIRES
WE WORK WITH LEADING COMPANIES
Diciembre 2016 © Copyright Insitum 2016
A few years ago...
CREDIT: FOLLYGRAPH, 38 WAYS TO MAKE A PERFECT COFFEE - 2ND EDITION
Diciembre 2016 © Copyright Insitum 2016
Today
CREDIT: FOLLYGRAPH, 38 WAYS TO MAKE A PERFECT COFFEE (CROPPED IMAGE)
Diciembre 2016 © Copyright Insitum 2016
A few years ago...
Diciembre 2016 © Copyright Insitum 2016
Behavioral
Economics Stoicism & other philosoph
schools
Positive Psychology
Design Research
Data Science
Data Visualization
Art
Political
Science
Service Design +
Organizational
development
Diciembre 2016 © Copyright Insitum 2016
Behavioral Economics
Behavioral economics explores why people sometimes make irrational
decisions, and why and how their behavior does not follow the
predictions of economic models.
http://www.investopedia.com/terms/b/behavioraleconomics.asp#ixzz4IaP3ivr2
Diciembre 2016 © Copyright Insitum 2016
Diciembre 2016 © Copyright Insitum 2016
a) Both are the same size
b) Blue is longer
c) Red is longer
d) I’d rather not respond now
Diciembre 2016 © Copyright Insitum 2016
Diciembre 2016 © Copyright Insitum 2016
Diciembre 2016 © Copyright Insitum 2016
Economía Psicología
“errare humanum est”
Diciembre 2016 © Copyright Insitum 2016
Today
As a Research tool (to explain observable behavior
or plan for the best approach)
As an Assessment tool (to evaluate current
experiences / system)
As an Ideation tool (to inspire the divergent thinking
phase or purposefully embed principles in the
design)
Diciembre 2016 © Copyright Insitum 2016
Why some patients are reluctant to switching to a new therapy in spite of
having evidence that supports higher efficiency?
Research
Assessment
Ideation
Diciembre 2016 © Copyright Insitum 2016
Barrier to switching therapy: Switching treatment is hard because people have
invested time, money, pain, and learned behaviors. Letting go means losing
that investment.
Research
Assessment
Ideation
Sunk Cost Fallacy: The more you
invest in something the harder it
becomes to abandon it.
Diciembre 2016 © Copyright Insitum 2016
Chronic-disease patients can spend years expecting an unrealistic goal
(finding a cure) instead of doing things that will make them happier or improve
their quality of life (i.e. running a marathon)
Research
Assessment
Ideation
Diciembre 2016 © Copyright Insitum 2016
Study novice and advanced patients: When inquiring about patient needs,
advanced patients have more manageable expectations and clearer priorities
(but less quality of life) than novice patients.
Research
Assessment
Ideation
Intertemporal Choice: People make
decisions (and have desires) based on
their current situation, not their future
one.
Diciembre 2016 © Copyright Insitum 2016
Research
Assessment
Ideation
Long periods of unresponsiveness and lack of decision making from the
patient allows the tumor to advance and metastasize, leading to a vicious
cycle of problems.
Diciembre 2016 © Copyright Insitum 2016
Loss Aversion: Losses
hurt more than gains
feel good
Attitude towards
Chemotherapy: For women,
losing hair or a breast makes
them reluctant to therapy—
even if such “losses” can
save their life. This leads to
more effort, stress,
unhappiness or death.
Research
Assessment
Ideation
Diciembre 2016 © Copyright Insitum 2016
Research
Assessment
Ideation
Why some doctors prescribe the same therapy to all their patients?
Diciembre 2016 © Copyright Insitum 2016
The Anatomy Lesson of Dr. Tulp, Rembrandt
Status Quo Bias: People tend to choose
the default option because they are
unwilling to assume the time, effort and risk
of a different choice.
Using guidelines releases MD’s responsibility: Doctors rely excessively on
guides when choosing a therapy, even when suspicious that other options
might be more effective
Research
Assessment
Ideation
Diciembre 2016 © Copyright Insitum 2016
Research
Assessment
Ideation
Why do patients delay the process for obtaining a diagnosis—mostly when a
chronic illness is involved?
Diciembre 2016 © Copyright Insitum 2016
Information avoidance: People avoid
receiving information which may lead to
negative emotions.
Delayed suffering: Instinct pushes people to delay / deny / disagree with bad
news, such as a chronic disease, because of the additional resources (i.e.
mental, time, money, emotional) this will demand.
Research
Assessment
Ideation
Diciembre 2016 © Copyright Insitum 2016
Research
Assessment
Ideation
Patients prefer to go to a hospital rather than a clinic, in spite of crowded halls,
long lines, not guaranteed appointments, and other risks
Diciembre 2016 © Copyright Insitum 2016
Research
Assessment
Ideation
Rename clinics: Position clinics as hospital extensions will increase their
reputation and patients will be more evenly distributed within the healthcare
system.
Availability Heuristic: People rely on easy
to access decisions (top of mind)
Bandwagon Effect: People do and believe
things just because others do or believe the
same
Diciembre 2016 © Copyright Insitum 2016
Research
Assessment
Ideation
Patients stop treatment once they start feeling well , avoiding the doctor
experience (potential bad news, reminding sickness, interrupt daily activities,
cognitive stress, etc.)
Diciembre 2016 © Copyright Insitum 2016
Research
Assessment
Ideation
Super sticky adherence: Have someone else with positive attributes (friendly
female) visit patient in their home and bond in order for positive attributes of
the nurse/experience migrate to the therapy.
Halo effect: Attributes of a
thing/person/experience will spread over
if you put them together.
Diciembre 2016 © Copyright Insitum 2016
Wrapping up:
If you look closely, you will find that most experiences are
affected—positively or negatively—by a number of BE
principles.
Identifying these allows you to understand [behaviors,
thoughts, decisions, needs], dissect [problems, systems,
consequences] and design [define, prioritize, ideate]
Service designers should be proficient in these principles if
they want to use them purposefully to help people live better
experiences.
Diciembre 2016 © Copyright Insitum 2016
Behavioral
Economics Stoicism & other philosoph
schools
Positive Psychology
Design Research
Data Science
Data Visualization
Art
Political
Science
Service Design +
Organizational
development
Diciembre 2016 © Copyright Insitum 2016
Nitrogenated coffee?
[look for image]
Diciembre 2016 © Copyright Insitum 2016
Gracias!
Thanks to Thomas Hahn, Olivia Radillo, Eyra Perez and Nathalie Cacheaux—
most of the ideas presented here came from them
luisarnal@insitum.com
@luisarnal

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Service Design and Behavioral Economics

  • 1. Diciembre 2016 © Copyright Insitum 2016 Think Before you Do: Service Design and Behavioral Economics Service Experience Chicago, Aug 2016 Luis Arnal #designthinking @insitum @luisarnal
  • 2. INSITUM HELPS ORGANIZATIONS SOLVE COMPLEX, STRATEGIC, AMBIGUOUS PROBLEMS THROUGH PEOPLE-CENTERED APPROACHES MOST OF THESE PROBLEMS CAN BE SOLVED BY INNOVATING PRODUCTS, SERVICES, BRANDS, PROCESSES, EXPERIENCES. SUCH AS: DESIGN THINKING, LEAN PROCESSES, ETHNOGRAPHIC RESEARCH, USER EXPERIENCE DEFINITION, BEHAVIORAL SCIENCE, INNOVATION CONSULTING, ETC.
  • 4. WE WORK WITH LEADING COMPANIES
  • 5. Diciembre 2016 © Copyright Insitum 2016 A few years ago... CREDIT: FOLLYGRAPH, 38 WAYS TO MAKE A PERFECT COFFEE - 2ND EDITION
  • 6. Diciembre 2016 © Copyright Insitum 2016 Today CREDIT: FOLLYGRAPH, 38 WAYS TO MAKE A PERFECT COFFEE (CROPPED IMAGE)
  • 7. Diciembre 2016 © Copyright Insitum 2016 A few years ago...
  • 8. Diciembre 2016 © Copyright Insitum 2016 Behavioral Economics Stoicism & other philosoph schools Positive Psychology Design Research Data Science Data Visualization Art Political Science Service Design + Organizational development
  • 9. Diciembre 2016 © Copyright Insitum 2016 Behavioral Economics Behavioral economics explores why people sometimes make irrational decisions, and why and how their behavior does not follow the predictions of economic models. http://www.investopedia.com/terms/b/behavioraleconomics.asp#ixzz4IaP3ivr2
  • 10. Diciembre 2016 © Copyright Insitum 2016
  • 11. Diciembre 2016 © Copyright Insitum 2016 a) Both are the same size b) Blue is longer c) Red is longer d) I’d rather not respond now
  • 12. Diciembre 2016 © Copyright Insitum 2016
  • 13. Diciembre 2016 © Copyright Insitum 2016
  • 14. Diciembre 2016 © Copyright Insitum 2016 Economía Psicología “errare humanum est”
  • 15. Diciembre 2016 © Copyright Insitum 2016 Today As a Research tool (to explain observable behavior or plan for the best approach) As an Assessment tool (to evaluate current experiences / system) As an Ideation tool (to inspire the divergent thinking phase or purposefully embed principles in the design)
  • 16. Diciembre 2016 © Copyright Insitum 2016 Why some patients are reluctant to switching to a new therapy in spite of having evidence that supports higher efficiency? Research Assessment Ideation
  • 17. Diciembre 2016 © Copyright Insitum 2016 Barrier to switching therapy: Switching treatment is hard because people have invested time, money, pain, and learned behaviors. Letting go means losing that investment. Research Assessment Ideation Sunk Cost Fallacy: The more you invest in something the harder it becomes to abandon it.
  • 18. Diciembre 2016 © Copyright Insitum 2016 Chronic-disease patients can spend years expecting an unrealistic goal (finding a cure) instead of doing things that will make them happier or improve their quality of life (i.e. running a marathon) Research Assessment Ideation
  • 19. Diciembre 2016 © Copyright Insitum 2016 Study novice and advanced patients: When inquiring about patient needs, advanced patients have more manageable expectations and clearer priorities (but less quality of life) than novice patients. Research Assessment Ideation Intertemporal Choice: People make decisions (and have desires) based on their current situation, not their future one.
  • 20. Diciembre 2016 © Copyright Insitum 2016 Research Assessment Ideation Long periods of unresponsiveness and lack of decision making from the patient allows the tumor to advance and metastasize, leading to a vicious cycle of problems.
  • 21. Diciembre 2016 © Copyright Insitum 2016 Loss Aversion: Losses hurt more than gains feel good Attitude towards Chemotherapy: For women, losing hair or a breast makes them reluctant to therapy— even if such “losses” can save their life. This leads to more effort, stress, unhappiness or death. Research Assessment Ideation
  • 22. Diciembre 2016 © Copyright Insitum 2016 Research Assessment Ideation Why some doctors prescribe the same therapy to all their patients?
  • 23. Diciembre 2016 © Copyright Insitum 2016 The Anatomy Lesson of Dr. Tulp, Rembrandt Status Quo Bias: People tend to choose the default option because they are unwilling to assume the time, effort and risk of a different choice. Using guidelines releases MD’s responsibility: Doctors rely excessively on guides when choosing a therapy, even when suspicious that other options might be more effective Research Assessment Ideation
  • 24. Diciembre 2016 © Copyright Insitum 2016 Research Assessment Ideation Why do patients delay the process for obtaining a diagnosis—mostly when a chronic illness is involved?
  • 25. Diciembre 2016 © Copyright Insitum 2016 Information avoidance: People avoid receiving information which may lead to negative emotions. Delayed suffering: Instinct pushes people to delay / deny / disagree with bad news, such as a chronic disease, because of the additional resources (i.e. mental, time, money, emotional) this will demand. Research Assessment Ideation
  • 26. Diciembre 2016 © Copyright Insitum 2016 Research Assessment Ideation Patients prefer to go to a hospital rather than a clinic, in spite of crowded halls, long lines, not guaranteed appointments, and other risks
  • 27. Diciembre 2016 © Copyright Insitum 2016 Research Assessment Ideation Rename clinics: Position clinics as hospital extensions will increase their reputation and patients will be more evenly distributed within the healthcare system. Availability Heuristic: People rely on easy to access decisions (top of mind) Bandwagon Effect: People do and believe things just because others do or believe the same
  • 28. Diciembre 2016 © Copyright Insitum 2016 Research Assessment Ideation Patients stop treatment once they start feeling well , avoiding the doctor experience (potential bad news, reminding sickness, interrupt daily activities, cognitive stress, etc.)
  • 29. Diciembre 2016 © Copyright Insitum 2016 Research Assessment Ideation Super sticky adherence: Have someone else with positive attributes (friendly female) visit patient in their home and bond in order for positive attributes of the nurse/experience migrate to the therapy. Halo effect: Attributes of a thing/person/experience will spread over if you put them together.
  • 30. Diciembre 2016 © Copyright Insitum 2016 Wrapping up: If you look closely, you will find that most experiences are affected—positively or negatively—by a number of BE principles. Identifying these allows you to understand [behaviors, thoughts, decisions, needs], dissect [problems, systems, consequences] and design [define, prioritize, ideate] Service designers should be proficient in these principles if they want to use them purposefully to help people live better experiences.
  • 31. Diciembre 2016 © Copyright Insitum 2016 Behavioral Economics Stoicism & other philosoph schools Positive Psychology Design Research Data Science Data Visualization Art Political Science Service Design + Organizational development
  • 32. Diciembre 2016 © Copyright Insitum 2016 Nitrogenated coffee? [look for image]
  • 33. Diciembre 2016 © Copyright Insitum 2016 Gracias! Thanks to Thomas Hahn, Olivia Radillo, Eyra Perez and Nathalie Cacheaux— most of the ideas presented here came from them luisarnal@insitum.com @luisarnal

Editor's Notes

  1. 20 years ago in chicago you could only get three types of coffee.
  2. Now we have dozens of coffee varieties: grain types, preparations, origins, Methods, ingredients, cups, temperaturas, etc.
  3. 10 years ago we used SD to diagnose experiences, créate customer journey maps, identify problems / opportunities for improvement and develop Service blueprints around new ideas.
  4. Today we are developing Service design into a more diverse [eclectic, adaptable] discipline. This is being driven by the Market (the type pf problems we are asked to solve) and by eclectic and curious practitioners who are finding value in bringing other disciplines to SD. Such as the arts, social sciences, business, and others. This is what I would like to talk about today. Specificaly about the aplication of BE to SD (I use these conferences to share them and hopefully provoque discussion with other Smart People like you.)
  5. Which horizontal line is longer?
  6. Here are the four valid answers. Choose wisely
  7. Look again…
  8. If you answered incorrectly, you are part of the 80% who don’t put enough effort in solving this problem. You are know-it-alls, not apprentices. You need to be *always* an apprentice and question everything.
  9. We humans have cognitive limitations which restrict / limit our decisión making and problem solving process. We are not rational, logical, Smart computers able to decide correctly most of the time. Quite the opposite, People are quite dumb most of the time (but quite Smart if you ask them). Los seres humanos tenemos limitaciones cognitivas que restringen nuestra forma de tomar decisiones (no somos totalmente racionales) y nuestra capacidad para resolver problemas.
  10. There are three ways in which we have applied behavioral economic principles (or behavioral science) lens to Service design. As a Research tool (to explain observable behavior or plan for the best research approach) As an Assessment tool (to evaluate current experiences / system) As an Ideation tool (to inspire the divergent thinking phase or purposefully embed principles in the design)
  11. Sunk Cost Fallacy: The more you invest in something the harder it becomes to abandon it.
  12. Intertemporal Choice: People make decisions (and have desires) based on their current situation, not their future one. Cuando les preguntamos a los pacientes con enfermedades crónicas o terminales qué es lo que necesitan o desean a futuro, muchas veces responden "me quiero curar o que descubran la cura de la enfermedad" y esto responde a que en ese momento están aceptando el diagnóstico que recibieron o están en proceso de adaptación del tratamiento, por lo que les cuesta trabajo ver otras necesidades que realmente les ayudaría a aprender a vivir y sobrellevar la enfermedad.  Por eso nosotros siempre procuramos tener pacientes que se encuentren en distintos momentos del proceso o ruta de la enfermedad, así como hacer ejercicios proyectivos para ayudarlos a imaginar un mejor futuro, para ellos u otros pacientes. 
  13. Status Quo Bias: People tend to choose the default option because they are unwilling to assume the time, effort and risk of a different choice. Esto lo veo al momento de seleccionar tratamientos por parte de algunos médicos, están los que sí estudian el caso y son más arriesgados, pero la mayoría se van por la terapia estándar, lo ya probado.
  14. Information avoidance: People avoid receiving information which may lead to negative emotions. Information avoidance Cuando la gente sospecha que podría tener alguna enfermedad grave, comienza a ignorar los síntomas, evita leer al respecto, y sobre todo a ir al doctor a que le confirme lo que prácticamente ya sabe. Es probable que su condición esté mucho peor y menos manejable cuando por fin decide diagnosticarse o lo obligan sus parientes. Este tipo de historias las hemos escuchado en una gran cantidad de proyectos
  15. Availability Heuristic: People rely on easy to access decisions (top of mind) Bandwagon Effect: People do and believe things just because others do or believe the same Status quo plays here too!
  16. Super sticky adherence: Have someone else with positive attributes (friendly female) visit patient in their home and bond in order for positive attributes of the nurse/experience migrate to the therapy.
  17. If you look closely, you wil find that most experiences are affected—positively or negatively—by a number of BE principles. Identifying these allows you to understand [behaviors, thoughts, decisions, needs], dissect [problems, systems, consequences] and design [define, prioritize, ideate] Service designers should be proficient in these principles if they want to use them purposefully to help people live better.
  18. The ideas presented here are just a small example of how Service design can evolve. I believe we should bring in new ideas, concepts, theories, tolos from other disciplines to nurture and grow this practice. The world needs lots of Service designers, but we also need to be able to deliver more value to organizations. My next gig will be on bringing the concepts of stoicism into Service design—i hope someone invites me to talk about this son ;-)
  19. But again, it may be pushing it too far (Image: Nitro Coffee)
  20. Keep in touch, give feedback, connect, like this, share.