The power of the nudge

It has been a long while since I last added to this site. Much has happened on the business front, including opening in Australia and changing the company name to MWS Technology Ltd. I have also become chair of North Hertfordshire College – a wonderful role where the team and I have the opportunity to improve life options for thousands of people each year.

One of the things I have been giving a lot of thought to is how those who deliver programmes affecting large numbers of people can improve what they do.

It doesn’t matter whether an organisation is selling baked beans or running welfare to work and skills programmes – successful enterprises focNudgeus on results. It would be nice to think there is some performance enhancing magic bullet, however, in reality there are rarely single actions that transform effectiveness. Both baked beans merchandising and welfare to work / vocational training rely upon doing certain basic things well and then looking for small changes that can create incremental improvement.

This is where nudging and technology come in. Given my day job – and as I have reached the limits of my baked beans knowledge – my focus is on the world of welfare to work and skills programmes. Let’s assume that a provider is competent and is doing all the standard things well. They know how many people are on various programmes, who is responsible for each person, the delivery status and success rates. I am interested in how technology can help them drive additional performance.

Hiring better staff is an option. But this is hard to do and in a low margin business potentially counterproductive. A good service delivery model is helpful, however, ensuring it is followed is challenging – and meanwhile one size does not fit all.

Nudging is the art of suggesting small behaviour changes that are relatively easy for a person to make. And so long as the volume of transactions are high – i.e. the number of events where there is an opportunity to nudge – a percentage of successful nudges will add up to a material outcome improvement.

It was this thinking that resulted in our developing the Nudge Engine® several years ago and more recently the Aptem Performance Manager®. We have been working with providers on how to make nudging work and tend to use a five step model:

Segment
Not all programme participants are the same. Some are more engaged, some have particular barriers, some have circumstances that positively or negatively affect them. We advise providers to use their experience and knowledge to create some segments they believe are meaningful. Allocate half to two thirds the individuals to the relevant segments and the rest to a control group.

Hypothesise
They should then consider each of their segments and how and why modifying their programme for a person in the segment will make a positive difference. They decide upon actions and suggestions for each cohort that they believe will be helpful.

Nudge
The third step is to code into their platform (such as MWS’s Aptem) workflows,

Nudge iteration process

Nudge iteration process

the nudges that they believe will be beneficial. These may be suggestions for the participant or staff members. It may be delivered content or choices. It may be tasks or rewards. Our advice is to make it small things that should be relatively easy for a person to do or follow.

Track
The provider needs to measure the impact of its nudges and contrast them with the control group, noting which ones work and which ones don’t.

Refine
The final step is to use the results to consider which of their segmentations and hypotheses prove correct. The provider drops those that are wrong, tries to improve the ones that seem to be working and creates new ones to trial.

As this process is iteratively repeated the organisation starts seeing improvements. They can swiftly cease actions that have a negative impact and ensure they maintain the ones that work. This type of approach brings several benefits to a provider.

First and foremost, they improve the quality of their programmes, improving the outcomes for the individuals they are here to help. Given that funded delivery is now largely payment by results this has a profound effect on organisational success and sustainability.

As a technology developer, what we are doing is providing a mechanism to determine and then lock in processes that evidently work. We are enabling providers to create know-how in their organisation that can be both protected and ongoing developed.

As a provider develops its bank of proven nudges it also builds up a capability that they can prominently feature in their tenders alongside their superior outcome data, increasing their bid success rate.

It is just over 20 years since Tesco introduced the Clubcard and over the years they have got very good at understanding their customer and how to sell a lot of beans. My view is that this approach is as meaningful in our sector. We are putting considerable resources into researching and implementing the technology that permits those in our sector to pursue similar innovation.

Motivation Matters

Later this week I am speaking at a conference on digital innovation in job search. As I work on my presentation I cannot help but reflect on some challenging home truths. There is a common perception that some people simply cannot use technology. That it is too complicated for them or they are of a generation that simply does not ‘get it’.

However, it does not take very long to find evidence disproving this. Video-conferenceHow many people who never found use for a computer adopt the technology once their grandchildren are on Skype? Or what about those who discover they can make some ready cash buying and selling on ebay?  Or perhaps their interest in their family history has brought them to the many research tools available online.

The simple truth is that most people will make the effort to learn how to use technology when it suits them to do so. The challenge is helping the person recognise the benefits so they make the effort.

This has particular relevance for job search. Without digital skills it is hard to find anything but the most basic job. From vacancy search to online application forms to simply emailing a CV, technology is ubiquitous.

We developed MyWorkSearch because it seemed obvious that a low cost and readily accessible job search assistance portal would make sense for very large numbers of people. The hundreds of thousands who have benefited from the service demonstrates the merits of the approach. But what about those who find it all just a bit too difficult?

All too often I see those assisting others with job search simply accepting low levels of digital literacy and agreeing that alternative methods of job search are acceptable. The more I think about this the clearer it is to me that we are doing jobseekers a disservice. Very, very few people are genuinely incapable of using technology. We need to make clear to jobseekers a) why technology will benefit them and b) that learning basic IT skills is both essential and within their capabilities. Too many people use ‘technology’ as the barrier that impedes their job search. Those of us who work in the employment sector need to be clear that the training and equipment are available and the only real barrier is motivation.

I am very busy

The trouble with being an entrepreneur is that there is always something that needs doing. An area that can be improved, a new initiative to be got off the ground or simply a fire to be put out. And then there are the demands of family, from pleasurable activities with spouse and children to the inevitable chores. All in all, finding spare time is challenging.

It was in this context that I attended Silicon Valley Comes to the UK this week (http://www.svc2uk.com). This is an annual week long programme of events around the UK aimed at audiences ranging from university students to established company CEOs. What makes it special is that almost 40 extremely successful US technology entrepreneurs and investors (http://www.svc2uk.com/speakers) gave up their time to spend a week in the UK, freely giving of their experience and advice. Over the week they influenced thousands of people, inspiring them to achieve more and providing invaluable real-world guidance. I am certain that every one of the visitors had many other pressing demands on their time. Despite this they made the trip and enthusiastically participated. All too often one hears of self-interested entrepreneurs and financiers. I wish these critics could see what good this group of businesspeople did in the UK this week. Whilst writing this blog I want to especially thank Sherry Coutu (http://www.svc2uk.com/speakers/61) and Reid Hoffman (http://www.svc2uk.com/speakers/28), the main drivers behind SVC2UK. I really liked Reid’s comment that “Entrepreneurship is important because it is how you invent the future” and I think the future will be better because Reid, Sherry and their network made the time to selflessly share. Certainly my MyWorkSearch to-do list just got longer!

You can lead a horse to water but can you make it drink?

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Mixing metaphors, the elephant in the corner of outplacement is the extent to which job seekers accept and act on the guidance they are offered.  A good many do.  They take advantage of the knowledge and experience offered them and benefit accordingly.  But a meaningful proportion does not.  For reasons such as cynicism, depression, pessimism, disillusionment and lack of confidence they simply don’t engage with the process.  A negative spiral kicks in and the consequences can be long-term unemployment.

This is very frustrating for all concerned.  The people who work at my company, MyWorkSearch, and our competitors get up in the morning with the intention of helping job seekers.  We passionately care about the results we achieve and are saddened by those who don’t take the useful guidance that is made available to them.

This is the leading the horse to water bit.  But what about the drinking?

Last year, in October, I wrote about how we had identified this as an area we wanted to research (https://blog.alberg.co.uk/2009/10/23/the-job-search-conundrum/) and stated that I would return to this as a topic.  Since then we have made considerable progress.  Our research has helped us discover the areas to focus on and our design and development teams have made great strides in implementing improvements.  For example:

Usability is an area we have to work really hard on as if it is difficult or not obvious what to do next a proportion of people will give up.  We have transformed MyWorkSearch with a comprehensive redesign. We have looked at ‘user journeys’ and tried to eliminate the areas where a person can get confused and cease activities.

Allowing flexibility whilst providing the option of a guided route.  Some people want the freedom to self-serve our advice, content and tools.  Others want to be guided through a stepped process.  One size does not fit all and providing this choice removes usage barriers.

Sometimes there is provision for a person to assist individuals as they progress on their path to re-employment.  Knowing who is succeeding and who needs help is key to providing targeted assistance that makes the most of this expensive resource.  We therefore developed a reporting engine that allows a person to see who amongst a group is effectively using MyWorkSearch and the job seekers that would benefit from personal assistance.

The above are all hygiene areas.  They are the basics of a sensibly designed system.  Although they may not be easy to get right we know that they are essential for an effective online re-employment solution.  The area that has most long-term potential and goes above these quality foundations is our Nudge Engine.

Our Nudge Engine is designed to understand each job seeker as an individual and provide personalised guidance and prompts that nudge the person towards the best outcome possible.  Through understanding human psychology and statistics we can populate our Nudge Engine with rules that help each person get the most from MyWorkSearch.

We started work on the Nudge Engine a few months ago and it is about to go live.  We see these personalised small steps as the key to helping individuals succeed.  I will let you know how we progress.

Thrilled!

I have had a simply superb fortnight.  My colleagues and I work very hard to make MyWorkSearch a success.  We have to get very many things right, from product development to customer service to back office efficiency to revenue generation.  Drop the ball and a relatively new business such as ours can founder.

We submit for industry awards from time to time as it is a good external validation that we are getting things right.  A very important aspect of our service is the way we communicate knowledge to MyWorkSearch users.  It was therefore especially pleasing that we have been shortlisted in ‘The most innovative new product or tool in e-learning’ category in the 2010 e-learning awards.  We will discover in November whether we have won.

We are members of Microsoft BizSpark.  This is a superb programme run by Microsoft to assist technology companies in their first few years through providing a wide range of assistance.  Each year the UK BizSpark team organise a Summit and, as part of this, invite members to submit their business to a Dragon’s Den of experts who pick the best company.  This year 77 companies were entered and 6 were selected to present.  MyWorkSearch was not only one of the six.  We won!

The judges used the G/Score methodology to evaluate the businesses.  This provides a comprehensive framework to assess a business and results in a thorough appraisal of an organisation’s strategy, structure, commercial offering and achievements.

Earlier this year we were selected as the Best Business Startup in the European LinkedIn Business Awards.  It is great to see we are still on track.

My iPhone and what it has taught me about business

Many, many years ago, my first ‘mobile’ phone was built into my car.  My next one was a small briefcase that I hauled around if I needed to make calls.  Over the years phones got smaller but essentially they did the same thing: they allowed incoming and outgoing calls.  Then ‘smartphones’ emerged.  As well as making calls one could have a diary or run an application.  Whilst ownership of this type of phone provided some sort of geek bragging rights, the reality was that they did not work particularly well and were impractical to integrate with other computers and servers and thus were often more hassle than value.  The Blackberry was the first device to really make email easy and it integrated superbly well with Microsoft Exchange, meaning that my diary, calendar and email were always up to date on both my computer and my phone.   However, certainly in the early days, the Blackberry was a one-trick pony.  Other than the email suite, the device did not offer much more.  I played around with a number of Windows Mobile and Symbian phones but, despite being comfortable with technology, I always found them hard to use well.

Then I got an iPhone and I was blown over.  Every element of the user interface worked well.  It was thought through, logical and had great design.  It was a joy to use.  What was truly impressive was how Apple had created an environment whereby other developers could create applications to work on the iPhone that were doing vastly different things but despite this still functioned in a similar fashion and were intuitive to use.  No other device on the market managed to combine this flexibility with ease of use.  Rival capable devices were typically hard to use and each application had its own learning curve.  How was it that all those rival companies that had big R&D budgets, numerous talented engineers and the same customer research data had either failed to recognise the requirement or failed to deliver it?  What had no doubt been regarded as impossible had been achieved by Apple.

For a decade I have been running businesses that have invested heavily in creating software delivered business solutions.  I have observed that it is relatively easy to get developers who can write code that is reliable and indeed can engineer complex algorithms.  What is really difficult is creating a user interface that is a joy to use.  The wider the range of functionality the harder this is.  The more need there is to add an extra menu option or button or to create inconsistent operating rules that simply confuse users.  If a person’s hobby or career require mastery of complex software there is a chance that the individual will invest the required time to learn how to properly use it.  However most people are not this committed and they simply give up and either stop using the product or stick to a fraction of its real capabilities.

In February 2009 my company started building an online solution for outplacement.  MyWorkSearch was designed to provide the information a job seeker requires to manage their job search and the tools to assist the person in achieving this.  We spent over six months creating it and it incorporates considerable expertise and tremendous functionality.  Those who spent time using MyWorkSearch were extremely complimentary, however many also said that it was daunting.  Too many options, menus and features.  Unless one spent time getting to know the product one could find it overwhelming.  Over the next several months we made numerous improvements and this certainly helped matters, however it was clear we had no iPhone.  Our competition did not either, however this was not the point.  My colleagues and I felt that just because most people accepted that big software applications had to be complex, we should not.

So in December 2009 we started work on version 2 of MyWorkSearch.  We met with designers, usability experts and e-learning professionals.  We put together a team and have spent over six months intensively re-thinking MyWorkSearch and then implementing these new ideas.

On Sunday 11th July we will be upgrading to this new version.  I am so very, very pleased with what our team have produced.  We have been uncompromising in our efforts to push beyond functionality and achieve usability.  Whenever we have been stuck the iPhone has been a clear signal that the intractable does have solutions.  In a previous post I wrote about our observation that some users did not take full advantage of the resources we were making available and appeared to be giving up.  I hope that improving usability will make a difference to this.  We will be monitoring the outcomes and this is a topic I will be returning to.  Meanwhile I want to thank Steve Jobs and his team at Apple.  Sometimes it takes someone else to show that the bar was set too low.  As well as making a great phone Apple have also contributed to what is fast becoming the most powerful and effective tool available to those in career transition.

Virtual Operations

My blog entries are typically about the items at the time uppermost in my mind.  The fact that I have not written an entry for some weeks does make me pause for thought!

MyWorkSearch operates as a virtual organisation and in one of those weird coincidences as I was driving my car this morning I was thinking about the challenges that this presents and I decided to write a blog about it.  I arrived at my (home) office to be greeted by the news that those challenges had just ratcheted up by several notches as an important supplier has badly let us down.

When a small team of us started MyWorkSearch in February 2009 we wanted to keep overheads down and also have maximum flexibility.  There seemed little point in taking on the high fixed costs of an office at a time when we had no income and no certainty that our business would be successful.  Equally we knew that if the business prospered we might need to grow quickly and once again the fixed infrastructure of a conventional office could be an impediment.  So we decided to embrace technology managed for us by third parties.  Using a combination of cloud computing and outsourcing, all of our key services, such as customer database, email, telephony and file storage, could be provided by specialists and made available to our team irrespective of location.  Our costs would mostly be proportional to our usage and thus added expense would only be necessary as the company grew.

MyWorkSearch has done rather well.  Within six month of issuing our first invoice we had achieved over £1m in sales and monthly turnover, if maintained, would result in multi-million annual sales.  We have ten full time software developers and another ten people in assorted other roles.  All the while we have avoided taking office premises and operated as what is often described as a virtual organisation.

There have been a number of positive aspects from this approach.  I think the biggest one is that we have been able to hire excellent people irrespective of their location as our talent pool has not been limited by commuting distance.  Some benefits have been the flip side of a challenge.  In a central office one can often spot issues simply through management by walking around.  That does not happen in virtual organisations so it has forced us to think through our operations and document them.  We have been far more disciplined than many other small businesses would be and we believe we are well placed to embark upon ISO accreditation.  Another area often taken for granted is team communications.  In many businesses there are those ‘water cooler’ conversations where colleagues bump into each other and find themselves discussing an issue.  These unplanned meetings can be very effective.  We don’t have them in our company and we need to make the effort to speak and meet regularly.  A combination of regular conference calls, team meetings and away-days are our necessary alternative.

There are two disadvantages to our setup that we have not yet solved and both are about people.  One is that some people do not have domestic circumstances or a temperamental disposition that permits them to work from home.  The latter may be a preference or simply a recognition that without the disciplines of an office environment it is easy to get distracted and find that hours have passed with little actually done.  The other disadvantage is our inability to take on trainees.  We are of a size that we could take on an inexperienced person or two and through on the job training develop their talents.  So far we have not found a way of doing this when people work at a distance from each other.

The news I received this morning was that a supplier we outsource a proportion of our call handling and support to has let us down badly and we need to replace them unexpectedly and quickly.  This would not happen had the team been employed directly by us, albeit in a previous business we did experience the equivalent when some builders cut through the cabling to our office resulting in two days without internet or phones.  The good news is that we have documented processes that will significantly reduce the learning curve for a new supplier and our technology is set up so we can redirect calls and data to this new organisation.  However the lesson for us is to dig deeper into the business operations of our suppliers as I think that more diligence on our part would have avoided the problem.

Nowadays many businesses with a handful of staff operate virtually.  What we are doing is relatively unusual as most organisations centralise around a location once they have grown beyond this.  However I think that technology developments will make virtual operations far more commonplace for startups and I would welcome hearing from others who have experienced this and seen how other organisations manage the challenges and take advantage of the opportunities.

The New World of Outplacement

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I wrote an article for HR Zone on how I see outplacement changing and why we created MyNewJob.me.  As one needs to register to read HR Zone articles I reproduce it below.  I hope you find it of interest.  I am convinced that this is the way the market is going.

Outplacement is changing. What was once predominantly a service designed for a relatively small number of senior executives is now a mass market offering. The problem is that although the name has remained the same the available budget has considerably changed. No longer are several thousand pounds per person available. It is now, at best, several hundred pounds and as budget is trimmed, so too is the service provided.

What used to be fairly comprehensive job search support and guidance has been replaced by a brief one-to-one, attendance at several lectures, a few handouts and a pat on the back. A couple of years ago this would have been disappointing but not a major issue as job opportunities abounded. Now the world has changed. Each job seeker is competing with 50 to 150 others per role and with these odds, the enthusiastic but unprepared candidate is in for a rude shock. Numerous unacknowledged applications later, despondency sets in and it does not take that many months before a previously gainfully employed person becomes a member of the long term unemployed.

I don’t think it is realistic to call for larger outplacement budgets. A few years ago job losses were often the consequence of M&A activity and the overlaps created by a merger. Cash was abundant and outplacement was just one of the many deal costs that were accepted as one-off exceptional items. Now employers are shedding staff to cope with threatening financial pressures and the need to slash costs includes the overall severance budget.

Some years ago I was involved in the transition of recruitment from a largely paper based process to an automated and online one. It was fascinating to see an established methodology overturned by a set of technologies that transformed the speed, quality, consistency, efficiency and costs of a process. I believe that outplacement is now undergoing the same change and soon the process will be very different from what we have been used to.

The advice and guidance that has typically been provided by an outplacement consultant can now be received through on-demand e-learning. Many of the laborious tasks that a job-seeker has to undertake can now be automated.  Examples include searching for and aggregation of vacancies, or identification of relevant employment sources.  Wizards with attractive templates make CV creation considerably easier than used to be the case. Process automation means that job search activities can be tracked, reminders provided and reports generated. Triggers can monitor activity and provide encouragement and advice based on what a person has done, or indeed not done.

Effective outplacement can now be provided through technology. Clearly there are huge cost advantages. Also, unlike traditional outplacement online programmes can be swiftly scaled and there are no logistical challenges in commencing the service. There are also no practical limits on resource provision. With traditional outplacement service availability is rationed according to the budget, however a technology solution can be accessed 24/7 and provision is not constrained.

We have also uncovered some unexpected benefits. Most job seekers want to immediately ‘get stuck in’ and energetically commence their job search. An on-demand online process lends itself to this as individuals can use the service for as many hours as they want and do not need to wait for the next scheduled workshop. We are seeing considerable usage in the evenings as people at home do their research and create job applications.

Another characteristic that we had not predicted is control. Being made redundant can be a major emotional blow.  In addition to the worry about the future, someone else has decided that your job is coming to an end and you have to leave the organisation. This is a major loss of control. Traditional consultant delivered outplacement can reinforce this as the job seeker is once again thrown into a process and told what to do and when to do it. Having the assistance on demand as a web delivered service returns control to the job seeker. The individual can choose what to do, when to do it and how much to do. This is very important to a significant proportion of online outplacement users.

Of course it is not all plain sailing with online delivery. People made redundant typically want some human contact. This will often be a cathartic discussion of their plight rather than a practical job search process discussion. Another area is that a proportion of people are far less active in their job search than common sense and market knowledge suggest they should be. I am not sure that this is unique to an online solution. It may just be that with a technology platform there is the data on individual activity that does not exist with a conventional process.

I believe that the next couple of years will be very interesting for the sector. A slowly recovering economy will result in relatively high unemployment, job market volatility and competition for jobs. Large numbers of people will require assistance with their job search and technology will be the only way of cost-effectively meeting this demand. New and improved services will emerge and we will see innovation in a market that for many years has changed little.