Why Psychology’s replication crisis is good for business

crisis-in-business.png

More and more these days, companies are turning to Psychology and the Behavioural Sciences for deeper insight into what makes the minds of their clients, employees and managers tick. There have been a host of reasons for this: an ever increasing amount of competition causing a shift to a more client-centric approach to business, the rise of big behavioural data, less trust in standard economic models, and, of course, the rise of behavioural economics, pulling all its intersecting fields up with it. While it has been encouraging to watch interest in findings from these fields grow over the last few years, a concern of mine has been the approach to application. I often hear business managers talk about how they want to implement findings from studies they've read about in Nudge and Predictably Irrational straight into an existing service offering, or to create an entire campaign around them.

This lever-like approach frames behavioural insights like universal laws of physics instead of subtle, contextually-dependent theories. There are so many complex interactions and crowding-out effects in any particular environment that hoping behavioural insights like social proofing or loss aversion will always act like silver bullets is not just an ineffective approach, it could actually do more harm than good. Context matters!

This is why I am enthusiastic about the recent ‘replication crisis’ in Psychology. What it has shown, more than anything else, is that small changes in the experimental environment can have a huge impact on the outcome of a psychological study. In other words, even if 99% of the controls are the same, the slightest variation could lead to the theory being viewed in a very different light. Even from ‘success’ to ‘failure’, so to speak.

By shining the spotlight on this idea, my hope is that the current lever-like approach to applying behavioural and psychological insights will gradually be replaced by a more responsible position, where managers don't treat these ideas like silver bullets, but rather hypotheses that first need to be tested on sample groups, in the particular contexts that a business would like to implement them in.

Building a culture of testing is a complicated and challenging project but, in the long run, it should increase the amount of big business decisions being made correctly and encourage an environment of creative experimentation leading to more innovation, differentiation and holistic, informed business growth and success. I'd like to think that is a hypothesis well worth testing.

For more on the replication crisis in Psychology take a look at the articles below: