How Nudging Can Accelerate Digital Transformation in Your Finance Function
Have you ever tried to implement a new digital system or tool in your finance department?
Then you know how difficult it can be for your colleagues to adapt to using a new system, new procedures, and new habits.
To digitally implement a new tool is one thing but implementing it in everyday life at the office and getting your colleagues to use it is a completely different story.
When looking at the adaptation aspect of digitization in the finance function, nudging becomes an interesting method to consider.
If you want to know how you can accelerate digital transformation in your finance department and successfully implement new software tools, this blog is for you!
Nudging in a nutshell
Before we start explaining how to use nudging for accelerating your digital development, let us first explain what nudging means.
The term nudging covers the cognitive and psychological method of successfully and quickly creating a change in certain behavior. Nudging means guidance: Just like an elephant mother uses her trunk to guide her young calf to go in the right direction, communication and design can guide humans to make the right decisions.
Nudging originates from a political arena and is a way of defining our surroundings. It is a method for you to make measurable changes in people’s behavior within a certain group or area.
It is all about ensuring the right decision is an easy one to make. Let us look at the cognitive way to achieve this goal.
How to accelerate behavioral change in your department
When trying to implement new elements, systems, or procedures to the workflow, it’s imperative to get your employees on board with your idea of doing things smarter.
But it can be hard to adjust to new methods since we humans are very comfortable beings and like to do things as we have always done them. Thus, changing habits is a tough task.
To be able to change behavior, we need to look at how the human brain works. The human way of thinking is divided into two systems.
- System 1 is used 90% of the time.
- System 1 requires no conscious consideration; you can almost say it is an autopilot system for the brain that relies on habits.
- System 1 is the system we use when we quickly determine if an object is close or far away, if we have to answer to what 2+2 is, or when we react instantly to a terrifying photo or film.
- System 2 is used 10% of the time.
- System 2 requires conscious consideration; you focus and concentrate a lot on the task at hand when thinking in system 2. Using your brain this way requires a lot of energy from you since you cannot rely on habits to solve this task. This is also why you cannot be thinking too long in system 2. Eventually, you will be drained of energy and need to recharge.
- System 2 is the system we use when we have to come up with creative solutions to a problem.
In summary, to accelerate behavioral change towards digitization in your finance function, you need to communicate to your employees’ and colleagues’ system 1. It will make it easy for them to act and change behavior, opposed to if you communicate to system 2 which demands too much of the human brain to adapt to new work methods.
Implement guides and clues towards behavioral change into your daily routine
You should ask yourself: “What are the daily routines? How do we find a tool, develop a new procedure, or create a workflow that integrates well into this routine?”
Once again it is all about understanding that nudging is based on human instinct. So, when guiding your colleagues to make the right decisions, you should consider, how to make the right decision the easy decision to choose.
You can look at what makes your team engaged and how you can use those aspects in every day working life to change behavior, so they will use the new tools instead of going back and do things the old way out of habit. Let’s take the issue of low meeting attendance rates and see how guides put in the daily routine can improve this issue. An easy change to implement is to put in small reminders that will remind your colleagues to attend follow-up meetings. Even the smallest reminders will help support the change of behavior and gradually everyone in your team will adapt to the new working method. When you know how to implement new working methods into the daily routine, it is time to create the communication and design that is in line with what you have observed. It is through these means the real behavioral change is going to happen in your finance department.
To learn more about how to put together the right communication and design for guiding your team towards the right decisions, watch the webinar “How Nudging Can Accelerate Digital Transformation in Finance” today!