Nov 19, 2021
The internationally acclaimed
has shaped a lot of the field of
behavioral economics. It has also spurred a whole other area which
one of its co-authors, Cass Sunstein, has written a new book about,
called Sludge: What Stops Us From Getting Things Done and What
To Do About It, which
released in fall 2021.
Sludge is everywhere in our
lives. So what is it and how do we reduce it? This episode of The
Brainy Business podcast is dedicated to all things sludge to help
you identify and reduce it in your business. In this episode you
will learn about: what sludge is and isn’t; a customer facing
example of sludge; a back-office example of sludge; how to quantify
sludge; and how to get others on your team on board with finding
and removing sludge.
No matter your size or industry,
I guarantee sludge is a problem in your business. Find it, remove
it, and enjoy the benefits. Listen to learn more about
- [00:06] Today’s behavioral
economics foundations episode is all about sludge.
- [02:23] Context and the way
choices are presented make a huge difference in what we find to be
most appealing. When the choices are presented in a different order
we might choose something else entirely.
- [03:32] When you use a tactic
to influence choice, we call that a nudge.
- [05:45] “Sludge is built into
the human condition, and we need to start to remove it, piece by
- [07:02] “Sludge hurts all of
us, but if you are sick, old, disabled, or poor, or if you don't
have a lot of education, sludge is a curse.”
- [08:07] Sludge is everywhere in
our lives. Melina shares examples of sludge.
- [10:34] “If sludge is
understood to consist of frictions that separate people from what
they want to get, the concept is not entirely
- [11:16] Much sludge involves
confusing administrative burdens requiring people to obtain
information, to figure out whom to call, to find out exactly what
they're supposed to do.
- [13:01] Sometimes it is good
for people to be confronted with a little sludge to prove they
qualify for a benefit or that they care enough to earn whatever is
presented, or that they are a good fit for a position.
- [13:30] In this episode I’m
going to give you a back-office example, a customer-facing example,
and some ways to think about quantifying the problem of sludge so
you can know its real impact
- [13:50] When it comes to
customer-facing examples, I like to start with the “buy now” button
- [15:12] In the buying process,
questions like “Are you sure?” or extra fields or steps can act
as partitions. Each new partition is a point where someone
will evaluate if this is worth it or if they should bail completely
or plan to “come back later.” Unfortunately, later often never
- [17:09] Removing the sludge so
you only ask what is absolutely necessary can help a lot more
people get over that first hurdle. Focus on each micro moment as it
exists and what is absolutely necessary.
- [18:23] You can turn the sludge
up or down as needed, but again I want to stress that most
companies have way too much sludge in the way of people doing
business with you.
- [19:41] My main piece of
advice: find the least amount of items you need to get someone to
move forward in this singular situation.
- [20:21] Melina shares back
office examples including expense reports, checking tools in and
out, and signing off on a change.
- [21:55] Melina shares her
experience when she first started at the credit union and changes
required a physical form to be completed by hand. (So
- [24:15] In the back office,
when you trust your employees, you can reduce the sludge and things
get done faster, for a lot less money than if you don’t have trust.
Work on trust and get rid of that sludge.
- [24:47] Because people get
stuck in the status quo, they often don’t feel like they can give
- [25:11] Sunstein gives an
example of quantifying sludge with TSA Precheck and shares how
quickly the value can add up.
- [26:40] When you take a minute
to quantify the lost sales or the minutes wasted by key staff
members, the initiatives that couldn’t be completed because of
wasted time, or anything else. It can add up incredibly
- [27:21] Sludge is a huge
problem in your business, I promise, no matter your size or
industry. Find it, remove it, and enjoy the benefits.
Thanks for listening. Don’t
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Android. If you like
what you heard, please leave a
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Get the Books Mentioned on (or related to) this
Top recommended next
episode: Friction, an interview with Roger Dooley
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book, What Your Customer
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