Cognitive Design

 It seems these days many people have avatars or digital versions of themselves (or how they want to be) that run around in virtual worlds, live in customizable video games or otherwise inhabit cyberspace. Below is the menu from Second Life for creating your avatar for that most popular virtual world.

What does the  personalization of an avatar reveal about us and how we think and feel?  I must decide what my avatar will look like, how it will behave (interact with others) and in some cases even evolve into other forms of life.

 From a designer’s perspective, can I study avatars to determine the psychographic profile (list of cognitive needs and tendencies) of their creators? If so, avatar studies could be a valuable tool for creating high-impact products and services using cognitive design.

I think this would be a wonderful Ph.D. thesis.

This work has already started. Two social psychologists from Northwestern have conducted a field study of avatars behaving in a  complex virtual world.  A key finding:

 “You would think when you’re wandering around this fantasyland, operating outside of the normal laws of time, space and gravity and meeting all types of strange characters, that you might behave differently,” Eastwick said. “But people exhibited the same type of behavior — and the same type of racial bias — that they show in the real world all the time.”  

Although it is disappointing that we bring our racial bias into the virtual world it is a signal that studying avatars will reveal something about the psychographic needs and profile of their creator. Further evidence:

 “This study suggests that interactions among strangers within the virtual world are very similar to interactions between strangers in the real world,”

Also see a Stanford study that shows our “need for space” (interpersonal space) and eye gazing behavior shows up in virtual worlds.  

Of course, further study is needed but the idea that avatar studies could be a new power-tool for cognitive designers has some scientific momentum.

For anyone interested in doing avatar studies, two researchers from Stanford have created a method and toolkit for doing Longitudinal Data Collection in Second Life. 

Our minds have two modes – automatic and manual.

In automatic mode we make instant decisions, take frequent and sometimes dangerous mental short cuts (cognitive biases) and run intuitively with very little conscious awareness and control.  Manual mode on the other hand requires attention and conscious mental effort to exert behavioral control, weight options, manage emotions and the like.

As Blink and other recent best sellers on the nature of thinking have pointed out, we pretty much live in automatic mode.  But as David Meyer’s claims in his book, Intuition: Its Power and Perils, we generally don’t believe that:

“The big idea of contemporary psychological science is that most of our everyday thinking, feeling and acting operate outside of conscious awareness is hard for people to accept…”   

For a good summary of the book look here. 

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In an earlier post I highlighted American Express’s One Card, a program that lets you save while you spend.  Amex contributes 1% of whatever you spend and deposits it in a high-yield savings account. This was rather a clever way of defeating the cognition that blocks our ability to save namely, the overpowering desire to consume and the fact that we tend to under value savings we will have in the future.

Bank of America (BOA) has introduced a related product  called keep the change. The idea is when you spend whatever change is left from rounding up to the nearest dollar is automatically put into your savings account.

 BOA matches every dollar you save for the first three months and then 5% after that for a total of $250/yr.  They even provide a simple calculator to let you estimate your savings.

I heard on the radio the other day that over $1B has been saved by customers. Interestingly, BOA has filed a patent to protect this unique product idea.

This is like a 401(k) plan with a systematic withdrawal of your own money sweetened with someone else making a matching contribution. Feels more like a savings plan than the One Card which feels more like a cash back card.

No matter, both are excellent examples of taking deep cognitive biases and leveraging them to our benefit.

Cognitive biases erupt when we take the reasoning processes, rules and tricks that work so well  in one domain and apply them to another where they don’t fair so well.   An interesting example is described by Robert Britt in his LiveScience article Monsters, Ghosts and Gods: Why We Believe.

A key point from the article: 

“Brian Cronk, a professor of psychology at Missouri Western State University. “The human brain is always trying to determine why things happen, and when the reason is not clear, we tend to make up some pretty bizarre explanations.”

 Although not called out as a bias, it clearly is.  Monsters are a byproduct of our cognitive need to make sense of the world.

  Cognitive biases are short-cut ways that we use to perceive the world, make decisions, solve problems and behave in social situations. They are rules of thumb for dealing with complex situations fast and effectively. Turns out that when we use them outside the area they are intended for (and we do this all the time) we make systematic errors. This is why we can look and behave so irrationally.    

Researchers have documented a wide array of cognitive biases. Check out the list of 100+  cognitive biases that Wikipedia has complied.  In cognitive design, since we are concerned with designing things for how minds work, we must understand which cognitive biases are at work in our application and how we plan to manage or paternalistically leverage them.

A classic example is the Save More Tomorrow pension plan that lets you save some portion of a future raise (rather than your current money) out of respect for our bias to undervalue future resources and over value current resources.  Turns out emphasizing what you currently have (a bird in the hand is worth to in the bush) is a great strategy except when it comes to savings. Vanguard Investments has taken this idea even further with their Autopilot 401k  savings plan that is designed to accommodate all the latest findings in behavioral finance.    

Cognitive biases are hot. Best selling or popular books focus on them – Freakonomics, Blink, Gut and many others.  A recent addition to this list that I just finished is Sway: The Irresistible Pull of Irrational Behavior.  The authors provide many detailed stories that illustrate three common biases including loss aversion (over valuing current resources), diagnosis bias (inability to rethink our initial assessment of something) and the chameleon effect (taking on the behaviors and properties that others have attributed to us).  I am recommending this book to designers as a good way to sharpen your instincts for detecting and dealing with cognitive biases as a constraint and sometimes enabler in the design process.

 Cognitive biases are strong (some say hardwired) tendencies to process information, think or interact in ways that can (but don’t always) create systematic errors.  Well known cognitive biases include the confirmation bias (I seek out new information and ideas that support my current beliefs) and the halo effect (I tend to judge all aspects of something based up one or two dominate characteristics that overshadow the rest). There are dozens of interrelated biases that have been documented and many studies that illuminate them at work in how doctors think, investors make decisions, people chose mates, teams function (or not), managers hire employees, consumers make choices and many other domains.  

   Effective decision-making requires managing cognitive biases especially in high stakes situations.  This point was made vividly by Phil Rosenzweig in his recent book the Halo Effect  and the eight other business delusions that deceive managers.   The book highlights the role that cognitive biases and other systematic errors in thinking have played in our attempt to understand and improve the performance of organizations. He outlines nine such “delusions” about high performance organization, including the halo effect: 

   “The tendency to look at a company’s overall performance and make attributions about its culture, leadership, values and more. In fact, many things we commonly claim drive a company performance are simply attributions based on prior performance.” 

   Just as we have a bias to think that good looking people must be smart, have an interesting life, or be successful, we think high performing organizations must have strong cultures, good leaders or the right values.   He quickly dashes our hope that research could settle the question (Good to Great, In Search of Excellence, etc.) by arguing the professors and consultants that do the research fall prey to other types or errors in reasoning including for example, confusing cause and effect (or correlation and cause). So does employee satisfaction generate organizational performance or does organizational success generate employee satisfaction? We are often told the former when it fact some research shows the latter. This would mean our attempts to improve organizational performance by focusing on employee satisfaction (a popular thing to do) could be wrongheaded. This does not mean we don’t want to focus on employee satisfaction but doing so under the theory that it will drive organizational performance may be more of the halo effect, or confusing cause-and-effect than anything else.  

  If  Rosenzweig is right (I have seen all the delusions he quotes in action in many different circumstances) then our inability to manage cognitive bias has wrecked (or at least limited) our ability to improve our organizations through research and managerial will.

  We need a more detailed understanding of the role that cognitive biases play in organizational improvement and then we can use that understanding to “design against” them in our research and implementation work. 

I recently gave a talk to a group of HR/OD professionals at a Fortune 200 company on what cognitive design can do to enhance organizational effectiveness. One topic that really caught fire was how to redesign (from a cognitive perspective) the HR and management policies in large organizations. As organizations mature policies that are put into place (on how to make decisions and what behaviors are appropriate) can easily evolve into a web of rules, revisions and exceptions that borders on the complexity of the  U.S. tax code.  In such cases the policies create a massive cognitive load on the organization.  Non-compliance, decision errors and unintended consequences can be common place.  On the other hand, a well designed set of policies can make a fundamental contribution to the profitability and competitiveness of the firm.

Cognitive designers can help by emphasizing policies that:

1. Can be applied in a way that fit how managers and employees think (low cognitive load)

2. Safeguard against cognitive biases in managerial decision making

3. Naturally reflect the principles at work in the culture.

Expanding on the first point, policies that fit the way people think typically:

• * Provide examples that contain the answers to the most frequently encountered case – this lets me “blink” or reason by pattern matching.

• * Are resolved by “one good reason” – this lets me make single factor decision the simplest decision heuristic.

• * Invoke sequential reasoning or “rules of thumb” applied in a specific order – this lets me take a cookbook approach and avoid complex branching logic that overloads.

• * Use prioritized and binary branching logic – this lets me work through a complex decision space in otherwise  “fast and frugal” way by answering yes/no questions with the important ones asked first.

These guidelines, based on the last 20 years of research in naturalistic decision-making,  represent increasing degrees of cognitive load including, blinking (no thinking), single rule reaction (little thinking or no thinking), sequential reasoning (little thinking if rules are simple and have a natural order) to more complex decision making.   

The rules-of-the-road for making decisions at a traffic intersection is a good example of a single reason sequential decision making design. You know the story – if a policeman is directing traffic you follow their hand signs. Baring that and given a traffic light you obey that. Absence direction by a policeman, traffic light (or sign) the first person to the intersection has the right-of-way and so on.   All the rules are based on a single factor and are executed in sequence. It would be easy to overcomplicate the situation and design policies for age of the driver, size or type of vehicle, time of day and an endless series of other important sounding variables.  The result would be a lot more accidents and delays.

The rules-of-the-road example also illustrates how policies can reflect principles at work – in this case by respecting authority and being courteous. Linking policy to values (aka principles) in a natural way increases alignment and lowers cognitive load even further.

These cognitive design guidelines can be applied to the development of any type of policies or rules meant to shape behavior and decision-making. They don’t tell you what the policy should say but instead emphasize how it should be said (structured) to make sure they fit with the way our minds work. A body of policies or rules is an artifact that should be designed to support and enhance cognition.

Designs that return us to the past are having a growing impact. Retro design intentionally resurrects or recycles an artifact from the past feeding nostalgia and triggering reminiscing in consumers.  We see retro designs in cars, buildings, furniture, websites, movies, fashion, restaurants, advertising and almost everything in our culture. Retro design shows no signs of being a fad but is morphing and expanding, reflecting a fundamental and perhaps unquenchable consumer need.

This consumer need is infact a cognitive need generated from  the longing for the past often in a romanticized or idealized form (nostalgia). As an emotional state, nostalgia serves several important psychological functions including: reinforcing our sense of self, regenerating meaning and strengthening social connections (see this excerpt from the handbook of experimental existential psychology).

Remembering the past – even if we reconstruct it a bit to meet psychological needs – can be a bittersweet experience. Invoking it can create a state of cognitive dissonance (holding two or more conflicting beliefs or emotions at once). For example, a product might be designed to remind you of the happy times you had with your grandparents but at the same time remind you that they are no longer alive.

Retro design plays off of (paternalistically we hope) a strong cognitive bias held by most people – “remember the good old past”.  Longing for the past, seems to be so strong that we will buy into any past even if it is not part of our experience. Specifically, younger people will buy retro products rooted in artifacts from earlier generation’s experience. This means I will be pulled in by the retro effect even if what is being recycled was not part of my personal childhood or earlier life experience.  Paul Grainge calls this the “aestheticization of nostalgia”. Something satisfies my longing for the past  if I can recognize that it comes from a stylized past - it does not need to be part of my personal past.

Reminiscing goes a step further in that it allows me to relive or remember personally experienced episode from my past. So the retro design of the new Ford Mustang might remind me of my first car and the time I….  This invokes another powerful cognitive effect – Savoring. In this case I am savoring the past which can put me in a state of pleasure, pride, gratitude or even awe.  

So what are the implications for the cognitive designer? When using retro effects we should:

1. Be clear what unmet cognitive need we are trying to satisfy (opportunity to tell my story, relive sense of pride from earlier time, discharge longing for the past, etc.)

2. Decide between reminding users of “the past”, something in the past, or something in their past

3. Support the reconstructive aspects of memory (romanticizing the past) in ways that lead to optimal cognitive functioning

4. Manage potential cognitive dissonance (bittersweet memories) to ultimately help the user savior the past 

Retro design hold the potential for creating rich cognitive states that transform otherwise ordinary artifacts into vivid personal experiences.

 There was an excellent article yesterday by Shari Roan, a staff writer for the LA Times, Cue the Gluttony, on the role of environmental triggers in Americans’ overeating. 

Part of the argument is that we are hardwired to overeat so when we are in an environment that offers easy access to giant portions, a constant flow of snacks and drinks and specially designed flavors, smells, packaging and displays that say “eat” most of us will get fat.  Cognitive design has played no small role in getting us into this problem. Consumer research pulls on the latest findings in cognitive science to influence our behaviors and choices. It has been especially effective with food.   

Most of the experts quoted in her article call for changing the environment to help elevate the problem, after all as one expert said, “it is easier to change the environment than it is to change people.”  In this way we might be able to design our way out of obesity with the right regulations (e.g. portion size restrictions), package designs (e.g. 100 calorie packs) and environmental designs (e.g. no fast food outlets in High Schools).  

These ideas will in fact lower the mental work I have to do to influence and ultimately control my eating behaviors. Lowering cognitive load is good cognitive design. The concern is that it limits public choice and business freedoms (which we often do for the public good). It also does not really get at the core of the problem. 

The core problem is that many in the US are unable to influence their own behaviors (self-regulate) sufficiently to maintain health, happiness and financial security.  Not just eating but exercise, drinking/drugs, following treatment plans and other health-related behaviors are clearly outside of individual control. Indeed this is a driver the bulk of the cost problem in healthcare. Further, I over spend for a lot of the same reasons I over eat and therefore threaten my financial health.    When you stack all these up the strategy to re-engineer our environment to compensate for failures to self regulate becomes something we want to approach very cautiously. 

A complementing strategy is to use design to support and enhance the ability of consumers to self-regulate (influence their own behaviors) despite the well-engineered temptations that are everywhere in the environment.  I am not talking about designing healthly choice alternatives (although that is essential) but more about using a deep understanding of cognitive science to develop programs that build our self-regulatory strength.  We need to restore our capacity to act as captains of our own ships – that is how we design our way out of obesity and other lifestyle problems. 

The question is what is known about the cognition of self regulation and how can we use it to better influence our choices and behaviors in tough situations?

For many Americans the cognition (or thoughts and emotions) involved in spending money are far more enjoyable than the thoughts and emotions involved in saving for retirement. We have a strong (some say overpowering) cognitive bias towards spending rather than savings.  Look at the level of consumer debt and the looming savings crisis and it is safe to say this bias is running us into serious trouble. 

For many consumers, telling them not to spend in order to save and avoid trouble down the road is not enough.  An alternative strategy is to design savings products that work with the cognitive bias rather than ask them to try and fight it .

A great example of this is the American Express One Card.

As of this writing you get 1% of your purchases deposited in a high-yield (5% APY) savings account with no fees. So you literally automatically save while you spend. Note this is very different than a card that gives you cash back. If you get cash back and you are a spender, you will spend it not save it. This card is linked to an FDIC-insured savings account that you can even make extra deposits to if you want.

There is a powerful cognitive design principle at work here. 

When it comes to designing programs or products that require behavior change, make the new behaviors an automatic consequence of something the customer already does (or is very willing to do).

Is this not what lottery tickets do? Consumers hate to pay tax but will gladly do it to buy some hope/excitement of winning big.