‘Social norms’ are a powerful (and overlooked) compliance tool

In a previous post “Who’s to Blame? The Apple or The Barrel?” I looked at the origins of ethical failures from a person-situation perspective. The research has consistently shown that unethical behavior is not the case of a few bad apples. Although assigning the responsibility to “rogues” is a simple and intuitive approach, it doesn’t take into account an important aspect — the “barrel” in which “apples” operate.

Behavioral science tells us that contextual influences have strong power over individual behaviors. Why? The answer may lie in the way we think.

You have probably heard of “System 1” and “System 2” thinking. Nobel Laureate Daniel Kahneman, the author of this important psychological concept, characterizes human cognition as having two parallel processes. System 1 thinking is our intuitive system of processing information: rapid, largely automatic, and driven by processes including habit, emotion, and social influence.

System 2 is slow, conscious, reflective, and most resembles what we think of as “rational choice.” Every day we are bombarded with stimuli, and so we have evolved to prioritize cognitive efficiency and use System 1 as a tool for the vast majority of decisions we make. It turns out that these fast and automatic processes shape our lives profoundly in far more subtle ways than we appreciate.

Though System 1 thinking helps us make daily decisions with minimal effort, it also renders us susceptible to cognitive biases including status quo bias (gravitating towards the familiar), loss aversion (preferring to avoid losses rather than to acquire equivalent gains) and intuitive rules of thumb.

Another important consequence of the reliance on System 1 thinking is that we blindly follow the crowd and adopt their norms. Therefore, the environment within which we find ourselves plays a significant role in shaping our decisions and choices. This understanding underscores the importance of context and environment and re-gears the issue of unethical conduct away from “good” or “bad” individuals to “good” or “bad” systems in which individuals operate.

Indeed, behavioral interventions that change the social setting have proved more effective than those that target “internal” motives of individuals. In a field experiment in the UK, the researchers have tested the effectiveness of a social norm message against the message that highlights the enforcement process for collecting local government taxes. The social norm letter included the phrase “96% of Medway Council Tax is paid promptly. You are currently in the very small minority of people who have not paid on time,” whereas the enforcement letter outlined the legal action and costs the debtors would be subject to if they did not pay. The social norm message was almost twice as effective as the enforcement salience message.

These results further illustrate the profound role social norms play in governing our behavior. As compliance practitioners, we need to reflect these dynamics in our ethics & compliance programs and address non-conscious decision-making processes in our policies and training programs. Behavioral interventions designed to leverage the influence of social environment have enormous potential and should be, therefore, introduced to the compliance toolkit.