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Nudge Theory in Action: Lessons from the Kraft Heinz Company

In our recent webinar, "Nudge Theory 101: The Surprising Science of Small Changes," experts from The Kraft Heinz Company and Perceptyx explored the world of nudge theory — an area in which behavioral science leader Humu, acquired earlier this year by Perceptyx, has created a pioneering solution. This behavioral science methodology, designed to be seamlessly integrated into workplace technology like Microsoft Teams, offers a scalable, high-impact, yet simple-to-adopt approach to driving action and fostering organizational transformation.

The session, available on-demand, featured Rachel Dillon, Head of Leadership Development at The Kraft Heinz Company, and Kira Foley, Ph.D., Behavioral Scientist at Perceptyx. Together, they unpacked the history and core concepts of nudge theory, providing attendees with a comprehensive understanding through tangible examples, a compelling case study from Kraft Heinz, and a simple yet effective framework for driving behavior change.

Here are some of the highlights of that conversation. 

What Is a Nudge?

Foley took a deep dive into nudge theory, a concept developed by behavioral economists Richard Thaler and Cass Sunstein, which earned Thaler a Nobel prize in economics. "Nudge theory is the idea that in each choice, whether you knew it or not, you were nudged in a certain direction," she stated, emphasizing the significance of how choices are presented to us and the environment around those choices.

Foley elaborated on the nature of a nudge, clarifying that it is meant to alter choice architecture in a way that promotes people's best interests. Effective nudges should be optional, require minimal action, and make one path easier to follow. She cited examples from everyday life to illustrate how consumers are often nudged in their decisions: "Everyone has grabbed some candy quickly at the counter of a convenience store, bought a discounted item that wasn't on your list because it was on sale, or bought cereal placed at eye level instead of doing the extra work to search for the cereal that you typically get."

One of the more detailed examples Foley provided was related to 401k retirement savings, a context where nudge theory can have significant positive implications: "Most of us could agree that it's a good decision for us to set aside money away for our retirement. Yet concerningly high numbers of people do not put enough money in their 401k to cover their retirement costs." 

Foley continued, describing the process of implementing a nudge in this context. "The target behavior is increased retirement savings... and often employees are less inclined to sit down and really think about their elections. So what are the best practices we could apply in this situation to nudge people to contribute more to their retirement accounts?" She proposed a solution through nudge theory: "A great one would be creating a new, higher default." This approach, she explained, aligns with higher savings, making it more likely for employees to save more for a healthier retirement budget.

Foley also discussed the ethical principles outlined by Thaler and Sunstein for behavior change programs based on nudge theory. These principles assert that nudging, when done correctly, should help people act in their own best interest, be optional, and require minimal action: "A really good nudge is nearly undetectable and becomes your new default mode.”

From there, Foley proceeded to discuss how nudge theory is applied in the workplace, particularly at Humu and now Perceptyx. "Each of our nudges recommends solidly backed recommendations for behaviors backed by behavioral science," she explained. These nudges are tailored to specific job types and levels and are delivered in the flow of work to ensure ease of adoption and relevance.

She detailed the FEAST framework — which stands for Fun, Easy, Attractive, Social, and Timely — that is used to create impactful nudges. Examples of workplace nudges were shared, highlighting how they are designed to be easily skimmed and applied within a workweek, focusing on enhancing productivity and well-being.

Nudges in Action at Kraft Heinz

Rachel Dillon offered detailed insights into the implementation and impact of nudges at Kraft Heinz. "We've seen a significant improvement in areas such as employee support and managerial development through engaging with nudges," she stated. 

Dillon elaborated on how nudges have facilitated behavior change at Kraft Heinz, aligning employee actions with the company's strategic goals. "Our conversations around nudges started at the end of 2021," she said, highlighting the fast-paced nature of their industry and the diverse challenges faced by their managers during this post-pandemic period, including hybrid work arrangements and supply chain issues.

Kraft Heinz had an important rationale for adopting nudges: "What hadn’t yet happened was a full-scale change management effort to embed our leadership principles and behaviors in our people," she noted. Dillon shared Kraft Heinz's leadership principles — "We work as a team, inspire excellence, and navigate our future" — and elaborated on how these principles guided the customization of the nudge program. "We wanted to cull from the existing nudge library to support our specific leadership principles," she stated, explaining how they tailored nudges to reinforce these principles among managers.

For Dillon, nudges were a precise, personalized coaching tool that worked alongside other organizational efforts to drive leadership behavior: "We see them really as complementary to all the other work happening across the organization to drive our leadership behavior." This approach aimed to support managers in fostering the specific behaviors needed to nurture their teams and grow the business.

The integration of nudges into the flow of work at Kraft Heinz was a critical feature, with the most popular nudges at Kraft Heinz focused on conversation support for career development. "These are the most widely-used nudges at Kraft Heinz right now," she shared, illustrating how nudges were being utilized to facilitate key moments in the talent and development lifecycle.

The Impact of Nudges at Kraft Heinz

Dillon also shared compelling data on manager engagement with nudges. "Most of our people managers are engaged with their nudges on a daily basis. 85% of these managers are in the top two categories of engagement," she reported, indicating a substantial level of interaction with the nudges. Furthermore, she revealed that managers who regularly engaged with nudges were more likely to be rated highly effective by their direct reports. The small minority of managers (7%) who did not regularly engage with nudges were rated by their direct reports as needing support 2.5x more often than those managers who engaged with nudges.

The nudge program has since been expanded beyond people managers to encompass the entire salaried population at Kraft Heinz. "We have scaled now to where our entire salaried population receives nudges," Dillon said, sharing encouraging statistics about the correlation between nudge engagement and increased overall engagement. "We saw that those job functions that were consistently active or ‘active plus’ at 70% plus their engagement went up by an average of three points."

Finally, Dillon shared verbatim responses from a rolling pulse survey, demonstrating the real-life impact of nudges on managers' actions. "They're directly connected to nudges these people have received," she observed, showing how nudges were being internalized and reflected in managers' behaviors. "In other words, you can see that they are internalizing them. Maybe they couldn't harken back to an exact nudge, but they are internalizing the nudges they receive and we're seeing those behaviors and actions come to life."

Tips and Tricks for Implementing Nudges

Throughout her comments, Dillon underscored the importance of leadership endorsement and visibility in adopting the new approach. "Our CPO was talking about nudges from global town halls,"  she said, highlighting how top-down communication played a vital role in creating buzz and acceptance for the nudge program. 

Inspiring leaders to talk about and share their experiences with nudges was key to the program's success. "People are taking screenshots of their nudges and sending them around in Teams chat or just forwarding their favorite nudge to their employees," she said, illustrating the organic spread and endorsement of nudges within the organization. Dillon believes nudges have worked well in part because they fit within Kraft Heinz's innovative culture: "We like to be early adopters of things... Here's something cool that we're trying for you." 

Various communication methods have kept nudges in the forefront, from functional engagement councils to direct emails from functional leaders. Dillon described how leaders would share their favorite nudges and their real-life applications, thereby demonstrating their practical value. Personalization also mattered: "We have an integration with Microsoft Teams, which allows the nudges to stay out of your email if you so choose." This integration facilitated the delivery of nudges directly in the workflow, making them more accessible and less intrusive. 

Addressing potential nudge fatigue, Dillon described it more as an "ebb and flow, because there are certain times in our business cycle where people aren't reading many of their emails, let alone a nudge email." To combat this, Kraft Heinz would adjust the focus of nudges or boost specific topic areas at strategic times. On the frequency of nudges, Dillon clarified, "They typically come every other week, so it is not in your face at all." Most importantly — at least from a cost standpoint — managing and scaling the nudge program does not require a full-time resource. 

To dive deeper into Kraft Heinz’s use of nudges, watch the full on-demand webinar.

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