Bob Nease on eliminating the “intention/behavior gap”: Part 1 of an interview by Bob Morris

Nease (M)Bob Nease received his doctorate from Stanford University, where he studied methods to improve medical decisions made by doctors and patients. Before joining Express Scripts in 2001, he was an associate professor of internal medicine at Washington University in St. Louis and an assistant professor at the Dartmouth Medical School. He recently retired as the Chief Scientist at Express Scripts, a Fortune 25 healthcare company dedicated to making the use of prescription medications safer and more affordable. As a leader in the convergence of consumer behavior and healthcare, he was responsible for advancing the Express Scripts behavior-centric approach to the pharmacy benefit. He is the author of more than 70 peer-reviewed scientific articles, and inventor on six US patents.

Over the past several years, Bob has emerged as the nation’s expert on the application of behavioral sciences to health care. He has now turned his attention to equipping others to make practical use of those insights in applications beyond health care — at work, at home, and in the community. His book, The Power of Fifty Bits: The New Science of Turning Good Intentions into Positive Results, was published by HarperBusiness/An Imprint of HarperCollins (January 2016). He and his wife Gina split their time between Phoenix, Austin, and their farm in rural Italy.

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Morris: Before discussing The Power of Fifty Bits a few general questions. First, who has had the greatest influence on your personal growth? How so?

Nease: My family, no question about it, and especially my wife, Gina. If you do personal relationships right, you won’t paper over areas that need improvement and change. I am very fortunate to be doing that work with a small number of people who are rooting for me, and for whom I am rooting.

Morris: The greatest impact on your professional development? How so?

Nease: It’s a three-way tie. My thesis advisor at Stanford taught me how to strip complicated problems – ethics, politics, business strategy – down to their very essence. That’s an incredibly powerful skill in any setting. My colleague and coach at Express Scripts, Larry Zarin, taught me the strategic power of storytelling, to never overshoot the target, and that success comes with performance over time. And Barrett Toan, the founder of Express Scripts, hired me when I’d lost interest in academics. He turned me loose on all sorts of interesting healthcare problems I might not have gotten to work on otherwise.

Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Nease: To understand this story, you need to know that my formal training is in decision analysis. You can think of that as applied classical economics. People are supposed to make decisions that are rational and advance their interests. I’d been applying this discipline at Express Scripts for a few years, trying to get patients to make better decisions via education and more aggressive incentives. And frankly, the results were modest at best.

Then my wife and I visited Atlanta, and went out to dinner with friends. It was clear that we were going to split the bill at the end of the evening, and everyone was being well behaved in terms of what they ordered for dinner… except for this one guy, named Jack. Jack drank faster than everyone else and ordered a really expensive dinner. I was infuriated; his selfish behavior was coming at a direct cost to every other well-behaved person at that meal. As I drove the rental car back to the hotel, I gripped the steering wheel until my knuckles turned white and the vein in my forehead throbbed.

And then it struck me: Jack was simply behaving according to the principles of classical economics. He ordered $50 more of stuff than the average. There were ten people at the dinner, so his cost was just $5. That’s a 10X ROI and a payback period of two and a half hours. Any CFO would applaud that kind of performance.

So here’s the epiphany: it was because of that dinner that I realized that despite having a doctoral degree in how people are supposed to make decisions, my gut overwhelmed my head. That’s when I realized that most people don’t run the numbers to make a decision. Instead, they behave according to some other set of rules. I wanted to know whether we could reshape the environment in which our patients lived to harness those forces and achieve more positive behaviors. That evening with Jack profoundly changed the course of my professional life.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Nease My degrees came out of engineering schools. Engineering taught me a systematic way to take problems apart and come up with solutions. That’s been extremely useful.

Morris: What do you know now about the business world that you wish you knew when you went to work full-time for the first time? Why?

Nease: The org chart doesn’t capture the true importance of the players. You need to figure out the “influence chart.”

Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.

Nease: I love movies like Apollo 13 and more recently The Martian. For me the main message is that every problem has a solution, and the solutions are often elegant in a rag-tag sort of way. I also admire Chariots of Fire because it’s a reminder that there’s no replacement for raw passion. Do what you’re built to do, and do it with everything you’ve got.

Morris: From which non-business book have you learned the most valuable lessons about business? Please explain.

Nease: Do the assembly instructions from IKEA count? Work hard to make things as simple as possible while getting the job done.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-tse’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Nease: Great leaders take less credit for successes and more blame for failures than the facts indicate. Do that, and your team will follow you anywhere.

Morris: From Michael Porter: “The essence of strategy is choosing what [begin italics] not [end italics] to do.”

Nease: My mother told me that I could do anything I want. Porter’s saying we can’t do everything we want. Focus is critical.

Morris: From Richard Dawkins: “Yesterday’s dangerous idea is today’s orthodoxy and tomorrow’s cliché.”

Nease: It’s inspiring, but licking a frozen doorknob seems like a pretty dangerous idea every day of the week. The trick is to know when things are changing so much that trusted assumptions no longer hold.

Morris: From Isaac Asimov: “The most exciting phrase to hear in science, the one that heralds the most discoveries, is not “Eureka!” (I found it!) but ‘That’s odd….’”

Nease: “Eureka” is how we remember “That’s odd…” moments long after they pan out.

Morris: From Thomas Edison: “Vision without execution is hallucination.”

Nease: The first creation is the one we do with our minds. The second creation is the one we do with our hands. Callouses show up on hands, so I’ll let you infer which one takes more work.

Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Nease: Make sure your ladder’s leaning on the right wall before scaling those rungs.

Morris: In one of Tom Davenport’s recent books, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?

Nease: If the errors are bell shaped, then the “wisdom of the crowds” approach can lead to some really impressive results. There are other ways to improve decision making, however. For example, it’s easier to add two large numbers by stacking one on top of the other, starting with the ones column, adding the two digits, carrying to the next column if needed, and moving to the left.

That’s a way of breaking one big opaque problem into a bunch of smaller, transparent problems. If done right, that approach will do no worse than the group consensus, and is probably a lot more efficient. So I think it depends quite a bit on the nature of the problem, and I think great leaders are really good at understanding the nature of the problems they’re facing.

Morris: The greatest leaders throughout history (with rare exception) were great storytellers. What do you make of that?

Nease: As a species, we’ve spent a lot of time around a “campfire” in one form or another, and without the benefit of a written record. We’re built to communicate, coordinate, and cooperate and for a long time that’s been done via story.

Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”

Here’s my question: How best to avoid or overcome such resistance?

Nease: Machiavelli said, “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” There’s no question that change is really hard to pull off.

I have two thoughts here. First, most organizations will react with an immune system-like response if the magnitude of the given change is great enough. By taking small, constant steps over time you do two things: you stay below the threshold of the knee jerk response, and the organization starts to view change as part of the status quo. Second, if you don’t have time to make change slowly, reframe the status quo as something that can’t last. Put it on the “endangered list.” That makes change something needed to protect the status quo rather than a step away from it.

Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any advice?

Nease: Health care is still front and center because we haven’t done much to moderate costs, and I don’t see any major changes coming out of Washington. Leaders want their employees to be healthy but it’s tough for them to be on the hook for a production input whose cost is rising faster than profits and whose benefits are not easily measured. But the safe bet in terms of a challenge over the next three to five years is what’s been a challenge for us in the past, and that’s behavior. Employee productivity, consumer engagement, new sales, customer retention… behavior is mission critical, and if you get it right, it’s a big deal.

Morris: Of all that you have learned from your extensive involvement in the medical community, which lessons or insights have proven to be most valuable to your career thus far? Please explain.

Nease: The two biggest lessons are connected. First, we think we know a lot more than we actually know. For example, for a long time we thought that hormone replacement therapy for menopausal women was beneficial because blood cholesterol changed in a way that looked promising. It turned out that those changes in cholesterol didn’t lead to better cardiovascular outcomes. Similarly, for the longest time, we thought stomach ulcers were due to stress and eating the wrong foods. It turns out that most ulcers are the result of a specific bacterial infection. Conventional wisdom was both plausible and wrong.

Second, when it comes to health care, doing more isn’t always better. There is a huge amount of waste and harm in medicine because we often overshoot the target, and assume that the benefits of medical interventions exceed the risks and costs. That’s just not true, and it’s not true to a very large extent.

The lesson here is that we need to test our assumptions from time to time. Great leaders live in a sweet spot that balances confidence with humility. It takes both to be willing to test deeply held assumptions, and to pivot if and when they no longer hold true.

Morris: Of all the revelations that have been generated by medical research in recent years, which one or two do you consider to be most significant? Please explain.

Nease: When we cracked the code on human DNA, we thought we were on the verge of curing a bunch of diseases. It’s turned out to be much more complicated than we thought. That’s significant, just not in the way we’d hoped. Maybe we shouldn’t have been surprised; genuine breakthrough improvements in health are few and far between. The biggest ones – the discovery of antibiotics, the development of effective vaccines, a reliable supply of clean water and good sanitation, the ability to reliably and affordably refrigerate foods – these are all things that happened more than fifty years ago.

That’s not to say that we haven’t made important advances: reasonably safe and effective medications for managing cholesterol, high blood pressure, and diabetes have had a big impact. And we’ve done really well in terms of cutting the rate of smoking. That’s due to a concerted push that’s made tobacco use more expensive along almost every dimension: financially, socially, etc. But it’s a success of policy and culture rather than medical research. I am hopeful that smart industry players in health care will shift their focus away from finding new molecules and toward practical behavior change strategies to ensure that we get the full benefit of discoveries that have already been made.

Morris: In your opinion, what is the single greatest challenge or barrier to efforts to apply behavioral sciences to the health care industry? Please explain.

Nease: The barriers are real; that’s one of the reasons I wrote the book, The Power of Fifty Bits. The application of behavioral sciences requires a significant shift in perspective, away from the rational model of choice and toward a model of behavior far more closely aligned with severely constrained cognition. In itself, that’s not news, but making that shift happen deeply within and across an organization is. In addition, although the strategies can make a big difference in behavior, they do require an investment. The folks holding the purse strings spend their waking hours trying to adhere to the rational model of choice, so that can be a hard sell.

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Bob cordially invites you to check out the resources at these websites:

For more information about Fifty Bits design, please click here.

For more information about the book and where to buy it, please click here.

 

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