Nudge and Sludge
The Lead Yourself First newsletter is a deep dive into what keeps leaders healthy and performing at their peak. Every fourth week, I'll distill one or more points to help you prioritize self-leadership and personal growth.
Are you stacking the deck in your favour or working through unnecessary barriers along your way?
If we use the Marshall Goldsmith formula:
The pathway to a life of intention is the alignment between Aspiration (Who you are becoming - the infinite game), Ambition (The quantifiable goals - the finite game), and Action (The activities you control every day).
This note is about making the connection between ambition and action less onerous.
First a quick introduction to the brains and the concepts.
Richard Thaler is a behavioural economist who was awarded the Nobel Prize in 2017. Cass Sunstein is a legal scholar specializing in law and behavioural economics. Together, they co-authored "Nudge," introducing the concept of "nudge" and "sludge."
A "nudge" is a subtle policy shift that encourages beneficial decisions without coercion, based on understanding human biases. Conversely, "sludge" refers to the barriers that impede decisions and activities.
And we can use the power of nudge and sludge to serve us.
Let’s talk wealth and health...
We all know (at least intellectually) the value of compounding. The 8th wonder of the world they say. But so many of us have a difficult time saving and investing. I was no different.
Because I started late we had to up the contribution. So we landed on 20% of our net income. We selected a Participative Whole Life Insurance Policy - a relatively safe investment. And then we set up the automatic withdrawal.
I do not see that amount - it goes directly into a separate account and into an investment every month.
That’s the nudge effect.
One decision (and some setup effort) that eliminated a lot of friction. Set it up once and forget it. It is working for me without any conscious effort on my end. And the added reality that to change it now takes a lot of effort. Both nudge and sludge at work.
I used sludge to steer me away from sugar.
I love sugar. Especially chocolate.
But there is nothing good about sugar. Higher blood pressure, weight gain, fatty liver disease, and diabetes are all effects of added sugar. Chronic inflammation - the route of all problems later in life is another hallmark of the sweet delight.
So I put sludge between me and sugar.
There is none in the house. Well, none that I can find. My partner has the family stash well hidden and under strict agreement not to tell me where.
It means that if I really want sugar, I have to go out and get it. That’s sludge.
But it wasn’t enough.
I travel 15-20 days a month. That means I’m often walking through the passageway of temptation as I pay for fuel.
So I added another layer of sludge. I added flexible rigidity - thanks Katy Milkman.
I eat sugar 5 times a month.
The flexible commitment allows me to enjoy the sweet delight without it becoming a net negative on my health ambitions and aspirations.
Shakespeare once said (and I’m sure he was just repeating it from somewhere) that:
“Nothing in this world is good or bad, but thinking makes it so.”
And that is the case here. A nudge can help drive positive behaviour or it can enable a destructive habit. Sludge brings friction and it can be both positive or negative depending on whether we want to create a barrier to a destructive activity or whether that barrier is a bridge too far on your pathway to a better life.
What matters in your life?
How can you enable the power of nudge and sludge to help drive the life you want?
PS - If you want to dive into practical tips for pushing through growth challenges, scaling organizations, and optimizing your process, check out the Racki & Symes podcast.