Hope it was a great weekend.
Excited to be back with another edition of Monday Morning Edge.
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Behavioral Externalities in Coaching
Last week, I shared this article on why behavioral economics would benefit from some of the insights from the field of evolutionary biology. While the entire article was good, the thing that stood out to me most was the author’s idea of behavioral externalities.
An externality is an idea from economics that refers to an additional cost brought about by something that’s produced or consumed. For example, a negative externality of the industrial age is the pollutants that affect the environment from the factories producing the goods.
On the other end of the spectrum, an example of a positive externality is personal education. When you consume education, you get a private benefit but are also now able to teach others, who will therefore benefit from the result of your education.
Externalities help us think about the larger impact of our economic activity and the possible second-order effects of our actions.
In a similar way, behavioral externalities help us understand the effects of actions on the social environments we find ourselves in. Let me explain.
For example, it’s been found that if the percentage of smokers in a person’s friend group increases 10% from 20% to 30%, that person will now be 25% more likely to become or remain a smoker. Conversely, hanging out with people who work out makes you more likely to adopt similar behaviors. Simple enough, right?
When I first read this, behavioral externalities sounded an awful lot like peer pressure to me. But as I thought about it more, I realized there was an additional layer to explain what was going on.
That extra layer? Feedback loops.
The behavioral externality loop starts out with someone doing something. Once that action happens, there’s an effect on the social context. That contextual shift has an effect on the future decisions and actions of the people in the environment, which kicks off further loops as people make decisions and take actions. And around and around the loop goes.
Once you find out behavioral externalities exist, you realize they’re ubiquitous. Everywhere you look, you’ll see social context driving behavior and that behavior shaping the social context (and the context shaping the behavior, and the behavior shaping the context…you get the point).
I could go on-and-on on this topic (and maybe I will in a later article), but I’ll try to keep this short.
To round this out, here are three examples of behavioral externalities that coaches encounter every single day:
- A poorly-behaved player makes it more acceptable for other players to be negative contributors to the team’s culture. The coach has to decide whether to intervene, when to do so, and how to do it to create a positive externality loop.
- Playing the right music during a training session can lift the group’s mood, making some/most/all players more likely to give a great effort during the session and be more engaged. At the same time, playing the same music but not knowing how to maintain interpersonal engagement can actually result in the negative externality of players not following you and instead just vibing to the music (if you know, you know).
- The senior leader of an organization consistently works 12-14 hour days. As a result, the rest of the staff feels they must work similar hours, so they do. As a result, the staff collectively works more hours over time as the group experiences a fisherian runaway where you work more hours in response to everyone else working more hours. This is closely tied to the incentive structures of coaching.
To really get the idea of behavioral externalities, you need to understand that the smallest changes in context can often have massive effects on behavior. Understanding that the sum of you and your entire team’s actions create the social context for future decisions is critical. Without this understanding, we’ll be stuck with static models of culture, leadership, and life.
And that’s just not how things work in the 21st Century.
Best of the week
The best of what I’ve been consuming to upgrade your content diet.
1. Life is Short by Paul Graham
Indeed, the law of supply and demand insures that: the more rewarding some kind of work is, the cheaper people will do it. It may be that less bullshit is forced on you than you think, though.
If life really is short, you ought to stop putting up with so much crap. Another beauty by Paul Graham.
The Transcendent Hockey Coach by Jack Han
A transcendent hockey coach is a:
- Logical decision-maker
- Positive leader
- Adept tactician
- Erudite historian
- Spiritual advisor
- Skillful storyteller
And as Jack points out, most coaches could use some work on 4-6.
That’s all for this week. Thanks for hanging out!
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Looking forward to doing this again next week Monday at 6 AM EST.
Appreciate you starting your week here,