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This is a transcription of our interview with Hani Nabeel, Chief Behavioural Scientist @ IPsychTec. You can watch the original interview here or tune in to the podcast episode here, iTunes, Spotify and other podcast apps be seacrhing "Risk Management Show" 

Boris: Hello ladies and gentlemen and welcome to out interview with Hani Nabeel.

Hani is the founder and Chief Behavioural Scientist at iPsychTec, a world leading People Analytics and behavioural science company.

 He's the architect and founder of the award-winning Culture Scope behavior analytics platform for scientifically measuring and embedding organizations desired culture, using predictive analytics and actionable insights.

Hani, thank you for coming to our interview today.

Hani: Thank you. Great to be with you Boris.

Boris: Thank you. We recently had a webinar with you guys about using behavioral science in cracking the culture code, especially in the perspective of Risk Management and Compliance. And for those who are interested, please check out our BrightTALK or YouTube channel to watch the recording. The name of both channels is Global Risk Community, so you can find them. Today we invited Hani to discuss in more details about his company, how it's breaking through the noise and delivering value to its customers.

Hani, can you tell us a short story about your unique pass in the industry?

Hani: Absolutely. So iPsychTec was born out of a research first, which is probably unusual these days. People prone to try a commercial launch, but we took the time seven years actually to do five studies, which became one of the largest quantitative behavior diagnostic analytics study ever done in the world. To give you an idea of the dynamics of our research, it was of a 51,000 participants across 60 diverse organizations within 61 countries. The whole point of that research is to articulate, can we have a quantitative way of measuring behaviors to understand culture.

There was no obvious way of doing this, there wasn't a research even around this, the best we could do with culture was use qualitative or lagging indicators. And we all know behaviors are critical in measuring culture. Even if we talk about the culture of risk and the reality is without the research, we couldn't have had a successful product that really is, as you had mentioned at the beginning, scientifically measures behaviors.

Just to go a little bit further into detail quickly, we measure behaviors in two distinct ways. We measure behaviors for each person on how I behave at work and the second lens or a probe if you like about what do I do, what do I observe around me at work.

So we call it, the behaviors of the people at the place and that diagnostic is all collected together using our cloud platform, a dedicated neural intelligence platform that actually goes from behaviors to outcomes or from outcomes back to the behaviors.

This process builds a predictive picture on what really behaviors may drive the different themes that you're interested in, being a risk synoptic, view compliance, innovation, inclusion, all of what employees do affect all the different themes that you're interested in.

The whole point of doing all of that is ultimately building an actionable insight, because what doesn't get measured never gets fixed. 

And that's the important story here. However, if we build an actionable insight being behaviors what you take action on and building also for our clients a behavior change roadmap.

So what behaviors are to focus on to drive which outcomes that really is a game changer, and this is where now we can articulate. If you're interested to talk about risk, particularly what behaviors drive our risk. And if we want to improve our risk, which behaviors we work and second on what outcomes we expect back.

So it's a significant improvement to if you like the ad hoc queries that we used to work in,

Boris: So what was the aha moment when you knew you were ready to go full time for this platform? 

Hani: Well, the platform actually was post research. So the minute we've had done our five studies and we reached the diagnostic validity, and it had to be a very sophisticated diagnostic, it's an online questionnaire, but obviously like none other it's uses very different techniques to give an example, even using a computer adaptive testing, very different. 

And when we found out that actually that diagnostic also drives some incredible analytics, very powerful and through multiple outcomes, doing predictive analytics to know that actually those behaviors do drive outcomes, we knew we’ll practice it.

And this is when obviously the second stage was going into the cloud in order to build the application which we have done so. That took in itself a year, as you might imagine, because going from research to product is all different ball game with functionality, but we constantly improve the product, drive great innovation and we are with version four now and working with global organizations.

In fact, we started working with global organizations almost at day zero, literally late 2015, we've had some global clients, which was really quite exciting.

Boris: Sure. Can you explain a major point what IPsychTec offers to the industry, how it differs from other software providers operating in the space and what are perhaps some examples of your customers use cases?

Hani: It's a very good question. Why are we different and how are we helping them solve critical issues? A lot of our customers when they come to us and we talk about culture, culture as it drives, maybe risk innovation performance, customer centricity in a culture is your biggest unique tool that drives your brand and your offering.

As you know, it's easy to replicate even office, services and products, but culture is quite unique.

So our customers for years have been trying to see how can we really measure this uniqueness? How can we measure culture and what a lot of other software platforms, our competitors tend to do today, which is really capturing the outcomes of culture.

In fact, you could do it as simply as engagement surveys, how employees feel about our business? Our employee is likely to stay with us or go? Do our customers love us or not?

Are they likely to stay with us or not? Other measures could be literally in, particularly in regulated industries, we're talking about incidents, accidents, financial crime, your name it.

So what we were different in saying, fine, if you capture those outcomes of culture, it's the after effects. So something would have happened and then you get to know about it.

To really manage your culture you need to know what are the leading indicators.

And in fact, you should be able to know, what are the critical leading indicators, how do you work on those in a such a way that you can drive interventions that not only stop bad outcomes, but actually improves also your return on investments, maybe improves efficiency, customer stickiness, all of those good things.

And this is where Culture Scope is unique and it's different. So on one platform, you get to measure the leading indicators, being behaviors, you get to feed the platform, any outcome that you measured today, whether it be revenues, even sales revenues, whether it be incidents, accidents, how employees feel, how customers feel.

You can bring all of that stuff onto the platform and you connect the lagging indicators to the leading indicators, and by press of a button with a help of a neuron intelligence, the engine that we've built, you can get to see which behaviors impact those outcomes and by how much.

So you can look, if I fix these behaviors, how many outcomes I get back for it. Wow. That's incredible. And I know what is my ROI.

You talk about use cases. We've had so many, imagine we've been used at 84 countries today, but to give you some examples of that, specifically some of the global banks, particularly one is very public about what we've done with them being HSBC, used it and understanding and predicting how financial crime may occur right across the world, with 30,000 employees, 71 countries.

Obviously they come with fighting the after effect. As you know, back in 2016, 17, they've had some significant fines, unfortunately. Be able to understand how we can use behavior analytics as the first line defense against financial crime. Literally, we understand per country, where they need to focus on, how are we likely to stop financial crime, and then to drive interventions to work on more specific behaviors in such a way that you eradicate financial crime within a year, literally.

So you get all regulators off your back, which is really important. And just the other day, having spoken to two of our clients, one of them is in the nuclear industry who really gets to understand which behaviors can drive innovation and manage risk in our nuclear plants, behavior risks took a whole new toll that we can really drive the predictive as to what you really need to do and how you can tell regulators you're on top of your game.

Likewise, one insurance company, literally said to me, I have done a detailed study of what drives risk and customer empathy for them and made a plan to manage their risk and customer empathy. He said, wow, in one day you have changed our lives.

And that's what we want to change people’s lives using technology and data insights. And I had a really a big moment the other day when I heard that, because it's in our DNA. It's what we live for. If we can't do that, what are we there for?

You hear so many incidents and issues on the news often. It gives you a quick glimpse into some cases.

Boris: So can you tell me where and how does behavioral risk fit in the overall organization? Is it in HR, Risk management, Senior management?

Hani: So behavior risk and culture in general is not a HR issue, it's not a HR department issue. They might do its measurement and sometimes its rollout but really culture is owned by every single employee. Of course you can argue that the leaders are the custodians of culture, but as you know, really every single employee in any company, however, a large or small are literally every minute of every day, enacting, behaving the culture of the place.

It's not owned by one department. However, it's easy to argue that HR may be the ones that drive a measurement program and interventions, but more and more, we see that transformation divisions are owning it. Obviously, if they need to transform the change behavior, you've got to also conduct risk and compliance guys who own the compliance, even internal audit are interested in what we do and they benefit from the measurement.

Let's say that if HR has measured all the behaviors once, now you can please all your internal stakeholders like compliance, risk, and innovation transformation. Now they can plug into that platform and say, here is our sematic view of what we need or our outcomes, whether it be the risk outcomes or innovation outcomes or performance outcomes, and can Culture Scope, answers the difficult questions for us, tell us what behaviors drive the key metric we're interested in?

Other thing that I want to highlight is the whole behavior risk agenda.

Let's just bring some clarity onto it. When we talk about generally a human performance, let's look at it. Really human performance in general or human factors as you may have heard it can be broadly defined by skill, knowledge behavior. So if you are particularly interested as a risk manager, you've got to ask you a question.

Are my people skilled? Are they knowledgeable? And how are they like to conduct themselves to manage risk?

Now, skill and knowledge are the easier ones to train, assess, and develop. Behavior was always the hardest one. So we can really plug in and conclude for them, what I used to call the blindfold in human factors. Can I give a further example from the industry that I l started with which is aviation.

Think about pilots. They are constantly managing efficiency and managing risk in a flight. Pilots, generally speaking, if you're woke up to a flight now you would have a safe assumption that these guys out the front are skilled to fly in the aircraft, right?

They have the knowledge. I mean, it's a pretty clinical environment, all pilots around the world are unanimous with a little bit of variation, they know what the bottoms do.

What you don't know as you seat as a passenger is how are they likely to conduct the flight? That's where behavior comes in. Are they likely to be risky, not risky, fuel efficient and so on and so forth. So that kind of explains the difference and that goes to any industry. You always want in human factors to think about risks, say, are they skilled? Are they knowledgeable? Which is what nine times out of 10, the training programs, especially where you started and I'm sure you had a great way to focus on developing skills and knowledge.

The hardest ones, which we didn't have an Institute today is behaviors. So you can see why now without adding another lens, it's like removing the blindfold of what you really didn't know and couldn't assess. And now you can add behavior training even into your agenda.

Boris: What would you say are the key steps, what chief risk officers, or maybe executives must do to be able to build an effective risk culture in their organizations?

Hani: Brilliant. Well, I would say, there are some really key, easy steps. First of all when we even approach a client, we talk about define. Define what? Well, do you have a risk framework by behavior you want to actually assess? In fact, do you have key outcome metrics that you need to understand which behaviors are driving those metrics?

So the define stage is a critical, understand the outcomes, understand your framework if you have one. The second point is measurement. What we really didn't have in the world today and it's critical. This is a big gap, of course, we're plugging in is actually measurements.

So you can deploy a tool to measure the behaviors in a quant form. The behavior measure doesn’t tell you how it is manifested but is your first point of understanding whether the behaviors that I'm interested in are present or absent.

So there's no right and wrong. Remember, I'm using simple words. Now you, if you have a tool, which is what obviously Culture Scope adds to the world is an accurate way or scientific way of measuring the presence or absence of behaviors.

Obviously from that, you can move to the insights and people analytics. So all that clever engines that are embedded in Culture Scope can provide you the insights and analytics to tell you the trend analysis in two distinct ways. One, if you have a framework for risk management, are you actually living, are you behaving your risk framework?

And does your organization drive it up? Remember people in place that story I started with. If not then, you can shine a light on which behaviors we need to focus on to actually live our frameworks, but also to deliver actionable insights.

We can look at the key outcomes that you've brought in at your defined stage to say, well, you know, those outcomes that you're interested in, we can tell you which behaviors predict those outcomes. And wow. If those behaviors exist in your framework, that is awesome news.

Not even that, if you want to drive change, which is the final point, now we can also deliver a roadmap for change, which behaviors you work on first to drive, which outcome you might also know which outcome cascades to another and another. And now you have clarity around your driving change. So I called it simply just to summarize, define measure, insight, analytics, and change roadmap.

Boris: You defined it very concise. What does the commonly held belief in the behavior science or a biggest misconception that you strongly disagree with?

Hani: One of the things now that I constantly see is we still stick to the point that behavior and culture is the unknown. And we get to accept that it's the unknown. As best way we approach it we say, oh, we'll do a qualitative. If we don't do that, we tend to go for invalid tools that tell us something around engagement and not culture. There might be a valid for engagement. You know, I might employees engaged or not, but those things are the not tell you about the behaviors.

So the biggest misconceptions I'm still finding today, which are changing is the miss measurement of culture, which is dangerous. I mean, it's worse than not measuring at all, in my opinion. And when we do go to go beyond to say, all right, fine, we've got a metric is then you've got to use the right tools in order to measure in and those are the biggest misnomers, you know, and that the more traditional one obviously is, oh, we've got an engagement survey.

Well, that would tell us a sentiment. It doesn't tell you anything about behavior. These are the biggest things that we're trying to eradicate them in the world. It doesn't mean that you shouldn't use and engagement survey to manage employee engagement, but don't assume that you've got something that you're doing as a tick box exercise to say, yeah, we've done it. No, no, no. But you've got to be very clear, as I said, do I have the skill, the knowledge and behavior, and if you don’t, you need to alter behavior.

Boris: Okay, fantastic. So maybe it will be interesting to know what you or your team have recently achieved that you are really proud of.

Hani: I think beyond our wildest dreams, when we started and we have grown so quickly to 84 countries, although we are head-quartered in the UK, being a cloud business, we can deploy anywhere. But actually we have clients from right around the world. I mean, HQ's from around the world, use the tools.

So if you think about it, we launched in 15, it was a soft launch. By the time we actually, put the cloud in place, let's say 16.

So in four and half years to achieve the growth that we've done, but also help our customers crack the culture code of things that were costing billions in financial crime, in driving safety, there are nuclear sites to stop incidents and near misses. It's just really exciting to be able to make a difference. And as I said, I had a big moment the other day, when a client can simply turn and say to me, wow you have changed our lives.

So to be able to change lives, we all bring ourselves to work and work as you know, takes a significant part of adult's life and it could affect us in extreme and wonderful ways. But to be able to deal with that and work with that, that is just an important and significant!

Boris: Fantastic. I ask this question all my guests. Because I'm running Global Risk Community, we are a community about 30,000 members and also have a large mailing list. As a community for risk managers, how can we contribute to the process of a better understanding of this complex world of risk from your perspective?

Hani: I like the word complex because I know it is sometimes can be seen as complex, but let's remove the stigma out of complex for a minute. Clarity. Just clarity is quite simple. If you have a risk framework that you expect people to behave at work, now you're at an era when you can test it with advanced analytics, you can know its effects on key outcome metrics that you have been measuring for years and you have those outcome metrics. You've had them forever.

So, it's better to know than not know. So don't try and over simplify by saying, I'll just do anything as a tick box exercise. Sadly, I've seen a lot of organizations tend to approach risk with a tick box exercise. We have tried that and you have seen how many companies fallen on the fowl side of risk, whether been in automotive, in finance, in airline or in energy, countless and that's still happening today.

I'm sure you hear in the news every week about organizations or even governments around the world. So be brave. It's not that tick box exercise, but you don't have to think of complexity. It is simplicity. Do I measure scale? Do I measure knowledge? Do I measure behaviors? Do I have a framework that I expect people to drive? And now I remove the blindfold. I know exactly what goes on through basically leading indicators of risk.

If I'm only looking at lagging, I have a problem. If I'm looking at leading and lagging indicators, I've got the full formula. That's what you got to be asking yourself all the time as a risk expert.

Boris: Okay, fantastic. So I have all my questions. Maybe if I forgot something that you would like to add that would benefit our audience?

Hani: Well, let me add one point, which goes beyond measurement to interventions and planning for behavior change. I often get asked two things. Why do intervention programs and transformation programs fail? The next question that I tend to get is, how can we really target that change? What tools do we have to try and drive change?

Let me answer the first question, look, transformation or change programs fail for three
critical and simple reasons.

One is you don't know who your change champions are. In every change, especially around behavior change you do need champions, luckily with a wealth of measuring who have those behaviors present or not. Now you can target your allies. If you don't and again, for an instance, I've done some work with a recent company who we found that at best, they had a 21% chance of achieving the objectives of change, which is very low.

Define who my change champions are around the business and my focus is to work with them on driving the change. They amplify the behaviors for me, I'm they champion them that a probability of success goes from 21 to 69%. That's an increase.

The second key point of why they fail is really that I don't know the size of their ask. If I'm asking this place to change from A to B, how significant is that change? Is that one behavior or 10 behaviors. But the minute that I know the resistance and the size of their ask, I can better to have a plan to find a path of least resistance. I hope that makes sense. 

The third key points, which often we don't have is having a culture plan. We have a financial plan, an operational plan and I can have a culture plan because I know which behaviors and which outcomes they drive. And how do I get down from A to B it's like having a map. You've got a culture plan, which we can do.

And the last question that I think they will be interested in is how do we achieve, what are the tools that I need to have to achieve change and believe it or not, that it's a huge complexity and a stigma around the world about the behavior change.

Let me simplify it inside one minute. In our lives and everything we do, a behavior falls into two systems. One, we call a system one and one system two. System, one are things we do without sinking, right? You wake up every morning, you make the coffee, you brush your teeth. You don't think about this thing.

System two are things that you need to think about. We make about 35 decisions every day. Most of them go through System One because if there is a lot that goes to System 2 you be so tired. You'll need to take a nap every hour literate, you need to take a timeout.

When we achieve a behavioral change, we need to focus on system 2 so much that it becomes system one. Well, that's what we need to do in behavior change. The way you achieve this is by understanding the capability, the opportunity, and ultimately also that reward.

So the way you can do that if you need to improve the capability that means you're doing the bias behavior training. If it's the place and you need to improve the opportunity, and also the reward, you are working on the nudge behaviors.

So the only two allies you have is bias training a nudge. I know people talk about nudge extremely, and what not is, is quite simple constantly reminding people of what they need to do. And ultimately also providing them a reward so that people go, okay, I better do this as I want to be rewarded.

And I just wanted to end on that note because people know there's a lot of misunderstanding misnomers around behaviors. By the way, System 1 and system 2 is not left brain and right brain, not at all. That's not what it is either. It's really is about the systems of behaviors. I hope your audience will find that helpful.

Boris: Absolutely, thank you for coming to our interview today, Hani, and hopefully we'll continue working with you and probably will a have another interview in a few months to see how you are progressing.

Hani: It'd be an absolute pleasure. Thank you. I'd love to share the knowledge, we are on a mission. Thank you. Have a nice day.