Small Changes

Seemingly small process changes combine for large impacts

According to Oxford Languages, there are many definitions of a system, including “a set of things working together as parts of a mechanism or an interconnecting network” and “a set of principles or procedures according to which something is done.” Examples of these types of systems might include a “public school system" or “digestive system.” These systems are chiefly composed of people and processes.  

In technology, we often think of a system as more of a collection of hardware and software that are designed to send, receive, and process information. In our businesses, however, we have many systems such as a talent management system that is responsible for attracting, hiring, and retaining employees. We often think that in order to make an impact on the outcome we need big sweeping changes. For example, in our talent management system we might think that we need to set up a comprehensive and expensive educational program with an outside vendor for employees to feel valued. However, a simple and cost effective rotational program might achieve the same results. 

In our products, we might often think the same way, that we need big sweeping changes in order to see large positive results. However, this isn’t always the case. Often, small incremental changes can lead to outsized results. One example that I’ve seen is the implementation of nudges on ecommerce sites. In the words of Richard Thaler and Cass Sunstein, authors of the 2008 book Nudge: 

A nudge…is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.

A nudge that worked particularly well came about from Etsy’s initiative to completely offset all carbon emissions from shipping. To make customers aware of this change, they added a small line of text on the checkout flow stating that “Etsy off-sets carbon emissions on every delivery.” This resonated so much with the buyers that it drove a large enough increase in checkout completions to completely cover the cost of the carbon offsets. As another example, Lenny Rachitsky, shared on one of his podcasts this past fall that he had experienced a huge win at Airbnb when the team made a small change with the search experience to open each listing in a new tab, resulting in a 1% higher conversion rate. 

These types of small changes that lead to large impacts are not limited to product changes but can be seen everywhere. In chaos theory, which is an area of scientific study of dynamic systems, there is a phenomenon known as the butterfly effect. This term is closely associated with Edward Norton Lorenz, a mathematician and meteorologist, who noted that the exact time of formation and path of a tornado could be influenced by minor perturbations such as a butterfly flapping its wings several weeks earlier. 

In human behavior the small act of gratitude, feeling thankful, can have significant positive impacts. Recently, research has shown that “gratitude is strongly related to several aspects of well-being and mental health.” Gratitude is even being used in clinical interventions as a way of fostering positive functioning, improving well-being and psychological disorders. The same is true for our physical health and wellbeing. According to the British Heart Foundation, “Small changes make a big difference when you stick to them…Huge changes are hard to stick to. Small ones tend to have a greater impact over time. Don’t be put off if a single change only saves a few calories – it all adds up. Skimmed milk on cereal instead of semi-skimmed can save 8,320kcal in a year. That means you can lose (or avoid gaining) about 1kg (2.2lb) of fat.”

Returning to business systems, small changes in the processes or people that make up these can also have outsized impacts. For talent management systems, hiring talent is a key outcome. A major process shift focused on improving this outcome, that you might encounter as a company scales up, is to move from an interview process where the entire hiring team gets to speak to candidates to one where you use dedicated interviewers and only the hiring manager gets to interview candidates. This is a major shift in how companies hire and often takes multiple quarters to design and implement. It of course can, and usually does, have a significant increase in candidate throughput as you no longer have to coordinate for availability from every individual on a team. Rather, during their rotation, the dedicated interviewers are often excluded from other responsibilities and thus have much more open calendars. 

If you need this large change in your hiring process, you should definitely take it on, but if you want to increase your hiring but you’re not ready for such a massive change, you might want to try a much smaller change. One smaller change is just limiting the number of interviews per candidate. Google operates under the Rule of 4, where they claim that four interviews are enough to hire someone. This is based on Google's research that four interviews can predict with 86% confidence that someone is a qualified hire. So, instead of the entire team interviewing candidates, you require the hiring manager to just select four. 

Stepping back and looking at this from a systems perspective, our businesses have systems within them that allow them to operate. A few notable ones include: customer service, accounting, payroll, and, as we’ve been exploring, talent management. Each of these are made up of many processes (and people) that allow the system to produce the desired output such as delighted customers, accurate financial reports, and excellent employees. If we aren’t getting the results we desire from these systems we could consider massive changes or worse yet, we could blame the last person in the system. For example, if we weren’t getting accurate financial reports, we could “shoot the messenger” and blame the individual presenting the numbers at an operations review. In another example, if we weren’t able to retain great employees we could pin the responsibility solely on the shoulders of the line managers. In advertising, we would call this last touch attribution – the last advertisement to touch the buyer gets 100% of the credit for the sale. We intuitively know this is not correct, as it is believed in marketing that customers require seven interactions with your brand before a purchase. 

A better and more productive way of looking at systems that aren’t producing the results we desire is to think about all of the small processes that comprise the overall system. Each one plays a part. A small change in any of them might lead to outsized improvements just like nudges or opening search results in different tabs. Don’t start with sweeping changes or worse, blaming the last person in the system. These are fraught with problems that will likely leave your business systems in worse shape, producing worse outputs.