Between gut feeling and strategy: How behavioral economics is changing management consulting
Marketing
Posted 28 May 2025
In many situations, management consulting involves creating PowerPoint presentations, analyzing data, and formulating solutions. However, what occurs when individuals do not base their decisions on rational considerations? What if routines, emotions, or even mistakes in thought play a considerably larger influence than anticipated? This is precisely where behavioral economics, a trendy term that is becoming more and more important in the consulting industry, comes into play. Anyone who want to switch companies must have a thorough understanding of human motivations.
Behavioral economics is a relatively new branch of economics. The field examines how individual decisions are made in real-life situations and simultaneously analyses systematic deviations from the classic model of homo oeconomicus. Unlike classic economic models, which are based on purely rational actors, behavioral economics focuses on what really drives us: Emotions, routines and fallacies. In short, it is the human element. People often act inconsistently, impulsively, or irrationally. They follow the familiar, avoid uncertainty and allow themselves to be influenced by small things. Behavioral economics builds on precisely these circumstances, examining them to develop theories and economic strategies that work because they incorporate human behavior into the equation.
Management consulting benefits greatly from behavioral economics because it allows businesses, particularly consultants and marketers, to better understand how people think, feel, and make decisions. This allows for the successful design of change in addition to its planning. Here are some concise viewpoints:
Rarely do changes fail because of the concept. Most of the time, they fail because they are rejected. Workers are still stuck in their old habits, new tools appear odd, and meetings conclude with courteous nods but little actual movement. The resistance is being understood rather than fought. It shapes behavior rather than using force. To encourage appropriate implementation, for instance, nudging—gentle impulses that facilitate decision-making without dictating them—is a useful technique. It is more likely that people will follow procedures that are easy to understand, relate to, and intuitive. I do this out of conviction rather than obligation.
Whether it’s a change campaign or a strategy paper, the effectiveness of the communication is frequently more important than the content’s quality. Behavioral economics demonstrates that no matter how logical a measure appears, it will not be applied if it is not understood, felt to be relevant, or viewed as feasible. The good news is that minor changes frequently have a significant effect. A more effective call to action, a more transparent choice path, and a timely visual cue are all factors that contribute to increased impact. Applying psychological concepts intentionally can have a positive impact on behavior in addition to enhancing communication.
Naturally, market analysis, benchmarking, and KPIs continue to be essential elements of consulting. However, they only provide half the picture. Although they don’t explain why, figures show what is happening. Every KPI has human beings with feelings, backgrounds, and biases behind it. The context is lost if you merely view the data set. Both are combined in behavioral economics: rigorous analysis and adaptable and flexible knowledge. Because it is grounded in reality and does not circumvent human nature, this combination is the secret to long-lasting change.
The concept is not the end of optimal consultation; its full impact only materializes when it is comprehended, embraced, and applied in day-to-day activities. Beyond specialized knowledge, this calls for an understanding of how people process information and what truly drives them. People are more likely to participate actively when messages are clear, pertinent, and attractively presented. Accordingly, consulting is about giving genuine drive for change rather than simply sharing knowledge.
Behavioral economics offers management consultancies a powerful tool with which to analyze and effectively shape change. This does not mean that people are manipulated; rather, it means that real decision-making processes should be understood and positively influenced. If you want to provide advice, you must be able to influence behavior. This is precisely where the opportunity lies: by using behavioral economics principles, strategies become better, more human, more realistic and more sustainable.
Would you like to take your consulting projects to a new level with behavioral economics? Write to us at vibes@hbi.de – we will be happy to advise you!
Junior Communication Consultant at HBI Communication Helga Bailey GmbH
Annika Müller has been supporting HBI in the areas of PR and marketing since 2022. As a Junior Communication Consultant, her responsibilities include the creation of professional articles and the conceptualization of social media postings.
Furthermore, Annika is involved in directly assisting our client work.
