If you’ve ever purchased a home or filed for a government benefit you’ve likely encountered what Harvard Law School Professor Cass R. Sunstein calls “sludge,” the red tape that creates friction within a given process. Sunstein knows first-hand that sludge can be more than just a nuisance. He has worked with the Department of Homeland Security for the Biden administration and previously was Administrator of the Office of Information and Regulatory Affairs during the Obama administration, and he has authored numerous articles on sludge-laden topics such as taxation and animal rights.
Those familiar with Nudge: Improving Decisions about Health, Wealth, and Happiness, Sunstein’s book on behavioral economics co-authored with Richard H. Thaler, will recall the chapter on sludge. In this chapter, the authors describe a host of bogged-down processes that will be, unfortunately, all too familiar for many readers.
Driven by his abiding interest in discovering how the public and private sectors can improve experiences for the individuals they serve, Sunstein expounds upon these ideas in his new book, Sludge: What Stops Us from Getting Things Done and What to Do About It. The book is an exploration of the processes, forms, requirements, and waiting periods that slow people down.
Sunstein joined Zoe Chance, Senior Lecturer of Marketing at Yale School of Management and acclaimed author, along with an international audience for YCCI’s Learning from Leaders webinar series to discuss his perspective on sludge.
Sludge is prominent in the public sector, but that’s probably not surprising. The tax-return process in the United States is notoriously burdensome. Sunstein illustrated sludge with the example of the earned income tax credit. The processes that are currently in place for individuals to receive this credit are so convoluted and time-consuming that not all those entitled to the credit receive it. Additionally, you might be shocked to learn that the United States imposes 11 billion hours of paperwork requirements—the equivalent of every person in an enormous city doing paperwork for more than an entire year.
While sludgy slowdowns are frustrating, they sometimes do serve a positive purpose. Banks must impose some level of sludge—in this case, paperwork—before issuing loans to collect sufficient evidence that the consumer is not being fraudulent and likely has the means to avoid defaulting on the loan. This sludge allows banks to continue to serve communities. It’s an example of program integrity, and can be applied to license applications, student loan applications, and more. On a smaller scale, sludge in operating systems can slow a user down when permanently deleting a file by simply asking, “Are you sure?” This can prevent mishaps when a user is working inattentively or too quickly. In these cases, sludge is necessary and even desirable. Institutions leveraging positive sludge can avoid the problems associated with sludge by keeping an eye on if the volume of sludge begins to exceed the requirements for program integrity.
The paradigm of sludge-awareness is the tech industry. Amazon and Apple were praised by Sunstein in the Learning with Leaders webinar for investing in “sludge busting.” These companies work tirelessly to provide an exceptional, seamless experience for customers across their products and services. They have demonstrated how eliminating sludge can encourage repeat customers and boost a company’s top line. These companies set the bar for what users expect in customer experience and Sunstein suggests that other industries must catch up or lose out.
Sunstein makes it clear that the stakes regarding sludge are high. He describes bad sludge as an infringement on human dignity: “It makes people feel that their time does not matter. In extreme cases, it makes people feel that their lives do not matter” (Sludge 109). Moreover, sludge runs counter to institutional initiatives because it “typically comes down hardest on the people for whom the program is designed,” as Sunstein explained during the webinar.
It makes people feel that their time does not matter. In extreme cases, it makes people feel that their lives do not matter
So, what can organizations do to tackle these exasperating slowdowns? Sludge audits might be the answer. By assembling teams committed to unearthing sludge, organizations across sectors can understand the magnitude of the sludge they are imposing and work to root it out. While some sludge is necessary for organizations and can even be positive for individuals in certain circumstances, most sludge slows down customers and wastes employees’ time. It can prevent those entitled to certain benefits from receiving them. Audits can help to identify sludge, evaluate its usefulness, and make changes to provide an improved experience for all involved.