1. Coaching for Change
An overview of research and models supporting effective coaching, engagement and retention
WMY Housing Track 2017
Presentation by Katie Taylor,
Senior Director of Housing and Wealth Building, NUL

2. Objectives
To introduce a few models and approaches that are particularly helpful to the work we are doing with our clients in economic behavior change
Ways to enhance coaching approach to get better results with people
To understand why we should entertain new approaches and how they differ from current approaches
To provide some information and resources for participants to share, discuss and champion with teams at home
Discussion on the ideas

3. Background
The concepts and models come from different disciplines and are backed up by a lot of research, including:
Behavioral Science
Psychology
Behavioral Economics
Positive Psychology

4. Scarcity and Insights from Behavioral Economics

5. What is Behavioral Economics?
The study of how real people make actual financial choices
Draws from both Psychology and Economics
Based on a wealth of solid research across a variety of fields
Shows that most humans seldom make decisions rationally

6. Why Behavioral Economics?
Behavioral economics integrates findings from psychology and economics in the study of human behavior.
The research reveals a range of biases in decision-making.
Helps us understand better how people process financial decision making
The more we understand the dynamics of how scarcity works on the human mind, the more likely we can find ways to better help clients achieve their goals despite challenges.

7. Human Behavior is Not Rational
Historically, economists theorized that we made money choices rationally. But behavioral economics research studies show that’s not the case.
We can only base our decisions on context (including moral belief systems).
But while we may not be rational, we are quite predictable in our irrational ways. We all tend to make the same kinds of decisions in similar situations (especially within cultures).

8. The concept of Scarcity
Powerful new perspective in the book, Scarcity: Why Having Too Little Means So Much by economist by Sendhil Mullianathan and psychologist Eldar Shafir (2013)
Explains how a lack of anything important can dictate everything we think, do and feel
What happens to our minds when we feel we have too little, and how that shapes our choices and our behaviors.
How scarcity - and our flawed responses to it - shapes our lives, our society, and our culture
Gives insight into how to better manage Scarcity – for self, others, organizations and society

9. The Concept of Scarcity
Scarcity creates a similar psychology for everyone struggling to manage with less than they need. Busy people fail to manage their time efficiently for the same reasons the poor and those maxed out on credit cards fail to manage their money.

10. Where do we see Scarcity?
People in debt who can’t get out
Successful people who can’t complete things until the last minute
Dieters who can’t lose weight
Lonely people who can’t find friends
Perpetual firefighting in organizations
Persistent Poverty

11. How does it manifest?
Captures the mind on a subconscious level - faster than we can choose to stop it
We become absorbed by it. The mind orients automatically, powerfully, toward unfulfilled needs.
For the hungry, that need is food. For the busy it might be a project that needs to be finished. For the cash-strapped it might be this month's rent payment; for the lonely, a lack of companionship.
More than just the displeasure of having very little – it changes how we think and imposes itself on our minds
When we function under scarcity, we represent, manage, and deal with problems differently.

12. How does it Manifest?
When money is scarce, your thoughts can become overwhelmed with your financial struggles, making it hard to make better choices. And the poor have complex choices, a complex landscape, and high stakes involved.
When money is in short supply they are too busy putting out budgetary fires to think about retirement. There is too little “bandwidth,” or slack, in their minds and their budgets to entertain such a long-term idea.
They are worrying about rent and car repairs. Their tunnel-focus on those immediate costs render the poor unable to look far ahead or plan for the future. Anything that lies “outside the tunnel,” gets ignored.

13. How Does it Manifest?
Why don’t people who need health insurance buy it? Why do people not save for retirement?
Many will say they can’t afford it. But those of us who have experienced health complications or other challenges costing thousands of dollars insist that you can’t afford not to have insurance.
Yet the scarcity of financial resources forces people to focus on immediate needs.
Insurance does not deal with any of the needs — food, rent, school fees — that are pressing against the mind right now. Instead, it exacerbates them — one more strain on an already strained budget.

14. Why? Bandwidth
Those operating in Scarcity have very little “Bandwidth”
Bandwidth is effectively mental capacity / mental space to make decisions
Because we are preoccupied by scarcity, because our minds constantly return to it, we have less mind to give to the rest of life.
When money is scarce, our thoughts can become overwhelmed with financial struggles, making it hard to make better choices.
The tendency is to go with the “default” option vs. making active, often better choices. And many of those default options may be bad for us.

15. Why? Tunneling
Scarcity results in “tunneling” - when you focus on one thing so much that you neglect something else
Scarcity captures our attention, and this provides a narrow benefit: we do a better job of managing pressing needs
But more broadly, it costs us: we neglect other concerns, and we become less effective in the rest of life and we can’t plan ahead.
We fight harder not to lose things rather than focusing on how to gain more

16. How it plays out: Increased Debt
The cash-strapped can’t think of anything else but paying the immediate bills in any way necessary – e.g. Payday Loans with exorbitant interest rates
They can’t absorb the reality of debilitating interest rates when they have no bandwidth to think of such things.
They can’t focus on planning for the future (college for kids, retirement for themselves)

17. How it plays out: Vicious Cycle
Falling behind can turn into a vicious cycle
Re-registering the car is now one more thing to do.
A project had taken a wrong direction because of a late response; getting it back on track means yet more work and stress.
The past-due pile of life is growing dangerously close to toppling.
Resisting temptation is hard - resisting all temptations is even harder
A leather jacket coveted went on sale at a great price.
There are too many ways to spend more than planned and it’s easy to fall back into the debt pool.

18. What’s the impact?
The more indebted you are, the greater the need to not buy
The busier you are, the greater the need to say no
Plans to escape sound reasonable but prove hard to implement - require constant vigilance about what to buy or what to do
When vigilance flags—the slightest temptation in time or in money—we sink deeper and can end up stuck with accumulating debt or stuck under mounting commitments

19. The Feeling of Scarcity
It impacts our subjective perception of what matters:
How important is that purchase? how much do we need to accomplish?
Such desires are shaped by culture, values, upbringing, even genetics.
We may deeply desire something because of our physiology, because we always wanted it, or because our neighbor has it.
Just as how cold we feel depends on absolute temperature it also depends on our own private metabolism, the feeling of scarcity depends on both what is available and on our own tastes or preferences.

20. The Scarcity Mindset
But scarcity is not just a physical constraint. It is also a Mindset.
When scarcity captures our attention, it changes how we think.
By staying top of mind, it affects what we notice, how we weigh our choices, and ultimately what we decide and how we behave.
Universal concept: Scarcity, in every form, creates a similar mindset. And this mindset can help explain many of the behaviors and the consequences of scarcity.

21. The Phenomenon of Scarcity
Financial stability and asset building often requires planning and working towards short, medium and long- term goals
However, the stress of stretching financial resources can make it hard to look beyond today
Scarcity depletes mental cognition and self-control
Scarcity captures the mind (“tunneling”) and causes people to focus only on the emergency of the moment

22. The Implications for our Work
The more we understand what’s going on the better we can engage with the client, the better the outcomes, and the longer-lasting.
This concept also counters the stereotypes that the poor are just lazy or irresponsible
Understanding how the poor may be thinking can result in more effective anti-poverty programs and strategies.

23. Implications for Coaching
We all categorize our money into different mental categories or accounts. (“Mental Accounting”). A bonus from work is “fun money” but take-home pay is for the bills.
People often budget their current sources of income into mental accounts; and changing their accounts may be difficult.
Look for opportunities to help clients to re-label their existing “mental accounts,” especially as part of budgeting exercises or spending plans.
One strategy is focus on funds that are not yet labeled into any account.
Future income/bonuses
Tax refunds
These may not be part of people’s mental accounts, so there may be some flexibility in how they decide to use it. Making plans for next year’s refund or bonus now might help people to label these funds for a beneficial use.

24. Focus on Behavioral Approaches and Account for Scarcity
Make decision-making easier
Design services that support people with “low bandwidth”- one step at a time with a coach by your side
Designing ‘better’ defaults (opt outs over opt ins)
The 401k example
The pick list approach doesn’t work because of where they are in mindset when they walk in the door.

25. Focus on Behavioral Approaches and Account for Scarcity
Nudges/Reminders of specific behaviors tied to a goal.
That promote one-time actions that people tend to put off yet have longer-term consequences (such as signing up for a retirement plan).
Goals: focus people on their goals and the reasons for them. And have them be the Drivers
In the short-term, framing choices in the context of losses vs gains
since people work harder to prevent losses than for gains (“Mental Accounting”)

26. Tips for Coaches
Clients may continue to engage in financially harmful actions and may fail to change course because of the perceived pain or losses involved, even if it could prove beneficial in the future.
Try and frame not taking needed actions in terms of potential losses (rather than gains). What happens if you don’t do this? Reduce the Cons and increase the pros
Shifting the point of reference can change perceptions of losses and gains.

27. Prochaska 6 Stages of Change
(James Prochaska, PhD and Janice Proschaska, PhD)

28. Prochaska’s 6 Stages of Change
Pre-CONTEMPLATION
CONTEMPLATION
PREPARATION
ACTION
MAINTENANCE 6 5 4
RELAPSE 3 2 1

29. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
PreCONTEMPLATION

30. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
PreCONTEMPLATION
Not currently considering change:
“Ignorance is bliss.”

31. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
PreCONTEMPLATION
Not currently considering change:
“Ignorance is bliss.”
Validate lack of readiness
Respect where they’re at and use less pressure
Clarify: decision is theirs
Encourage re-evaluation of current behavior
Reduce defenses
Encourage self- exploration, not action yet
Explain and personalize the risk

32. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
CONTEMPLATION

33. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
CONTEMPLATION
Ambivalent about change:
“Sitting on the fence.”
Not considering change within the next month.

34. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
CONTEMPLATION
Ambivalent about change:
Fear of failure
“Sitting on the fence.”
Not considering change within the next month.
Validate lack of readiness
Clarify: decision is theirs
Ask lots of questions
Encourage evaluation of pros and cons of behavior change (what happens if you don’t do this? what happens if you do this?)
Identify and promote new, positive outcome expectations

35. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
PREPARATION

36. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
PREPARATION
Some experience with change and are trying to change:
“Testing the waters.”
Planning to act within 1 month.

37. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
PREPARATION
Some experience with change and are trying to change:
“Testing the waters.”
Planning to act within 1 month.
Identify and assist in problem-solving re: obstacles
Help client identify social support
Verify that client has underlying skills for behavior change
Encourage small initial steps

38. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
ACTION

39. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
ACTION
Practicing new behavior for 3 – 6 months

40. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
ACTION
Practicing new behavior for 3 – 6 months
Focus on restructuring cues and social support
Bolster self-efficacy for dealing with obstacles (confidence)
Combat feelings of loss and reiterate long-term benefits

41. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
MAINTENANCE

42. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
MAINTENANCE
Continued commitment to sustaining new behavior
Post 6 months to 5 years

43. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
MAINTENANCE
Continued commitment to sustaining new behavior
Post 6 months to 5 years
Plan for follow-up support
Reinforce internal rewards
Discuss coping with relapse

44. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
RELAPSE

45. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
RELAPSE
Resumption of old behaviors:
“Fall from grace.”

46. STAGE OF CHANGE
CHARACTERISTICS
TECHNIQUES
RELAPSE
Resumption of old behaviors:
“Fall from grace.”
Evaluate trigger(s) for relapse
Reassess motivation and barriers
Plan stronger coping strategies

47. Why the Stages Work It serves as an Index of readiness
Tells WHEN people change
It’s dynamic, not static
Inclusive, empathetic, optimistic
Guides matching of process to the client’s needs and mindset to get them to the next place

48. The Impacts of this Model
The research findings:
The more people understand where they are at and know that the coach appreciates where they’re at, the more they can engage in change thinking
Progress becomes exponential once you get started
Progress in 2 areas you’re 3 x as likely fro 3rd
Takes at least 6 months for behavior to take hold
The bigger % of the effort is outside of the sessions (tools and homework)
Sources of personal freedom is intentionality. The best predictor of future behavior is what stage their intentions are at.

49. Discussion Table Discussions:
Describe a personal experience of your own with scarcity – or someone close to you- and how that felt and how it played out.
Describe an issue you or something you know has been working on and what stage of change you or they are in?
What are the potential impacts of all of this for working with clients?

50. Table Discussions:
Think about your average client, can you describe a situation of a client that’s in a pre-contemplation stage and what has and hasn’t worked to move them to the next stage? Someone at the contemplation stage? (Same questions)
Do you think it would be helpful for your staff that work with clients? How and why?
Think about a client who has moved through all of these stages, what were the shifts like? What were their challenges in relation to this?
Think about something you or someone close to you has been working on/ struggling with. What stage are you or they at? What has that been like?
What do you think the impacts might be for your clients? What might be challenging about introducing these concepts with staff and clients? How might it affect your engagement and results?

51. Debrief and Take Aways
What are your takeaways about all of what we’ve learned and discussed?
What questions do you have?

52. Next Steps
Read the book, Scarcity: Why Having Too Little Means so Much!
I will send out the deck
Webinars and resources on other models to come:
Strengths-based Coaching Models
Motivational Interviewing
NUL’s curriculum on Cognitive Behavior Therapy (CBT) coming soon. We will be sharing much more on this later this fall.

53. DAWI & the Legacy Business Initiative
Cy Richardson:
The Issues:
National small business closure crisis
Minority-owned business challenges
Legacy Business Initiative (LBI)
Partnership of Democracy at Work Institute, NUL and Citi Community Development
Recent report: “Legacy Business Initiative: Project Results and Recommendations”

54. The Nationwide Mortgage Collaborative
Springboard CDFI/National Mortgage Collaborative
Technology for mortgage readiness and affordable mortgage shopping (product and pricing search engine).
Used by consumers and housing counselors.
Simple user interface
Working with and set up for nonprofit housing counseling agencies
Provides significant counseling fees for HUD-approved counseling agencies.

55. Overview
All types of loans: Bank CRA, Conventional, GSE, FHA, VA, USDA, and Specialty Affordable Loans- ALL in ONE Place
Several lenders involved:
Citi, US Bank, Wells Fargo
Plus CDFIs, credit unions, regional banks, private investors
Includes local products in each market and works with NP counseling groups to incorporate the loan products they may have with partners
Works with all the City, County and state D/P assistance programs
Transparent process for clients and agencies and tracks results

56. State Operational Status
As of 2017, fully operational in:
CA, AZ, TX, FL, and IL
Most recently as of August, also:
CO, OR, TN
By the end of 2017 fully operational in:
KS, AL, ND
In 2018, anticipate getting licensed and active in:
WA, ID, OK, AR, IA, KY, WV, NY, ME, MA, CT, GA, SC

57. Fees for Counseling
Become a Member and can get access to the system and products
Counselors can use the system with their clients and get paid significant fees! Up to $1,300 per closed loan!
$500 per closed loan for HB Ed and Counseling
$800 for Safe arbor Loan Packaging
Ex. 30 new closed loans/yr = $39k in revenue
2-3 weeks to receive payment after closing and completed counselor checklist
Partner branded mortgage readiness and loan shopping and application technology
San Diego Urban League a counseling partner in the Pilot

58. Next Steps
Webinar to come this fall from National Mortgage Collaborative. Date TBD.
Webinar to come on DAWI Report and Initiative.