A632.2.3.RB_Davis Carl  - Sheena Iyengar: How to Make Choosing Easier

Hello readers! This week we were tasked with watching Ms. Sheena Iyengar’s TED talk about making the action of choosing easier. (TED, 2011) As an interesting aside, Ms. Iyengar’s job description on the TED website is Psycho-economist. If you take the time to listen to her or read some of her work, I think you’ll see the irony.

Ms. Iyengar’s lecture begins with a description of a supermarket in California that was renowned for its extensive variety of products and extremely wide selection of those products. One example cited was that there were 348 different kinds of jam on the shelves. (2011) Sheena was curious to know how people reacted to that number of choices and she got the manager to allow her to set up an experiment.

Tastings were conducted with six jams available for tasting and then when there were 24 available. The number of tasters was tracked and then the number of those who then purchased a jar of jam were tracked. More people tried the jams when there were 24 open for a taste. However, more people bought jam after tasting from the table with six offerings. Less offerings, more purchases is a theme carried on in a study Sheena also did regarding funds in which to invest 401(k) monies. Plans with more choices had fewer participants. (2011)

After looking at these examples and others, Ms. Iyengar concluded that there were four ways to help people facing choices with an extreme number of offerings. Their names are Cut, Cement, Categorization, and Condition for Complexity.

To perform Cut, as the name implies, one should reduce the number of choices facing the chooser. Ms. Iyengar mentions Proctor & Gamble reducing the number of varieties of a dandruff shampoo from 26 to 15 and seeing a sales increase of 10%, as well as a cat litter company reducing the number its offerings and seeing a jump in profits of 87%! (2011)  It appears that while we like choice, we really like some choice, not unlimited choice.

When applying the Cement technique, it is necessary to paint a picture for the chooser so they may see the long term effects of making the choice you would like them to make. Sheena notes a company that saw a dramatic increase in retirement fund participation, and an increase in monies deposited monthly, after adding a cementing paragraph to their website page where elections where executed. By reminding the participants that adding just a little more to their contribution now would allow them to live more than “just comfortably” in retirement they filled in what may have been a gap and made a strong connection.

Categorizing has a similarity to Cut. Both reduce the number of choices available to the chooser. However, in categorizing, all of the options remain available. The choices are grouped into smaller categories which are more easily reviewed and digested, as it were. The illustration of a grocery store magazine rack and the hundreds of magazine titles vying for attention was presented.  Amazingly, 600 magazines divided into ten categories is easier to choose from than 400 divided into 20 categories. (2011)

The last technique, Condition for Complexity, resembles the use of a building block approach to complex choice situations. A car manufacturer’s website, with a “build your own car” capability, was the illustration cited by Ms. Iyengar. (2011) Each different area of the car had a varying number of choices from four to 56. The total number of areas to make decisions about numbered 60. By checking at what point web visitors began simply hitting the default choice presented as they moved through the 60 choices, the point where the chooser had basically quit choosing was noted. If the areas were presented in a random manner, such as an area with four choices was followed by one with 40 and then one with 15, the chooser opted for the default much sooner than if the number of choices steadily increased from small to large. The chooser was able to handle small increases in number better that randomly, it appears. (2011)

As the leader of a team, I have found great success with the Cement technique. Helping people see the possible outcomes for choices is a powerful tool. Additionally, they derive the capability to start to see the end-states of decisions they face and own the choice even more. I would add that I utilize the Categorize technique and then apply the Cement technique. Anything that helps me and my team get a better grasp on the data or choices.

In my personal life, I have employed the Condition for Complexity technique in dealing with situations like home or car purchases or other complex choices with long-term implications. I like Cut and Categorize for daily decisions. They allow for getting decisions done quickly. In reality, I practice Cement so much that it seems like second nature. I just realized that.

I think a large part of making a good decision is having the situational awareness to know what tool to apply and what the probable implications of the decision. Knowledge is power, especially when making a choice. Applying the above tools will only help in that task, as well.

TED (Producer). (2011, January 18, 2016). Sheena Iyengar: How to make choosing easier. [Lecture] Retrieved from http://www.ted.com/talks/sheena_iyengar_choosing_what_to_choose

A632.1.4.RB - Multistage Decision-making

Good decisions require a solid foundation.

Hello followers! Welcome back to the Educated Leadership blog for another nine weeks of growth and learning. We will be focusing on improving our decision making skills during this term.

As part of our reading, we are looking at the ways some researchers utilize formulas to improve their chances of making a successful decision. As noted early in chapter three of our text, “As decision makers we are prone to be overconfident in our occasional successes and overgeneralize the degree to which good intuitive solutions to some dynamic problems also offer good solutions to other problems.” Hoch, Kunreuther, & Gunther (2001, p. 39)

To counteract that overconfidence, defining measures and converting them into formulas can be employed as a way to quantify results. Assumptions must be made and documented so all involved understand the basis for the math.

Richard Bellman of RAND Laboratories is credited with proposing this tool for improving decision making and calling it dynamic programming. (2001) The learning point here is that dynamic programming is a tool, not a solution, to make better decisions.

Given that background, I know that I utilize some tools to attempt to maximize the chances that my decisions will result in positive consequences. Depending on the complexity, familiarity, and perceived level of seriousness, the amount of research I do will increase or decrease.

There are times when I utilize what could be considered a formulaic resolution process. As I ponder my managerial and personal decisions of the last few weeks, the times formulas come into play seem to be in situations regarding decisions involving numerical requirements. Head count projections which lead to hiring and lay-off decisions as well as financial issues at both home and work are the easiest examples.

Taking that a step further, I know I am methodical in making decisions that impact perceptions or feelings of those around me.  I tend to play “what if” scenarios and try to predict the ways people will react to a particular decision. The data I use is often that which I have collected over time, but some comes via reading and classes I have taken regarding human interaction.

All of that is compiled into something resembling intuition and I make the best decision I can with the information I have.

The time allowed to make a decision is such an important factor. Emergent situations require that we make decisions sometimes solely based upon experience and intuition. Many times, the best we can hope for in those situations is that our decision buys us some time to gather a quantity of unambiguous data that we can then alleviate the situation further or, hopefully, completely. It has been my experience that true emergent situations occur rarely. Taking a moment to pause and reflect has been a hard learned but useful tool.

Part of my personal maturation in decision making has been my level of comfort with not rushing to a decision. When I mentor new managers at my company I make a point of talking with them about this subject. The times I have “jumped the gun” and actually created more work for myself or others stand as reminders for me. It is good reinforcement for me when I now see others reaping the ill-benefits of making a decision without a more developed picture. Talking over situations like this with other managers allows us to share perspectives and build knowledge to use later.

I have been lucky to get the opportunity to experience a couple of decision making games that I would recommend. Both do a great job of illustrating the ways that attempting to apply formulas to predict outcomes is only as good as the information entered.

One is a game used in teaching Systems Thinking skills and it is called “The Beer Game.” Senge (1990) The necessity of good information and clear communication are blatantly demonstrated as one attempts to keep cases of beer ordered and moving on to retail stores. If you ever get the chance, play.

The second game is called “Gold of the Desert Kings”. (Eagle'sFlight) Again, one is provided with partial pieces of information and the tendency for the human mind to fill in gaps with data, whether it is correct or not, is deftly demonstrated. I highly recommend the experience.

I am privileged to have had the chance to receive the training I have experienced. However, without exercise and application, the skills atrophy. It must also be said, that even with all the experience and learning I have done, there are situations each week that I face that provide stress and the need to exercise patience and decisiveness. Interaction with people is always dynamic, be they friend or foe.

Since reading this week’s assignment, I have spent time considering my decision style. My environment and responsibility level require that I exercise diligence and some type of predictive skills when making decisions. Consideration of how my decisions will impact coworkers, bottom lines, customers, and the company are just part of what I have to do. To assist in that, company processes attempt to add a level of repeat-ability to everyday situations. With those tools, it is easier to handle the “one-offs” that pop-up from time to time.

Optimal dynamic decision making analysis is an excellent target to reach for as a leader. It takes practice and a willingness to be open to information paths from wherever one can get the best, not the most, information. Refining the tools used and the databases we hold as knowledge is an ever ongoing process for me.

A word of caution: be aware of the pitfall known as “paralysis by analysis.” It is possible to overthink a situation. It is possible to use the need for “just a little more information” to put off making a decision that may be distasteful. When your head and your “gut” or "intuition” are saying the same thing, it’s time to make the call.

Eagle'sFlight. Gold Desert Kings - Journey In Search of Results.   Retrieved from http://www.eaglesflight.com/corporate-training/team-building-conference-programs

Hoch, S. J., Kunreuther, H. C., & with Gunther, R. E. (2001). Wharton on Making Decisions. Hoboken, NJ: John Wiley & Sons.

Senge, P. (1990). The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Currency Doubleday.