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Become a Better Decision-Maker

Become a Better Decision-Maker

January 09, 2014

We all like having choices.  But how many choices do we need?  And how do we decide among them?  If you decide to continue reading, you’ll find out how to become a “bell ringing” decision maker. 

 

The Single Choice Conundrum  

 

If you’ve ever listened to a teenager making a decision, it’s usually a very narrow choice: Do I go to the party or not? Teens are myopic… to do X or not to do X. This is called a “single choice conundrum” where they only have one option, and the decision is limited to a “yes or no” regarding that single option. They usually don’t consider other options, like going to a movie, going out with another friend, and so on. 

 

Recently, my wife and I were deciding whether or not to spend our limited vacation time on the West Coast. The problem was that traveling across the country required too many days to make the journey worthwhile. Hmmm… what to do? Then my wife added another choice: why not spend our same limited vacation time doing several things we really enjoy closer to home? It was another option and a good one. And we only reached our decision by thinking beyond the initial “yes or no” conundrum.

 

This true story of a man buying speakers at an audio store really nails it on the head.  He came across a wonderful pair of $500 speakers. Expensive, but desirable…and he now had to make a decision whether or not to buy them.  He pondered the idea of spending so much money on a pair of speakers, and he simply couldn’t make up his mind. Then the sales clerk offered an alternative…why not buy $300 speakers and use the remaining $200 to buy a ton of music which he would enjoy? As soon as he widened his option the solution became crystal clear.

 

600% more effective with this one idea

 

A study at the University of Kiel in Germany supported the idea of having more than a single choice.  Researchers and professors tracked 83 decisions made by a mid-sized German  technology company over 18 months to see how the decisions worked out. You see they had to give ongoing reports to their major investor. Herer's the shocker - they found the decision log several years later and were able to determine if they were good or bad decisions. After they reviewed the results they rated them as “Good,” “Satisfactory” or “Poor.” Listen, what they learned was that decisions with multiple options were rated “Good” six times more often than “either/or” decisions.  Did you catch that? Six times better just by adding one or two more options to the mix!

Such a study supports the fact that we like having more than a single option. And it makes sense… just look at the three choices of entrées at weddings or the five sizes of popcorn at a movie. 

We do like choices, right?  

 

Too Many Choices is bad?

 

The flip side of too few choices is having too many choices. In their book Decisive, Chip and Dan Heath point out the decision overload that people experience when walking into an ice cream store and being confronted with 24 choices of ice cream… which is 31 at Baskin Robbins.

 

The Heath brothers also mention the well known story of a grocery store that offered a complimentary tasting. The first day, the store offered tastings of six flavors of jam. The customers loved the tasting, so the next day, the store offered 24 types of jams. Customers were even happier tasting more

jams.

 

The difference in decision making, however, showed up at the cash register. Customers who chose among six jams were also six times more likely to purchase a jar rather than the people who chose between 24 jams. In the end, customers enjoyed tasting lots of jam, but were overwhelmed when it came to making a purchase decision. Result: many customers didn’t purchase any jams.

 

Minimizing choices to get better results makes sense.  Do we really need 20 types of Head & Shoulders? Apparently not. When Procter & Gamble went down to 15 versions of Head & Shoulders, sales increased by 10%.

 

Two Parts to the Decision Making Process

Sure, deciding between three sizes of popcorn is easy, but most business decisions require that you:

  1. Do your due diligence
  2. Stop the process and make the decision

Checking and considering is important. BUT the most successful entrepreneurs know when to stop considering and “pull the trigger” on a decision — recognizing that they will sometimes make the wrong one.  

 

I find that many people, when faced with a decision, get caught up in analysis paralysis. They waver between their choices from dawn to dusk. That’s why I say, “There’s no joy like getting out of doubt!It’s true… there’s a real sense of relief that comes from making a decision. In fact, the bigger the decision, the greater the sense of relief. That’s why at Brand Launcher, we have a bell in our office that we ring when we’ve helped a client make a big decision.

For example, we recently worked with a client who was trying to decide whether or not to move into a new, larger facility.  Such a move would slow them down, cost money, and have a significant risk factor involved. So we did our analysis, reviewed both sides to look broadly at all options, and considered various possibilities.  Finally we helped them make the decision. They chose to  move into the larger facility and to hire new employees. Then they rang the bell. Good or bad doesn't matter as much as making the choice. "He who makes the most decisions wins!"

 

We continued working with this client as he sought to expand his staff. He wasn’t sure whether he could add additional employees at $40,000 a year.  So, we introduced another option into the “either/or” decision by suggesting that rather than committing to $40,000, he instead try a three month trial period at only $10,000, which was the same rate but for a shorter time and a smaller initial commitment. Adding another option made a huge difference.  He went with the additional choice and became a two-time “bell ringer.”  

 

Choices and Making Decisions

 

In the end, it’s simple.

  1. We all like having some choices, but too many choices is not necessarily better. Many choices can become overwhelming.  Look to expand from a single choice to a few good options.
  2. When making a decision, take some time to do your due diligence. BUT avoid analysis paralysis by forcing yourself to step up to the plate and make that decision.  Don’t sit on the sidelines reviewing the data forever. Make a decision, then find a bell and ring it, or contact us and we’ll ring one for you!  

 

Taking you from where you are to where you want to be,

 

Jon