Too Many Options

When choosing a flavor at an ice cream store you may have struggled because so many were appealing. Business decisions have a similar issue. Only in business the stakes can be much higher than whether you end up with something that taste good.

The Impact of Too Many Options

Whether we refer to it as too many options or too many choices the real issues is not what we call it but what it does too us. It is difficult to know exactly the correct number of options to consider when making a business decision, but it is clear that at some point more is not better. There have been experiments done by psychologist to determine the impact of the number of options on peoples’ ability to make a decision. One well known study involved displays of jam for people to sample. In summary, while more people stopped to sample when there were 24 choices, more actually bought when there were only 6 choices. 30% percent of the group sampling 6 jams purchased versus 3% of those who sampled 24 jams. A sizable difference, don’t you think?

What Does Jam Have to Do with Business?

Quite simply, while our hearts may lead us to believe more options are better, the truth is that many times a business can be paralyzed in making a decision of the best course of action. Obviously the more choices there are the more likely there will be a diversity of opinions in a group decision and most likely more difficulty forming a consensus. Yet, just as in an ice cream store, too many choices can make it difficult for even one person to make a decision. Quite simply, whether a group or an individual, too many options can complicate matters and cause decision paralysis.
decision-paralysis

In an earlier blog (Organize – Everything in It’s Place) I mentioned a technique for getting organized. In summary, the technique involved separating things in to 3 piles – one for definitely keep, another for maybe keep, and another for definitely discard. When making decisions the same concept can be used to pare down the number of choices.

Segregate the available choices in to:

  1. Definitely consider
  2. Maybe Consider
  3. Definitely do not consider.

When you do this you will realize that those in group 3 were never really worth serious consideration and only cluttered the decision process. Now take group 2 and redo this process. Again you will likely see some options that really don’t make much sense to consider. You should soon have it down to a manageable number of options to consider. With a group this focuses the debate and for the individual it helps identify the impact of the various choices. This simple technique helps avoid the curse of too many options and eases the process of making choices.

What about your company? Is there an on-going struggle to make decisions because there are too many options?

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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