De-Risking Too Much Choice in Organizational Decision-Making, 2040’s Ideas and Innovations Newsletter, Issue 184
Issue 184, October 31, 2024
You are ready to publish an article in the content section of your website and you go to GPT4 to game the system and fine-tune the title with SEO phrases to attract the most search traffic possible. You cut and paste the article into OpenAI’s tool, enter the prompt and voila! GPT spits out 20 choices. It then asks you if you want it to expand on any of its choices. You review the list but it’s hard to know what to prioritize and what would and wouldn’t work. Instead of feeling as if you accomplished the task with a smart tool, you feel overwhelmed by the choices.
To recover, you take a break and go to Starbucks, only to be confronted by over 30 coffee blends. Defeated you go back to work and google some help for the SEO dilemma. You get 27 pages of responses. Maybe influencers could help.
But which of the countless self-professed business thought leaders do you tune into?
Or TikTok?
There are over a million content creators on everything, anything and nothing.
Fast forward to the end of the day, it’s no wonder that so many people (read: employees and customers) are mentally exhausted by the constant influx of choices. We are overwhelmed by too much choice. Too many makes and models of cars to buy. Too many possibilities for streaming entertainment; which ones do you pay for? If you make your personal investments, what online platforms do you choose, and what do you buy?
Choice in the Organizational Context
Two years ago, we raised the red flag for organizations that offer too many choices to their current or prospective customers. We cautioned the number of choices may endanger the brand loyalty they were seeking to create. There’s a law about choice based on psychology; if there are more than three choices to choose from, the result is frustration and anxiety.
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Nothing has changed over the past two years: The choice dynamic plays out time and again in organizational decision-making to the point of near or total paralysis. Imagine a team or organizational leader having a dozen choices, each with their own benefits and risks. What process can you possibly follow to determine which choice is the right one?
Which enterprise software solution, customer relationship management system, web host, content management system, accounting, invoicing and billing, internal chats, and workflow tools do you choose to invest in? And it’s not just the technology-based systems (although mostly everything today has technology at its core). Consider human resources tools, training programs, and everything else needed by an organization. Where do you even start?
In our client work, we have become a trusted source for those seeking help in their decision-making. We continue to focus on demystifying technology, content, publishing, marketing, finance and other platforms to help a client’s organization make the right decision. We help clients understand and guide them on tech-based systems that correlate needs to the available choices. We also help them document, amend and refine their work processes to ensure that processes and systems match.
When Choice Is Perceived as an Asset
Too much choice is often a fallback for sales. Conversations with business development staff are great in revealing how any number of solutions offered by the organization appear to meet every possible need in every possible way. Any client can get quickly caught up in dazzling, optimistic sales jargon and pressured into making a decision. We have observed that clients are often ready to sign on the dotted line for Cadillac systems when they only need the Civic. Thankfully, they sought our help and counsel to navigate the slew of choices and make solid decisions that matched their current and near-term business needs. All that work resulted in a multipart blog series offering help and guidance on process.
The insight here is that humans fall for good marketing and sales pitches. Given the impressive number of choices to solve our problems, we default and rely on what others tell us. We seek recommendations from our peers. We seek to help our decision-making process by asking Google or any AI chatbot. We do nearly anything to resist our accountability to make a choice. That’s why marketing and sales can be so impactful and successful. It communicates urgency and potential loss to competitors if we don’t make a choice. If the pitch is so good that we fall prey, we often find ourselves with something we didn’t need or something that has so many bells and whistles that we will never use.
Why Too Much Choice Matters
The crux of this decision-making exercise is how to de-risk making a choice. Who or what do you trust? How do you even find the solution you are looking for? Trade shows have hundreds of exhibitors, many offering a variation of the same solution. Ultimately, choice is complicated or deferred by the negative anxiety of making the wrong choice — particularly when capital investment is in the picture.
The burden of managing too much choice addresses a growing pain point in organizations. It’s not just a transactional and operational issue, it is a psychological issue that transcends into practical business challenges. Knowing how to manage too much choice provides an actionable framework for better decision-making, which is a modern leadership challenge. Choice and too much of it is a roadblock for transformation and change management, topics that we focus on in our book The Truth About Transformation.
Barry Schwartz, author of The Paradox of Choice, was a visionary at the time when he wrote his iconic book. A psychologist by training, his research revealed that when confronted by too much choice, we tend to default to make no choice from what is new or that we have discovered. We fall back on what we already know and what seems comfortable. Or we walk away making no choice. Which doesn’t bode well for the introduction of new products and experiences. But when you have 24 versions of Triscuits or more than 85 flavors of Oreos, you have to wonder, what’s the point?
Analysis Paralysis
From a business perspective, so much choice can lead to organizational paralysis. From a leadership perspective, decision fatigue can derail effectiveness. The most common paralysis is caused by not having the foresight or knowledge to leverage transformation faced with a mind-boggling choice of so many solution providers. New human resource systems, new health benefit packages, new business insurance packages, new AI assistants, etc. Yet, making the right decision is a classic example of de-risking choice to remain competitive in a disruptive and rapidly evolving marketplace. Being a perfectionist in making business decisions can backfire big time when it leads to expensive inaction. The fear of making the wrong choice and a bad investment results in costing money.
Today’s leaders require new skills beyond strategy and operations. They need a fundamental understanding of the digital tools that organizations have become so dependent on. Take retail, for example. Gone are the days of a Mickey Drexler who led Gap and J.Crew to fame as a gifted merchant. Those brands later become marginalized because of a lack of digital prowess. The same goes for media and association businesses. Digital intelligence is table stakes. So, there is a dichotomy of a younger generation workforce with intuitive digital skills and no experience, and veteran leaders with valuable experience and no digital skills. As much as we want to hold onto what’s comfortable and familiar, organizations are not about the past, they are about what to do next.
Burnout
Then consider the workforce faced with too much choice. What newsfeeds do they choose that provide impartial, unbiased information about their industry? What’s the price of employee burnout from being forced to manage a tech stack of multiple tools and systems? With short-term pressure to exceed expectations, there can be a serious problem of cognitive overload by continuously optimizing the business and the threat of productivity loss because of constantly switching back and forth among digital tools that don’t talk to each other.
It has become tempting and often commonplace for organizations to depend on AI and automation tools to solve problems and improve efficiencies. Marketing messaging can be written by ChatGPT; sales and promotional materials can be generated by Claude; spreadsheets and sales projections spit out by Llama; workflow tools organized by Copilot; a three-year strategy plan can be generated by Perplexity; and all graphic design created by DALL-E. We all know that the output of these technologies is only as good as the input, and their instantaneous brilliance can lead to fatal errors. Without an overlay of common sense and wisdom in understanding how the past can reveal insight about the future and accounting for the often-unpredictable human factor in AI prompts, machine learning proliferation of too much choice can be a risk.
De-Risking Choice
Organizations need to be clear about their market orientation and shared purpose and ensure these core mandates are not compromised by experimenting with systems and platforms that produce too much choice without context. Above all, organizations need a strategy for curating options without limiting the potential for breakthrough solutions. Along with curation, tools should be selected that empower, match the actual needs clearly and definitively and not overwhelm. Not every employee is as infatuated by shiny new platforms that are hard to use. When it comes to searching for answers, focus on a balance between exploration and execution. Also, agility should be balanced with reducing choice overload. Finance needs to weigh in on budget allocations and the hidden costs of maintaining too many options.
An emerging job title is the prompt engineer. The AI prompt is essential in identifying clear and meaningful criteria to support the goal. And it’s critical to identify how automation tools and AI can exacerbate a problem, not only speed up decision-making. At 2040 we stick to our position that when things go wrong or not as expected, chances are it is the human factor, not a system or platform that is responsible. Sometimes we do not see or understand our own very human limitations.
De-risking choice is only going to become a more important skill and strategy. Think of how to please customers first. If you have breakout sessions at a conference that, by definition, overload choice, ensure that there are recordings of all the sessions so attendees can benefit from the abundance of choice. If you offer customers new products, limit the number based on what they need not what you think they need. Simply speaking, offer them a reasonable choice.
And lighten the load on your employees by using tools that make their work easier, faster and smarter. We’re not advocating you put your head in the sand in the spirit of ignorance is bliss. But be sure you have experts on staff that understand the sources of so much choice and who can act as trusted guardrails to help make the right decisions so your organization can maintain high performance. And it’s useful to remember that 98% of startups fail. That could limit your own growth and operational efficiency. As our teachers told us, “Choose wisely.”
Explore this issue and all past issues on 2040’s Website or via our Substack Newsletter.
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We have compiled a playbook for organizations of all sizes to consider all the elements that comprise change and we have included some provocative case studies that illustrate how transformation can quickly derail.
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