Decision making can be filed under the category of “things I constantly struggle with.” Even when I’m feeling good about decisions I’ve made, I revisit them constantly. Some people even build whole careers on being courageous decision makers. Since Lucro prides itself on being a platform that helps healthcare organizations make better decisions, faster, I want to share the psychology that influences our product with you.
Luckily, a long time ago, I got a psychology degree, so researching really tickles my learning bone.
Step 1: Include the right [number of] people at the table
The Harvard Business Review did a study that found that, on average, 5.4 individuals were needed to sign off on major purchasing decisions. In the complexity of healthcare, the wisdom and subject areas of stakeholders go far beyond the c-suite.
Here are some things you can do today to increase the effectiveness of gathering consensus:
Step 2: Know your exit criteria
In the ever-changing startup world, technology companies know this idea of failing fast well. To put it in decision making terms -- what would automatically disqualify an option, regardless of how sparkly it is? The aim here is to quickly shortlist options so you can get to the real meat of suppliers and solution sets that will actually solve your problem. For the speediest human sorting machine, consider phrasing your exit criteria into yes/no questions.
Here are typical examples (some are more obvious than others):
- Does this fall within my budget?
- Does this interface with my existing technology? Does it need to?
- Is the solution easy to implement?
- Is there an in-house solution that could solve my problem?
- Has the market tested this solution? Do I care?
- Are their sales reps annoying? (maybe this is just me)
It’s important to get your list of potential options down to a manageable amount. Too many options are overwhelming - enter analysis paralysis.
Step 3: Avoid analysis paralysis
Why is it so important to get your options down to a reasonable amount? What amount is reasonable?
Choice Overload is a real thing.
In 2000, research found that too many choices make it harder to make a decision. AND once you finally do, you’re more likely to regret the decision you made. The Harvard Business Review replicated this study and found that “increased choice decreases satisfaction with matters as trivial as ice cream flavors and as significant as jobs.” It’s no wonder that The Cheesecake Factory sends me into a panic every time or why we always get Chipotle for lunch at Lucro (cough cough).
Attribute Overload is also a real thing.
This same concept applies to attributes. Research states that consumers make decisions more quickly and with more resulting satisfaction when there is an attribute alignment and cognitive overload is lessened. For example, products arranged into Good, Better, Best (e.g.: computers, cars, cell phone data) streamlined decision making. A consumer shouldn’t have to waddle through competing attributes that convolute the decision-making process - do I want a sunroof or leather seats? Another strategy includes questionnaires or forms that guide buyers into a recommendation. This strategy lessens the regret factor, and one that I’ve found is mostly deployed by my financial advisor, so I don’t get squirrely when the market changes. After all, I did my risk comfort assessment!
Next week, we’ll try to get closer to defining the sweet spot, backed by science - how do you know when you have too many cooks in the kitchen?
Do you have an opinion on this topic? Let us know below!
Client Happiness Extraordinaire, Lucro