How Decisions Are Made


Most people don’t think – they just think they think.

Here are some interesting ideas about how decisions are made. (The first three come from a book about web site design by Steve Krug called ‘Don’t Make Me Think‘).

  1. People take the first choice they can find that doesn’t have obvious problems. This means we don’t bother to consider alternatives and get the best choice. We just look down the first road we come to and if we can’t see any big hairy monsters before that road disappears around the bend, then that’s the road we go down.
  2. This is called satisficing (a cross between satisfying and sufficing.) It produces the first reasonable option – not the best.
  3. People don’t bother to figure out how things work – we just muddle through. If we hit on a way that’s inefficient, or cumbersome but it works we tend to stick with it.
  4. Daniel Kahneman won the Nobel Prize in economics for discovering such things as the fact that people will travel 20 minutes to save $5 on a $15 calculator but won’t spend the same20 minutes to save the same $5 on a $125 jacket. Thus tossing to the wind the basis of economic thought – that people make decisions based on their economic best interest.

Takeaways:

  • If you want customers to make buying decisions – make it easy for them to buy. One CEO referred to all the little choices buyers have to make to complete a sale as ‘Moments of Truth’ when they could just as easily decide not to buy at all. And there may be dozens or even hundreds of these moments in the course of any sale. The fewer the better.
  • Don’t expect that your employees are making decisions based on analysis or rational deliberation. They’re likely to do what’s worked before or what seems easiest. If that’s not good enough, it will be up to you to put systems in place to make it easier to make the best choice rather than just the simplest.
  • Once a decision has been made people will stick with it (or make the same one again) as long as they can. Don’t assume they are continually reevaluating and looking for improvements. You do things that way – but you’re an entrepreneur. So it’s a good idea to forcibly set aside time for re-evaluation of key decisions.
  • Once in a while it’s a good idea to take a decision inventory. Revisit what decisions you’ve made, how they were made and if they need to be adjusted.
  • Let the simple choices be mind-numbingly easy. Don’t force people to analyze and justify their decisions when the easiest is good enough. Whoever said ‘If something is worth doing it’s worth doing right,’ never ran a company.
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