Information Overload and Decision Making

John Payne, a Professor at Duke Institute for Brain Science and gave an excellent TEDPhoto of John W. Payne talk around information overload and decision making. At the bottom of the page is a link to the 10 minute video (where there is a transcript as well).

As a quick summary, the Professor states that the problem we tend to face in decision making is not scarcity of information (in fact to the contrary we often have information overload). He claims the main challenge is scarcity of attention.
(My view is that the word “attention” may be a little narrow and covers a number of items (some or all of which may be present) such as time availability, ability to understand or process the information provided and capacity to make trade-offs.)

He uses a good example of information overload in decision making in talking about the 4 medical plans offered to him at the University – each of which had 33 different features such as additional costs for care and ambulance services. A second more common example is simply trying to select a mobile phone provider and plan – the options are dizzying and often hard to compare.

The most common results of this excess information are:

  • Decision avoidance or procrastination
  • Selection of the default (for instance staying with what you have always done before or maintaining the status quo)
  • Reverting to simple heuristics and using less information or using it in a less complex way (for instance: is it acceptable or not).

Human beings have survived on heuristic-based decisions for millennia and often they result in very good decisions – but not always. Sometimes they can lead us to focus on some pieces of information and ignore others. What will make us focus on a specific piece of information may be based on our values, but may also be based on the context in which we are making the choice – which includes the way in which the information (or decision selection)  is presented.

John provides a number of ways of dealing with this. Firstly, the providers of the information should aim for “cognitive fluency” – basically how well the information is presented visually; as well as “emotional fluency” which is how well you are able to interpret the information. Lack of cognitive fluency may lead to the data being ignored and lack of emotional fluency may lead to incorrect processing of that information.

A second (and to me more important) piece of advice is that one should try and get in touch with your values and objectives in taking the decision before one even starts examining the information provided. This aids in making “value-based decisions”. And in a world crowded with info, this becomes increasingly more important.

He gives a simple example in the video using 3 cards (gold, silver and bronze) and writing prioritised objectives on each of them. He also demonstrates good use of visual information in the video by referring to a display notice detailing how environmentally friendly is a certain car.

One area John briefly touches on, but is worth considering in more detail, is “choice architecture” that is how the decision is put across, including what is the default. There are many examples of where a very simple change in choice architecture may have a dramatic effect on the results. One example of is this architecture is in how people are asked if they wish to donate organs. A simple default opt-in to the programme (requiring a conscious opt-out action) has been shown to have significantly better results than the opposite (default opt-out). Thalers book “Nudge” also gives many examples of this. Obviously ethics and values can become important considerations here – but that is the topic of another publication.

This work is of particular importance to us at the moment as we are currently undertaking work in the UK where we are assisting local government in implementing “choice” policies for vulnerable adults who receive support from the State. The idea that too much choice may not be good, seems to have been ignored by the Department of Health – especially considering that many of these people have less mental and/or emotional capacity than the general population. The second area where it may be important in this work will be in helping these Local Authorities in constructing decision architecture around the choices.

If you still have time, enjoy the video – you will find it at the link below.

John Payne on TED

The science around decision making, managing information overload, and complexity and choice architecture is important in many aspects of our personal and business lives. At Genesis we do not claim to have all the answers, but we are able to help you think through the issues and consider how to find optimal solutions to the challenge.

 

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12 Responses to Information Overload and Decision Making

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  4. Professor Payne’s interesting talk around information overload and decision making doesn’t make decision makers look very efficient.

    This observation gets plenty of backing. A 2005 study published in Harvard Business Review found that 55% of leaders are associated with below-average corporate performance. Just 15% of the individuals studied over 25 years – a period of growing business education – showed a consistent ability to manage innovation and organizational change. An even more instructive 2004 study from the consulting, technology and outsourcing services company Capgemini found that senior managers in large British companies admitted that one in four of their decisions was wrong, with the rate in the financial services sector being nearly one in three. With an average 20 ‘business critical’ decisions taken by each manager every year, this equates to a wrong determination every eight weeks by each of every one of an average 33 decision-makers in every organization.

    Whilst these ‘snapshots’ should not detract from the fact that the majority of decisions that managers make are right, the fact remains that many decision makers are not doing productivity and competitiveness any favours. Incongruously, the same general performance among their vocational subordinates would likely not be tolerated.

    Information overload notwithstanding, my own work in this area suggests that there is a huge gap in the way managers make and are taught to make their decisions. No thanks to the very flexible labor market, their determinations are typically grounded in the experiences of prior employers, which are not always relevant, remembered accurately, truthful, or even transferrable. On top of this, the data, information and knowledge usually provided by their new employers excludes the one crucial component on which most good decision making depends – tacit or cognitive knowledge, which Professor Payne refers to in terms of fluency.

    Tacit knowledge is the event-specific, organization-specific, person-specific and time-specific ‘how’ of know-how that defines a new employer’s very existence. Much of it is implicit, ambiguous and esoteric, and acquired largely by experience that is functional – and allowed to walk out of the front door never to be utilised by its patron. It is through tacit knowledge that most erudition takes place and where better decision making can emerge. In the pursuit of better decision making, it is both this institution-specific content and an area of instruction called experiential learning that organizations and business schools neglect.

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  7. Peter Holcroft says:

    A really BIG issue I come across as a consultant, is that “Managers” will not (?ego?) or feel they cannot (? peer or Boss-Pressure?) “ask for help” in decision-making processes, including prioritising, measuring impact.

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