One day in the mid-’90s, a Stanford social psychology grad student proposed a study to the store’s manager, to explore how people choose. She set up a tasting booth that every few hours would switch between offering a large assortment of jams for sampling — 24 flavours — and a smaller selection of six. The results were surprising: though the larger display attracted more people to the booth, only 3% of customers who stopped at it bought a jar of jam. The more limited selection enticed 30% to buy.
There’s a good chance you already know this story. In the past 15 years, it’s been cited many times, its counterintuitive message — too much choice can be a bad thing — entering the contemporary pop psych/econ pantheon. But the Canadian grad student who ran it, Sheena Iyengar, has since continued her investigations into how and why we choose, becoming a business professor at Columbia University and one of the world’s foremost experts on choice. The Art of Choosing is her first book, a broad, complex and erudite investigation into something we do on a micro and macro scale countless times every day.
“Choosing is a creative process,” she writes, “one through which we construct our environment, our lives, our selves.” Medical imaging shows that the corticostriatal network is the part of the brain that’s activated when we make choices. It’s common across the animal kingdom, but humans, with our larger prefrontal cortexes, have an ability to rationally choose that supersedes all competing instincts, giving us “arguably [our] most powerful tool for controlling our environment.” Though this part of our brains doesn’t mature until our mid-20s, research shows that even at four months, we are invested in making choices.
But the role choice plays in our lives can be dramatically different depending on how we’re socialized, be it in a stridently individualist setting like North America or a more collectivist one like China, or eastern Europe before the fall of the Iron Curtain. Here, we think of having options as a birthright, and we tend to think that more of them, in any situation, can only be a good thing. (The offer of “more choice,” in everything from the soda we drink to our investment options to the potential partners we scroll through on an online dating site, has become almost an overriding cultural imperative.) Iyengar has her doubts. “The expansion of choice has become an explosion of choice,” she writes, “and while there is something beautiful and immensely satisfying about having all this variety at our fingertips, we also find ourselves beset by it.”
Regardless of where we’re from, Iyengar says, we’re hard-wired to want the power to choose, and to enjoy having a variety of options. (She calls us natural “buffet eaters.”) But we often encounter problems stemming from the tension between our desire for options and the limits of our ability to evaluate them.
In the middle of last century, Princeton professor George Miller investigated human limits for processing information, finding that we struggle to cope with more than five to nine pieces of information at any given time. Never mind some of the bigger choices in life that Iyengar examines here; even the mundane among our choices — paint colours, soda brands — can exact a psychic toll that we don’t always recognize. And too often, we’re confronted with choices that are to some degree meaningless. Iyengar recalls a study she did after the Berlin Wall came down. Eastern Europeans raised in limited, Communist government-imposed marketplaces were asked to choose a drink from a selection of seven popular brands of soda — Coke, Sprite, and the like. Their reactions were instructive: “But it doesn’t matter. They’re all just soda. That’s just one choice.”
Understand, Iyengar isn’t issuing a call to arms for communism, or trying to undermine the free market. But one of the points she makes well is that too many options — especially too many relatively meaningless options — can be an alienating thing.
That’s a lesson some companies are starting to learn. “Procter & Gamble winnowed its 26 varieties of Head & Shoulders anti-dandruff shampoo down to 15, eliminating the least popular,” Iyengar writes. Sales increased 10%. “The Golden Cat Corp. got rid of its 10 worst-selling small-bag cat litters, which led to a 12% bump in sales and also cut distribution costs in half. The end result was an 87% profit increase.”
Iyengar tells of an encounter with the head of Fidelity Research, in which he cites her jam study. “We offer our clients up to 4,500 mutual funds, so this study provides a mantra for us: NARROW IT DOWN.” And when the results of her jam study reached McKinsey, they circulated them as an internal memo, leading to their consultants’ adoption of the 3×3 Rule, wherein the firm offers its clients a choice from among three options, each of which leads to another set of three choices, and which culminates in a third set of no more than three options.
Every choice, “whether life altering or not, has the potential to leave us anxious or regretful,” she writes. And while there’s obviously no way to avoid making choices in life, Iyengar recommends we limit ourselves “in ways that positively affect the choosing process.” It’s an unhelpful thing to try to keep as many doors open as possible, she says, or to try to open as many doors as possible for others. “Valuing the condition of having options over the quality of the options can sometimes lead to decisions that don’t serve us well.”
Spark: How Old-Fashioned Values Drive a Twenty-first-Century Corporation
The bestselling case study in Harvard Business School’s history remains a 1975 assessment of Lincoln Electric, the successful Cleveland-based arc-welding equipment manufacturer. Here, the company gets book-length treatment from CBC workplace correspondent Frank Koller, who probes its company-wide culture of open-door communications; its profit-sharing system that, even in the face of 2008’s fiscal collapse, kicked out 61% bonuses to workers; and its storied policy of guaranteed continuous employment for its workers. Between the First and Second World Wars, Lincoln Electric was among the American firms that developed a “welfare capitalism” approach to managing its staff, based on the premise that “employees wanted to be respected as human beings who were engaged in a process of creating a worthwhile product.” But where other firms dropped their new, worker-friendly policies during the Great Depression, Lincoln held the line — and almost uniquely, its management system has survived for 100 years. Company CEO Dick Couch abhors the philosophy that stock dividends must grow, even at the expense of a business’s long-term health; and layoffs, in Lincoln Electric’s world, are inefficient over the long term. “This is not about altruism,” Couch says. “It’s good business.”
The Hollywood Economist : The Hidden Financial Reality Behind the Movies
Edward Jay Epstein
Despite his prickly reputation and outrageously expensive gambles, James Cameron is the biggest hero in modern-day Hollywood because of his ability to create what’s now that rarest of things: the word-of-mouth event movie. With the decline of habitual movie-going in the American marketplace (between 1948 and 2008, the percentage of Americans who went to the movies at least once a week dropped from 65% to less than 6%), studio executives spend ever more money on advertising, trying to create artificially the kind of relatively organic buzz that made Titanic and Avatar such hits. Meanwhile, studios and distributors squeeze theatre chains, which rely more on concession stand revenues than ever before (theatre owners see the addition of drink holders to armrests as “one of the most groundbreaking innovations in move-theater history”), and the back end of the business — the way money moves behind the box office receipts, through subsidies and side deals and elaborate financing schemes — is only getting more complicated. Rarely is it explored with the detail that Epstein offers here, right down to the value of Nicole Kidman’s knee.
Fascinate: Your 7 Triggers to Persuasion and Captivation
“People would be willing to pay almost a week’s salary to be the most fascinating person in any situation,” writes ad exec-turned-brand consultant Hogshead, deriving her conclusions from a study she commissioned from Kelton Research. That study, and the book she’s based on it, explore why some people, some messages, and some brands are more compelling and influential than others. Dabbling in psychology, evolutionary biology, neurology and pop culture, she breaks down exactly how you can assess and improve your (or your brand’s) “F-score.” Made up by Hogshead and her team, this metric attempts to measure the force of personality behind a person or message, and to identify which among seven triggers — trust, mystique, prestige, lust, vice, power and alarm — work best for you or for what you’re trying to communicate. (There’s a quick F-score quiz on her website if you’re curious.) What makes it more than a marketing manual is Hogshead’s central tenet that “anything, and anyone, can become fascinating.” She wants you to understand what triggers you’re already deploying in your life and at work, and to help you refine those triggers. The quest to win friends and influence people continues.