Bring back the behavioral science concepts! Doug and Jess walk through six concepts that all relate to making decisions. Those concepts include: chunking, decision fatigue, staging, elimination by aspects, decision inertia, and substitution. Here are the definitions of each (From Behavioral Economics):
- Chunking: When the same information is presented in a different form that is easier to process, our ability to receive and remember it is greater.
- Decision Fatigue: Long sessions of decision making can lead to poor choices.
- Staging: When people make complex or long decisions, such as buying a car, they tend to successively explore their options. This includes what information to focus on, as well as choices between attributes and alternatives.
- Elimination by Aspects: Decision makers gradually reduce the number of alternatives in a choice set, starting with the most important one.
- Decision Inertia: The endurance of a stable state associated with inaction and the concept of status quo bias
- Substitution: The strategy of replacing a distant or abstract reward with a more immediate or tangible incentive to motivate individuals to engage in desirable behaviors or achieve long-term goals.
Audio:
Video:
Additional Resources:
- [RevOps Show] Episode 47: RevOps & Behavioral Science - 3 Key Principles that Effect Business Processes
- [RevOps Show] Episode 13: What Are Opportunity Costs & How Should They Impact Your Decision Making
Show Notes:
Filming twice in one week, Jess having a BBQ to celebrate the school year starting, and the Chinese government. I’m sure you weren’t shocked with any of those pre-show topics…not at all…
Getting into the actual episode, Jess chose behavioral science topics around decision making in the sales process and tech implementation. Doug adds that the impact of these actions is often seen in second, third, and fourth order effects. Every action is preceded by a decision, though habits are decisions repeated without actively making the decision. Understanding how people make decisions is crucial when implementing management systems and it’s important to consider how what we do impacts the big picture and how it’s used by the people we support.
Fun Fact: Decide and Homicide both have the same Latin root, meaning “to kill.” Making decisions is difficult and taxing on the body and mind. The physiological response to making a decision is similar to that of a vigorous workout or a life-threatening situation. We as humans tend to avoid making decisions and tend to employ tricks to make it seem like a decision has been made without actually committing to one thing or another.
One more thing before we get into each concept, heuristics are intuitive leaps that help us make decisions and save mental energy. They’re used to simplify complex decisions and actions. It’s important to be aware of what we think we know and constantly reassess and adjust to that knowledge. RevOps plays a crucial role in continuously evaluating and optimizing the decision-making process and is how we are going to look at each concept through this lens.
The power of behavioral science is that it applies whether you’re aware of it or not.
Chunking
Let’s start with chunking. This is a concept that is used often without realizing it. Chunking is the process of taking lots of information and grouping it together. For example: remembering phone numbers. We don’t remember all the digits. Instead we chunk them into the area code, three digits, and four digits. Chunking helps to reduce the cognitive load and make it easier for us to process an remember information so that we can focus on the main ideas or patterns within a larger set of information. Chunking can also lead to the loss of nuance and detail in information where we may replace or interpret information in a different way. When you’re trying to persuade or influence someone, chunking information can be effective in helping them take action. Conversely, when trying to deter someone or discourage a behavior, avoiding chunking can be more effective.
Decision Fatigue
Decision fatigue occurs when the mind becomes tired and less able to make effective decisions. Making decisions depletes energy and becomes harder as the day goes on because people have a limited capacity for making decisions everyday. Being aware of the timing and context of decision-making can improve your outcome. For instance, meetings and important decisions are best scheduled in the morning or after lunch when people are more alert. Likewise, presenting recommendations rather than asking for options can also help alleviate decision fatigue. So if you have a proposal or a plan you need to present - especially if you are in RevOps, you should be cognizant of your boss’s schedule and make your proposal when they haven’t made many decisions in the day or at least have taken a break to recharge.
Decision Staging
Decision staging is important for complex or long decisions. The most common mistake here is not having a defined staging. Sales conversations often lack structure and directions. Questions and answers are all over the place and recommendations are made without clear decision steps. A decision staging framework is needed to guide the decision-making process. The first step in implementing a new process from a revenue operations standpoint is to get the prospect to make the decision to change.
Change can be scary, so it’s important to address their fears and concerns. When presenting a recommendation, it’s better to focus on the decision to change rather than the specific solution. Decision staging is the process of breaking down the decision-making process into smaller stages or steps, so by staging a decision, it becomes easier for the prospect to make smaller decisions rather than one big decision. Staging reduces decision reluctance and makes it easier for the prospect to make decisions.
Elimination by Aspects
Elimination by aspects is a decision-making strategy that involves narrowing down options by considering different attributes and eliminating those that don’t meet the desired criteria. For example, in real estate, agents often use this strategy by showing multiple houses to clients and eliminating them based on specific aspects. An agent may show a house they suspect the client won’t like first to gather information on what they don’t want.
When you think about the decision-making process, it’s complex and involves multiple factors. The four elements are:
- Understanding what needs to be achieved
- What will enable success
- What will hinder success
- What can be afforded
It’s important not to overlook any of these elements.
Decision Inertia
Decision inertia is the stable state associated with inaction and the concept of status quo bias. Omission bias is the tendency to attribute negative outcomes to action rather than inaction which can lead to a fear of change and a preference for sticking with familiar options. For example, taking a different route to work and experiencing unexpected traffic illustrates the omission bias because you’d think “why out of all days would I choose to go this way.” Though if you picked your same route and ran into traffic, you’d think, “today was just a bad day of traffic.” People tend to blame themselves for the negative outcomes when they take actions, but not when they don’t.
It’s common for people to experience decision inertia where they stick with the initial choice they made even if new information suggests they should change their decision. Many people struggle to change their decision even when presented with evidence that suggests their initial choice was unlikely to be correct. Decision inertia is driven by the fear of making the wrong decision and the potential negative consequences that may result in a way that helps people come to a more informed and efficient conclusion.
Jess’s Takeaways:
- If you want people to make a decision, chunk it. If you don’t, don’t.
- Staging decisions is key. Start by asking should there even be a change? And does the change need to happen now?
- Taking all of these concepts into account helps you frame a decisions better and guides the decision maker to help them get to a conclusion.
Next Steps:
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Follow Jess, Doug & Lift on socials for updates on the show or other insights:
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Doug Davidoff: Twitter/X - @dougdavidoff | LinkedIn
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Jess Cardenas: Twitter/X - @JessDCardenas | LinkedIn
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Lift Enablement: Twitter/X - @DemandCreator | LinkedIn
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Listen to Episode 69: Tackling Tech Debt: How to Manage and Mitigate Its Effects