3 excellent books about how people make decisions

On the recommendation of a Twitter friend I recently read (or, rather, listened to the audio editions of) three excellent books about how people make decisions:

The Art of Choosing by Sheena Iyengar
Predictably Irrational by Dan Ariely
How We Decide by Jonah Lehrer

All three contain countless nuggets of recent scientific insight into behavioral economics, or why people and markets behave as we do, as explained by three very cogent thinkers. All three focused on defining the abilities, strengths and weaknesses of different brain areas; how human impulses mesh and are sorted and acted on; predictable biases of both “rational” and “emotional” sorts; and, what we can do to avoid—and manipulate—biases and errors. Interestingly, all three authors acknowledged the increasing difficulty academics are having in drawing sharp lines between “rational” and “emotional” behavior when confronted with contemporary knowledge about brain function, but all three attempted to draw distinctions between “rational” and “emotional” decisions nonetheless—with varying degrees of success.

Playing poker
Playing poker well involves combining “rational” and “emotional” decisions and knowing when to do which.

The book I enjoyed the most was Jonah Lehrer’s, which I could oversimplify by describing as “neuroscience discovers B.F. Skinner” because of his focus on learned behavior. But perhaps that’s because Lehrer’s approach best fit my personal preconceptions about behavior—and the fact that B.F. Skinner was still working at the psych department where I received my undergraduate degree in psychology way back when I was in school.

Ariely’s book is premised on the idea that traditional economic theory is Continue reading “3 excellent books about how people make decisions”

3 reasons to try social media add-ons for Outlook or Gmail

Contracts expert Kenneth Adams via Rapportive
Contracts expert Kenneth Adams via Rapportive

Social email plugins like Xobni, Rapportive (now owned by LinkedIn), Gist (now owned by RIM), and Outlook Social Connector (supported by Microsoft) can add an interesting and sometimes productive upgrade to your email experience.

Here’s the basic idea. When you’re reading or writing an email, if you have a social media connection to the senders or recipients, or if they have public social media profiles, you see their recent social media activity displayed to the right side of the email you’re looking at.

So instead of having to visit a bunch of different social media sites and look up a contact on each of them, just open an email and their social media information is all right there in one place.

A number of business purposes are served by using a social email plugin.

1. Staying in touch

Social media updates can help you understand what a contact has been up to, or is doing right now, just as you are sending/receiving email from them. This is useful in much the same way as using a shared calendar at work, which allows you to know when someone is going to be busy or on vacation while you’re trying to schedule a meeting with them. But the social media updates offered by these plugins provide more Continue reading “3 reasons to try social media add-ons for Outlook or Gmail”

3 ways we fool ourselves with social media metrics

This is part three of a series of posts about using social media metrics.

This is not the porn industry here, kids, and this is not about buying a house… SIZE DOESN’T MATTER!

– Steve Olenski, Too Many Social Media Marketers Still Believe Size Matters

An optical illusion: our brains add information that isn't there.
Would you believe the squares labeled “A” and “B” are identical shades of gray? Click the image for proof. (Developed by Edward H. Adelson of MIT.)

Don’t worry, it’s normal (statistically speaking) for people to fool themselves with statistics. So normal, in fact, that the fields of psychology and statistics can tell you exactly where things go wrong. Read on to find out how you and your organization can avoid being fooled by the Fundamental Attribution Error, Sampling Biases, and Information Cascade when you are evaluating social media metrics.

But first, what are we being fooled to believe? People would like to believe that more social media followers are better, more comments are better, more shares are better, etc. This might be, but isn’t necessarily, true. In fact the opposite may be true. Sometimes less is more. Consider the following hypotheticals, based loosely on real world examples:

Ignore social media metrics: what to focus on instead

This is the second in a series of posts about why I advise certain clients to adopt a “dynamic brochure” social media strategy, focusing on publishing, active listening, and measuring “pulse” without attempting to meet numerical goals for metrics such as “likes”, comments, shares, page views, Klout score, etc.

You can read part one here. In this part I discuss the benefits of a dynamic brochure strategy. In part three I’ll discuss false assumptions about the relationship between social media activity volume and ROI. And in a future post I’ll circle back to how social media ROI can be measured effectively, and some of the frameworks that can be used to measure it.

If you can’t connect social media investment to revenue generation, aka calculate ROI for social media, how does a social media  program help you? Let me count the ways. But first, a new metaphor. In part one of this series you were a rock star. This time you are a rock star’s stalker. You want to get to know a rock star online — really, really get to know a rock star online — what are you going to do? You’ll take a spin through all of that rock star’s (brand’s) web properties, gathering information, and saving or sharing the tasty bits with like-minded friends.

In real life (which for most of us means not being rock stars or having stalkers), who’s going to take this information gathering approach?

  • Prospective customers evaluating your offerings, either before or after hearing about you from other sources.
  • Current customers, and other brand fans, who want to share information about you (referrals).
  • Customers and brand fans just checking in to keep up with the brand.
  • Journalists and bloggers considering the brand for a story.
  • Conference organizers considering your people for speaking positions.
  • Potential employees, either before or after contact with your recruiters.
  • Current employees staying connected to the company, or sharing information with potential customers or Continue reading “Ignore social media metrics: what to focus on instead”

Social media and retirees

The owner of an online-only business recently asked me whether I thought social media should be used to reach out to retired people. Because he had received a number of telephone calls from older customers having trouble with his online application, his fear was that very few retired people were computer literate enough to complete a transaction on his web site or to use social media.

A recent Nielsen survey revealed that 17.5 million people aged 65 years and older now use the internet. Of that group, approximately half (8.75 million) use the internet to send email, read news, do online banking, and use social networks. (Citation: http://mashable.com/2009/12/10/seniors-online-habits/ ). As such, one would have to assume that at least 9 million retirees are computer literate enough to be high value customers for any online business. They can be acquired through the same combination of media outreach as other consumers online, and they can be serviced at the low marginal cost of an online transaction.

I also asked for input from a friend who held a  strategic role during a formative period at Amazon.com (for a number of years Amazon didn’t even publish a telephone number for customer service inquiries, as you may recall). He harumphed, then opined that besides being more than capable of completing online transactions, retired people can be quite viral because they are likely to use their leisure time to share product and services information with their friends.

Certainly, some number of people from any given demographic – including retirees – will have trouble with every web site. But so long as you focus on making your site user friendly, don’t be afraid of reaching out to retired people through social media. They may just find you, and tell their friends.

Generating B2B sales leads using social media

The 2009 Forrester Research report about what influences IT buyers in a B2B context presented the following list of the most influential sources of information for technology buyers. As it happens, the positive impact of all of the sources of influence on Forrester’s list can be enhanced through social media efforts. Starting from the top, in order of influence, the sources are:

  1. Peers and colleagues
  2. Vendor, industry, trade web sites
  3. Your direct vendor salesperson
  4. Technology or business magazines
  5. Consultants, VARs, or SIs
  6. Industry trade shows or conferences (in person)
  7. Industry analyst firms
  8. Forums, online communities, social networks
  9. E-mail or electronic newsletters
  10. Web events or virtual trade shows
  11. Interactive media: podcasts, video, online demos
  12. Blogs

(surveying 1217 technology decision makers at companies with more than 100 employees).

B2B sales lead generation - fitting the pieces togetherAlso according to Forrester, 91% of B2B technology buyer decision makers use social media to gather information.

It’s critical to recognize that a successful social media lead generation strategy doesn’t require reaching out to every customer on a one-to-one basis. Instead, the most powerful online strategy is to use existing communication channels by reaching out to the influencers who already have a one-to-one relationship with customers. Here’s how this strategy maps to Forresters list:

Peers and colleagues” – People will go out of their way to share good news with their friends. It’s human nature to tip off friends about big finds. The right tools can make it extremely easy for people to share information about products and services via email, Twitter, and other channels. State of the art viral messaging hooks can be built into the sellers web site, including a subscrition email messaging system and connections to other transmission mechanisms on the web (like Twitter). These are all trackable, incidentally, to provide feedback about the spread of a seller’s messages via various channels.

Technology or business magazines,” “Consultants, VARs, or SIs“, and “Industry analyst firms” – I lump all of these together under the category public relations (PR). The experts and commentators in almost every B2B community are constantly trading information. More and more of this discussion happens using social media. Social media like Twitter and blogs are now a key conduit for building relationships with journalists, bloggers, analysts, consultants, and other experts, who in turn influence IT decision makers. (See my post earlier this week for more about this.)

Your direct vendor salesperson” – Social media can reveal which specific people working for potential buyers are looking for a seller’s solution. For instance, LinkedIn provides a virtual directory of who does what inside many companies. Twitter and blogs can provide a blow-by-blow account of the projects specific people are working on.

Web site“, “E-mail/newsletters“, “Web events“, “Interactive media“, and “Blogs” – Initial contacts are stickier, stronger, and last longer when people can effortlessly keep in touch with a seller using the form of online communication – email, blog, Twitter, LinkedIn, webinar, etc. – that they are most at home with. But a surprising number of B2B sellers aren’t using these off-the-shelf subscription and interaction options to convert contacts into leads.

Forums, online communities, social networks” – These three are pure social media. But a company must actively and consistently participate in them to have an impact.

Last but not least, within every communication channel mentioned above it’s important to listen and learn what people are saying about your company, its competitors, and its markets. Companies that don’t make an effort to become aware of what influencers and customers are saying are likely to miss both sales opportunities and criticism. It takes an effort, but a wide variety of tools are available to automate the process.

A 1 page (2 sided) consensus “cheat sheet”

My previous post describes the benefits and limitations of the five-degree consensus process that I recommend to clients who use consensus decision making as part of their repertoire of business skills.

In this entry I offer you a downloadable chart plus a condensed, one-page explanation of how to use a consensus scale which you may want to print out for your own use or e-mail to friends and co-workers for their use. (If you’re really hard core, print the chart on special white-board paper for laser printers. Then you can mark and erase right on it as much as you want.)

DOWNLOAD IT HERE: > Using a five-degree consensus scale to reach consensus: the cheat sheet (in PDF Acrobat format)

To download it to your computer, right-click with your mouse (or on a Mac, option-click).

When, again, is a consensus process particularly appropriate? See my post from December 8, 2005 for a more detailed answer to this question. In general, a consensus process may be valuable when:

  • you want a proposal examined carefully. A consensus process pushes people proposing a course of action to clarify their reasoning and pushes others to wrap their minds around the proposal, encouraging everyone to understand it, ask questions, and offer input.
  • you fear weak follow-through, and thus you want to secure support up front or quit before setting a decision up for failure. A consensus process pushes everyone in a group to assume responsibility for a decision, including follow-through down the road.
  • you aren’t in a desperate hurry. Although a rapid decision may be reached by consensus, for speed alone you’re frequently better off assigning a qualified solo decision maker.

A simple consensus building process

A simple consensus process can reveal whether the members of a group agree about a proposed course of action while promoting discussion that can lead to agreement.

Polling a group using a five degree consensus scale “takes the temperature” of a group, instantly demonstrating when a proposal requires no further consideration either because it already has universal support or because opposition is overwhelming. When consensus for or against a proposal does not already exist, the scale identifies whose concerns need to be addressed and their degree of difference from others in the group, so that an effort can be made to close the gap or abandon the attempt to reach consensus.

Productive discussion is encouraged because it’s easy and acceptable for group members to express uncertainties, differences of opinion, and alternative approaches without appearing hostile, disruptive, or uncooperative towards the group or the group’s leader. Consensus is not a foregone conclusion using the scale, but the give-and-take atmosphere it facilitates helps with obtaining buy-in, discovering new options and changes in the plan, and enabling movement towards or away from support for a proposal.

Many consensus scales are in use utilizing hand gestures, cards, colors, or numerical tallies. The simplest might be the three-degrees scale such as “hot, neutral, cold” or “yes, maybe, no,” or “go, caution, stop,” but I find that a slightly wider range is useful in most cases. The following is a five-point scale I have adapted from a system sometimes called “shades of consensus” or “levels of consensus.”

After a plan of action has been proposed, each participant in the decision chooses a number from one to five to signal their degree of support. These numbers signal roughly the following:

      1: Yes. Let’s do it.
      2: OK. It’s good enough.
      3: Maybe. I have questions.
      4: Wait. Can we change it?
      5: No. Let’s do something else.

After everyone has weighed-in, all ones and twos show consensus support for a plan, although time might be well spent clarifying what, if anything, could be changed to bring twos up to ones. All fours and fives shows consensus opposition to a plan, although discussion may still be useful to generate a shared sense of why a proposal was rejected and to spur thinking about alternatives. Threes suggest more explanation is needed.

Some number of ones or twos alongside fours or fives demonstrates a lack of clear consensus and need for further discussion or in-depth exploration of options, if consensus remains the group’s goal. Polling a group with a consensus scale is an iterative process, which is to say, multiple polls can be taken to discover movement in consensus rankings, or lack thereof, after discussion.

It’s worth emphasizing that the whole point of this is to walk through the process, not to achieve a pre-determined outcome. What is more, deadlock is an entirely acceptable result using this technique. Using a consensus scale does not guarantee that a particular proposal will ultimately receive either consensus support or opposition. A strong contrary position taken by even one participant is enough to deny “consensus decision” status – but of course, there are always alternative proposals, and alternative ways to arrive at decisions besides consensus.

When a group is deadlocked, the value of a consensus process is that it reveals the existence of the deadlock and, hopefully, the reasons for it. Typically this leads to a new proposals which address the concerns on both sides of the consensus chart in a way which unifies everyone.

If a consensus can’t be reached, but a decision must be made regardless, it may become necessary to abandon the effort to reach consensus and to use another decision-making style instead. For example, if a board must arrive at a certain decision within a certain time frame, a failure to reach consensus may mean that a simple majority vote will be required instead. Or in a business group, it may become necessary for the senior person in the hierarchy to make an executive decision, delegate, or otherwise choose a different course for decision making. Either way, a group should begin a consensus decision-making process knowing the consequences it will face for failing to come to a decision, whether that means accepting responsibility for no decision being delivered or understanding that the decision will pass out of their hands and on to another process or person.

Regardless of the ultimate result, a consensus scale makes it a no-brainer for a diverse group of people to express and develop individual levels of understanding and enthusiasm, while making it easy for leaders to gauge the support a proposal will receive if it is adopted.

Balancing cost and quality in decision-making


AUDIO (PODCAST) EDITION: click here to listen to the audio edition of this topic (just over 4 minutes listening time–it’s a 2 MB download, which may take a while to load). Right-click (or on a Mac, option-click) to download it to your computer.


There is an apparent conflict between making decisions efficiently, which is to say, using a low-cost process for decision making, and making efficient decisions, the decisions that are most likely to lead to good quality results.

Decision process is important in several ways. For instance, delegation is an efficient decision-making process when it reduces the number of people involved and thus the total number of hours put into making a decision. This is true whether or not the person given decision-making authority has the most expertise in the area of the decision. Delegation also has potential intrinsic benefits. It can build decision makers’ expertise and help them develop in their organizational roles. In large part one learns to be a better leader by leading, and a salesperson by selling, and so on. Thus, even if the decision arrived at by a delegatee could have been improved upon by someone with more expertise, an organization benefits by using delegation as a process because of the time savings and the delegatee’s expertise building and role development.

But there can be costs associated with quick decisions, and decisions involving fewer people, as compared to slower decisions and decisions involving more people.

Decision quality, as well as the decision makers themselves, may benefit immensely when goals, assumptions, and alternatives are fully discussed. Even the most experienced, most qualified, most respected, and most intuitively gifted decision makers will face decisions that are outside of their expertise, or for which they lack adequate information, or which fall into their personal blind spots. Properly framed challenges help decision makers “check their math” and discover answers that may have been hidden.

Or as Richard Doherty was quoted by USA Today as saying about the turnaround at Apple when Steve Jobs resumed its leadership: “[H]e asked these amazing questions, and the company started to transform.”

Answering questions also helps decision makers articulate their decisions to the degree necessary to sketch a vision that others in the organization can get behind and follow through on. As well, those who ask questions develop their domain expertise, and refine their art as decision makers, by running through the mental workout of formulating and presenting questions.

But decisions which include the input and approval of larger numbers of people can be inefficient from a process perspective. Learning curves, egos, politics, or simply the sheer volume of people who want to be heard can make group processes extremely time consuming.

Your best practice will be to remain aware of the potential tradeoffs between efficient decisions and efficient decision-making. Make strategic choices somewhere between the two extremes, accept the potential downsides of your choices, and be prepared to deal with pitfalls should they appear.

Less talk and more action

Too much talk, not enough action: how to switch it around


AUDIO (PODCAST) EDITION: click here to listen to the audio edition of this topic (about 9 minutes listening time–it’s a 4 MB download, which will take a while to load). Right-click (or on a Mac, option-click) to download it to your computer.


In certain organizations people are always going to meetings where practically nothing gets decided. All talk and no action–what’s going on?

Action isn’t always better than talk. Sometimes the best solution to a problem is to do nothing. But when action is needed, or when talk is getting in the way, it’s time to scan for obstacles like these in your organizational culture.

1. Fear of accountability. Accountability means decision makers experience the consequences of their decisions. Placing responsibility for decisions in the hands of people who are properly motivated by the consequences will lead to better decisions over the long haul. But in the real world things often don’t turn out as planned. When an organizational culture resorts to blame and personal attacks, people won’t want responsibility for decisions. The personal risk is too high. Even when action or innovation is desperately needed, decisions are avoided or deferred. The status quo, in which nobody has to stick their neck out, offers a relatively safe harbor for individuals fearing punishment and retaliation, regardless of the long-term negative impact on the organization.

Where fear of accountability may be a problem, key questions to ask are: How do we cope with others’ mistakes? What response to mistakes would be the best for our organization and our people over the long run?

The mistakes made by the team responsible for a bank’s web site and the research and development team for a toy company, for example, might seem rather different. But everyone who has had more than a cursory level of business decision-making responsibility has made mistakes. And experimentation, which means accepting the risk that results won’t always turn out the way we want them to, is a powerful tool. So the more important question is not whether someone has made mistakes, but how they handle their mistakes. (“Fail quickly and move on” is one successful CEO’s advice.)

2. Defaulting to consensus. Consensus means getting input from everyone in a group and requiring unanimous consent before moving forward. Consensus can be a powerful mechanism for motivating every member of a team and for uncovering and resolving hidden issues that team members might otherwise let lie. However, overuse of consensus can be cumbersome, impractical, and enervating to teams bogged down by too many details.

Where overuse of consensus may be a problem, key questions to ask are: What is important about using consensus for a particular decision? What would be the benefits of taking a particular decision out of a consensus process?

To find a healthy balance, rather than relying on one form of decision making for every issue, try experimenting with different decision-making mechanisms periodically, such as consensus on one end and veto-free delegation to one person’s judgment on the other.

3. Boredom. Some people attend meetings simply because they don’t have enough to do, or don’t like their assigned work. While ambitious people often take on extra work in order to get ahead, projects can get bogged down when too many people are involved, and everyone’s work suffers if individuals or teams split their focus too many ways.

When boredom may be a problem, key questions to ask are: Whose contributions are necessary at this stage for this project? What is important about their participation? What are good ways to deal with someone’s boredom?

If someone is bored enough with their present job, it’s time for them to change. Neither they nor the organization benefit if they aren’t focused on the work already on their plate.

4. A meeting culture. In some organizations the best way for people to get noticed and get ahead is by participating in meetings. In a certain highly competitive corporate culture I know, people believe they receive credit for what they do only through the political act of presenting their work in person at a meeting, lest their contributions be ignored or even credited to someone else.

When a meeting culture may be a problem, key questions to ask are: How are careers and meetings connected? What’s important about this linkage? How could this connection be improved?

Competitiveness in an organization’s culture can lead to great strides for both individuals and teams. But competition can work against an organization’s long-term best interests if it encourages people to hold each other back while pursuing personal quests for recognition.

5. Inconsistent leadership support. An organization’s leaders may pride themselves on their motivational skills even while their on-again off-again support for innovators sabotages personal initiative across the organization.

If partially completed projects are an issue, ask these questions: How have our leaders actually rewarded action? How consistent is support for innovation according to people on the receiving end?

Consistent support gives innovators the confidence to follow through and the incentive to try again, while giving others the courage to take the plunge.

I want to give special thanks to Don Lange, owner of Straightface HQ, a 3D visual design shop in Seattle, for the spirited conversation that lead to this entry. Don’s background includes working as a lighting specialist for Hollywood film productions on which, he tells me, teams of highly autonomous production experts meet just often enough with just the right people to stay coordinated while working super-efficiently in parallel. So if you are looking for people who understand high levels of delegation, pay attention if you see “Hollywood” on a resume.