Episode 58 – Choice Architecture

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Choices are a part of everyday life. So is defaulting to what is comfortable or easy.

Are you aware of all of the options that are put before you on a daily basis? Those options have often been strategically crafted in a way to lead you down a certain decision-making path.

That’s ok. Or, is it?

Do you trust the curator that narrows down the choices into something you can digest and ultimately take action from?

And, are you a trusted source to provide choices to those you influence and lead?

It’s something to at least be aware of and then …decide what to do with this information.

Episode 58 Show Notes

Some of the resources that talk about choice architecture, nudge, behavioral economics. I do not endorse any of these books. But, I want to make you aware of them because the ideas in them can be used as a point of understanding what is taking place all around us – for our good and to our detriment depending upon our perspectives.

Episode 58 – Transcript

This is Rebecca Clark Episode 58 Choice Architecture This podcast is for anyone that knows they haven’t yet found and offered up their best work but are compelled to seek it out and do it. Are you ready to move your desk, Theo. In the last few episodes, I’ve mentioned Choice architecture kind of mixed in with other topics. And it’s something I’ve paid attention to the last few years, as I learned about sales and marketing and influence. And it’s really important to me, especially as I learned about how important the ability to make decisions quickly and smartly is toward becoming your best self. But I wanted to start by sharing a little story that happened a couple of years ago with my parents. They were transitioning from flip phones to smartphones, and they called me a few times asking me questions about what the right phone would be to get what the right phone plan would be and that sort of thing. And they’re kind of hesitant because they knew their phone bill would be higher. And there was just a whole lot of unknowns, which I think all of us went through when we went from a flip phone to a smartphone. And so I had these conversations with them. And then one day they called and said they were actually going to go purchase a smartphone. As we’re talking, I realized a few things. I realize that I had their best interest in mind, but I also had to have my best interest in mind while doing so, because I was the person that was probably going to be receiving phone calls with questions, right? And so, as I figured out the best way to help them, I decided to tell them that the best possible phone they could choose was an iPhone seven. Now, why did I choose three iPhone seven? Well, I used an iPhone seven, and in order for me to best understand what they were going through and to be able to help when they called me, I figured maybe we should have the same phone. That could be all these other phones that would meet their needs just fine. But if I’m the person they’re going to call for help. I need to understand what they’re looking at, what they’re experiencing, and they decided to get an iPhone seven now. I don’t remember if they actually still have iPhone sevens or if they have something else at this point. But I do know that that choice served me well. And it served them well because when they called ask questions, I knew the interface they were talking about. I knew different APS. I knew some of the decisions that could make where if they had any other brand or version, it might be a little different. Are more difficult. Of course, then maybe that be another family member that had that particular making model and could assist with that. But in that situation, I made a choice to take everything I knew at that point about phones and distill it down to what I thought would help my parents. And it did. It worked. They love smartphones. It’s enabled far more communications than the flip phone, and it has brought us closer as a family as we’re able to text, share pictures, share videos and discuss certain things together through these devices. So they’re wonderful things. But of course, with all the wonderful there’s always opposite. This is how the world was made right, like everything has its opposite and part of that is to help us understand what’s the value of something is right. If we don’t know how it feels to touch a hot stove, we don’t learn that there’s pain involved. So we learn about joy and pain, sorrow, happiness and all of these things, and that boils down to everyday life situations. When I decided that I knew best for my parents and myself, I was engaging in a choice architecture type of activity. Now, what is choice architecture? Officially, according to Wikipedia, at least on June 15th Choice architecture is the design of different ways in which choices can pre presented to consumers and the impact of that presentation on consumer decision making. For example, each of the following the number of choices presented, the manner in which attributes are described and the presence of a default can influence consumer choice. I have loved learning about choice architecture over the years, and it all started when I was researching a name to call a website I had where I was going to highlight different entrepreneurs and the work they did, while also providing insights or little nuggets to help them move forward and do their best work, and it end up being called Nudge Village. And of course, when I use that phrase, I started to look up and find a little bit more about the definition of nudge, and that led me to read the book Nudge by Richard Taylor and Case Sunstein. And then I started to read other books because that got into behavioral economics and choice architecture because it talked about the power of influencing people to make decisions. But as I read it, I realized, Wait a second. This could be used for good and for not so good when you are deciding that you are the person that gets to decide what choices people make right, you’re looking at everything out there, all of the research, everything going on in deciding. OK, people should care about these three or four things I started to question like, Well, that’s all fine, except for the fact that how do you trust the source that is making this decision for you? And this is happening all around us, right? This is what we see in marketing. This is what we see on the news and through all forms of media were being influenced. We’re being told certain things were being told what the right opinion is the wrong opinion were being told what the best foods are, what the best benefit choices are, what the best for a one casar financial health, wealth and relationships and all these areas of our lives where people are going through a process, a very fine tuned process, a very thoughtful process, a very biased process of deciding what they should present to you as options and how to present them, right or wrong and how many options to present to you. And so there’s this whole fine art of this choice architecture going on, and I often referenced this, and I figured I’d talk about it right now. But it really became popular in the year 2000 when some psychologists Sheena I in Gar and Mark Lepper published a study where they had this upscale food market where they set up a table. I guess one day, and they had 24 choices of this really great jam like gourmet jam, and they noticed it generated a lot of interest. A lot of people came by to taste tested. They got a coupon to make it cheaper to buy. And of course, there’s all these different flavors, and it’s very exciting. And yet they noticed that even though it generated a lot of interest, what actually generated the most cash was on another day when they had a table that I had only six types of jams on it. So not a sexy not as many options, little more boring. But at the same time people bought more and they’ve replicated these kinds of studies. And this is happening all over in the food world right where they try out all these different things. And then they narrow in on certain a number of options, even though a few people might like options that are no longer offered. They’re going for what’s the biggest bang for the buck? And this is very insightful. And if you read more about choice architecture, you realize it’s all about you know, the bias is involved in making the selection for people. There’s all this positioning that matters, how many choices air offered when they’re offered, how they’re offered. All of these things and millions of dollars are spent on this all the time toward influencing our behaviors and choices in every aspect of our lives. Now it could blow your mind, and you could spend a lot of time on it if you thought about it all day. But it’s important to take a day, maybe and say, Hey, let me pay attention to what’s being offered up to me because every time something’s offered up, if we stop and pause, we can realize Wait a second. There’s a whole lot of other choice is to think, but they did not represent that here. They only represented thes three things, and that’s my choice. This has been taught. This is a whole science. This is being used every day with our politicians, with our technology, you know, like I said, with our food, all these things. And so what do we do about it? Well, I think there’s a lot to learn from it. It’s important first, to become a trusted source and spend time figuring out who are trusted sources because it matters who is looking at all the possibilities and deciding what the very small list of options are that are gonna be offered out to everyone so really does matter what that person thinks what they value and what their intentions are, because they could decide that certain things air for the good of humans. That may or may not be good for you as a very specific individual. You know, for example, one of the other stories it’s always shared. It has to do with 401 K Companies have found that they get more involvement in for a one case if they automatically enroll employees in that I don’t know if any of you have been part of a company that’s automatically enrolled you in it. But what they’re trying to do is reduce the number of choices you have to make because the choices we make it takes a lot of prefrontal cortex energy. We have to think about it. We have to make decisions, and our default is to be a little bit on autopilot. So if you default someone into a 401 K they start contributing without realizing it. They don’t miss the money because it never got to them in the first place. And this is of course, the best option for you. Well, not so fast. Maybe some people that’s not the best option for Maybe there’s other ways that we better for them to invest. Or maybe they’ve already invested and they’re fine. Or maybe the company isn’t that great, and the 401 k is going to go belly up sometime soon. And at this point in life, there’s a lot of listeners that have gone through that with a company and there wishing that they didn’t follow the typical approach of maxing out the 401 k Others of us have experienced maxing out the 401 k for years, building this huge portfolio and then realizing we weren’t in synch with the cash flow and had to take some out of the 401 k And that’s when you really learn lessons, right foot? Oh, shoot. You don’t just get a little bit of a penalty. You get ah, hole, huge penalty, especially if you already make a good sum of money. And so there’s ramifications for this where, yes, it might be a great way to default and have people save. Yes, it might be great on lowering your taxes each year as a benefit, but there’s always the downside, and when you default people into that decision. It can look good from a corporate standpoint that you have more people enrolled into the account and you can claim Hey, we’re helping more people save for the future, but it goes back to Should we trust that decision being made by someone? Now, if you’re spending time thinking you can go Yes, I’m glad they defaulted me into the for a one k with this minimum amount taken out every month. And I’m fine with it or yes, I’m glad they did it. In fact, I’m gonna add more to it. I’m going to go beyond the little default that they created and others might say, Oh, I don’t want to do that right now. I need to go in and make the decision to turn it off. And so there’s this awareness and being awake and being willing to do the hard thing, which is to spend time making a decision when some of these defaults are put in place by people and organizations that you’re not sure whether or not to trust. And I guess the important part is to just question this once in a while, right? So you don’t just accept the defaults and understand that the choice is given to you are intended to lead you in a certain direction. And they’re intended to be super easy for you so that you don’t have to think right. So if someone who’s trying to offer up their best work to the world, what does this mean for you? Well, I think what it means is you have a great responsibility toe. Learn to grow to weigh different options so that you can become a trusted source, not just to yourself, but through those you interact with. So, for example, when you go to present options to a team, you lied that you are doing so from the right place. Sure you want to influence and you want to persuade. But are you doing that with the best of intentions so that it’s a benefit to both you and the team and the organization? If you are managing upwards or leading upwards and providing solutions to another leader or to another organization? Are you sincerely trying to work through your biases and look at big picture of what’s out there and doing your research and saying, OK, I did all that I looked at as much as I could and looked at it from the right frame of mind. And now I’m coming to you, presenting you with three or four options, and I’m presenting these as a maybe low end, medium or high end option. Or maybe you’re saying, Hey, here’s three options that I looked at here the pros and cons for each here, the downsides, the trade offs, the risks, things to think about, the maintenance cycle of this decision. And from these decisions, I would recommend Option two right based on everything I’ve looked at and presenting it in a way where they get enough information and they can ask questions and come to an agreement. You don’t have to share with them all 20 things that you had to decide from. But pay attention to make sure that when you decide from the 20 things and narrow them down to three, that you’re doing it in the best interest of all those involved. This is very powerful stuff. Millions of dollars spent every year ensuring that were influenced as employees, as consumers as creators, and so I’d recommend paying attention to this for anything in coming to you and anything from you, because at the end of the day, it really does matter who is trusted to make these decisions for us. And there’s a lot of people that cannot be trusted out there that are making decisions for us and making it look like we only have a few options and making some things very easy so that we default the pay attention. Ask yourself questions in these moments, even for a small little thing like packaging on a bag of chips. All right, I could look at them and think about it for a minute. And, of course, think about this when you offer up your work. Are you coming from the right place? Are you really looking at the options? Are you far more biased than you think you are? Do you have blind spots that you need to consider so that when you offer an option to someone you are providing the best you can in the best possible way some thoughts think about. We’ll talk about nudge and behavioral economics and choice, architecture and other episodes, but I wanted to share that today because I think it’s a very important part of being conscious of our choices, being conscious of the choices we offer to others and is yet another thing to think about as we work on becoming someone that others could trust and offering up better work. I hope you have a great day. Thanks for listening to the show today. If you enjoyed it, I’d love if you’d write a review and share the show with your friends, sign up for a weekly nudge at move your desk dot com. See you next Monday.

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