Too much choice

I was chatting to Tim Morris, who’s a professor at the Said Business School in Oxford and an expert on professional services, and we ended up talking about fruit. An enterprising, and presumably fiendishly healthy, Stamford professor put a bowl of fruit outside his office so that the students could help themselves for free. Faced with three different types of fruit, the students decided quickly and felt virtuous. They still decided quickly and felt virtuous when the professor upped the choice to nine types of fruit, but when he offered them 27 different types, all hell broke loose. Not only did the students take longer to choose, but they felt less happy with their choice because there were so many alternatives.

According to Malcolm Gladwell in Blink, the same thing happens in supermarkets: if we have too many of a particular product to choose from, we can’t cope.

What’s the connection with professional services and consulting in particular? One of the impacts of the recession is that more consulting firms are chasing a smaller number of projects. This means that clients who send out a request for information or proposals may find themselves deluged with potential suppliers. Assuming their reaction follows the pattern established by the Stamford students, that’s going to result in them taking longer to decide (and I think everyone in the consulting industry has noticed that that’s already the case), but also – crucially – less satisfied with their choice. The situation will leave them literally spoilt for choice.

That’s a strong argument to try and limit choice. Clients need to be more selective about which firms they invite to pitch for a given piece of work and/or make their selection criteria clearer so that potentially bidders can rule themselves out. Consulting firms need to think hard about whether they have a realistic chance of winning the work and not just send in proposals because it gives them the illusion of feeling comfortably busy.