Solving the Paradox of Choice


Have you ever gone to pick up a tube of toothpaste and been staggered by the wall of possibilities before you? You just wanted simple mint toothpaste, and now you have to worry about all sorts of ailments you never imagined your teeth could get. After pondering your options for a few minutes wondering what tartar is and whether you should be more worried about that or cavities, and if fluoride really does cause dementia, you finally just select the one right in front of you. Why should such a simple task be so complicated?

Psychologists refer to this phenomenon as “The Paradox of Choice.” Although many brands act like there’s no such thing as too many options, studies show that consumers tend to feel overwhelmed by an excess of choice that makes them feel like they don’t have enough time or information to make the best decision. This may lead them to feel unsatisfied with their decisions, or to forgo making them altogether.

Some people blame the paradox on Capitalism. I don’t follow politics, but I’ve heard rumors that certain politicians think that central planning could solve this—assuming that a few people who are far removed from consumers and have no competition or incentive to make the best choices could somehow figure out what it is that people need. We’ve seen how that turns out.

The great thing about the (not-really) free market is that when there is a problem, there is also an incentive to solve it. It’s fascinating to see the creative ways that businesses are relieving choice paralysis.

Apple is my favorite example of a company that has understood this principle for a long time. Instead of taking the popular approach of constantly “improving” their products by adding more features and more variety, they chose to stick with a few products that they could make the highest quality. This is one of the main reasons that I bought a Macbook. Even though I probably could have gotten more quality (and a touch screen) for the same price, the challenge of sorting through all the options and the dissatisfaction from always wondering if I could have found a better deal was not worth it to me.

Another intriguing solution to the Paradox of Choice is the subscription box business model that has recently exploded. These services deliver boxes of things like makeup, razors, or gourmet food to monthly subscribers. When I first learned about this phenomenon, I wondered why so many people would want to entrust their choices to others. What if the subscription sends them something they don’t like? At first I wondered if this was an outgrowth of consumerism, where people feel like they always need to accumulate more and more stuff in order to be happy. But I don’t think that’s always true.

Now that I work for a company with a subscription box service of artisan-made products from around the world, I’ve had to think more deeply about what makes the business model so successful. Along with the convenience of home-delivery and the excitement of receiving a box full of surprises, I think the main value addition of subscription services is that they absolve the customer of the dilemma of making a choice and forever wondering if they could have found something better. It’s saying, “we’re experts on these products, and we’re confident that this is the best product for you.” Of course, the model only works if the company has strong credibility with its customers. If a brand can establish that level of trust, then it has the opportunity to provide exceptional value.

So we have subscription services succeeding where central planners never could. Isn’t that exciting?

How to Stop Being a Greedy Capitalist

Ever since the Occupy movement of 2011, popular media have proclaimed that “Capitalism has failed.” They point to growing poverty statistics, an increasing wage gap, and wealthy corporations exploiting their workers. Progressives generally blame these problems on a lack of regulation in the market and advocate for increased government intervention in the economy to take power away from greedy businesses and distribute wealth to those in need.

When faced with such a public outcry, libertarians and laissez-faire economists are always quick to chime in with logical rebuttals to the progressives’ claims. They explain that the current economic system lies far from the free market envisioned by Adam Smith and is better dubbed “crony capitalism” or “corporatism”—a system where corporations gain unfair advantages through access to political power. They show all the facts and figures about how increased government intervention like a higher minimum wage and progressive taxation will wreak havoc on the economy.

Yet the debate goes on and on as both sides talk past each other. They fail to move forward because they are missing a crucial factor. They are missing the hidden cause of the failure of Capitalism that is festering inside businesses of all sizes, a failure found in practices so common that we don’t even think to question them.

Think about a typical job description posted on a job board. It lists the skills and experience required for the position, and perhaps some personal characteristics desired. Hiring managers generally choose candidates based on those criteria and then place them on a “team” of other employees with nothing in common but a few qualifications, where they must refer to themselves as “we.” Once on board, the employee is expected to come to work day in and day out in return for a meager salary worth much less than the value he is creating for the company. Managers may incentivize hard work with bonuses and promotions, or they may just threaten slacking with the loss of privileges or the job altogether. Endless meetings, bureaucracy, and unquestionable orders from authority are all anyone lower down on the totem pole has to look forward to for the rest of their career.

It’s no wonder employees feel exploited.

All political questions aside, we must not dismiss the sentiments people express when they talk about exploitation. These feelings are a powerful signal of a disastrously widespread problem in the workplace. Not only does it make employees miserable, but it also reduces productivity and organizational success.

Why would anyone feel good about devoting their life to building a fortune for someone else? Young dreamers often set out on their career path in pursuit of a passion or a higher calling. For many, those aspirations get stripped away when they settle into a corporate job in order to pay the bills. Then they find themselves trapped inside a life they have little control over, where every day is spent longing for the weekend, and the weekend is spent dreading the week to come. Only after slaving away for months on end do they accrue a few measly days of vacation time.

It doesn’t have to be this way. The solution is for businesses—and all organizations, for that matter—to treat their employees like real people: with respect, trust, and empathy.

It sounds simple, yet it is shockingly rare. If you do it, you can increase productivity, reduce turnover rates, and in general make the world a better, happier place. So, what does that mean? How exactly do you make sure your employees do not feel exploited?

Start with Why

Every business should have a mission beyond just making lots of money—a fundamental belief, the reason they exist that inspires them to take action. If you don’t have one, you need to figure that out before you do anything else. Then you need to make sure everything you do and everyone you hire aligns with it.

When it comes to building a team, the first and most important characteristic of every member is that they share this belief. If everyone on the team shares a passion for what drives the company, then they will be united under that cause and will want to help each other achieve it. The common goal will connect the team more than the empty camaraderie they get because they happen to be under the same roof.

More importantly, if the leader consistently reinforces the company’s higher purpose, then the employees will feel that their career has meaning and that they are not settling for something just to pay the bills. Most people care about making the world a better place. If you help them see how their work at your business is doing that, then they will enjoy a more fulfilling career and care more about their work. Feelings matter.

Many company leaders say that their first priority is their customers. However, if a leader makes it her first priority to inspire everyone else in the company, then they will extend that passion to customer relationships and all of their work.

In his book “Start with Why,” bestselling author Simon Sinek explains how certain companies far exceed others with the same exact resources simply because they focus on their core belief before anything else. He uses Apple, Inc. as an example of a company that doesn’t define itself by what it makes, but by what it believes. “Think different.” Challenge the status quo. Sinek explores how this practice shapes the company’s brand and builds a loyal customer following, along with how it cultivates a company culture where everyone feels inspired to be making a difference in the world—not just making computers.

You can see a job as laying bricks, or you can look at it as building a city. You can see a job as mopping floors, or you can look at it as making a pleasant environment for everyone around. You can see a job as analyzing data, or you can look at it as helping people make smarter decisions to achieve their goals. If the job is worthy of being done, then a philosophical perspective on its significance can turn someone from an exploited cash cow into a part of a world-changing operation.

Trust and Freedom

Many companies keep their workers on a leash, restricting them to certain tasks as dictated by managers. No matter how passionate someone is about the company’s mission, they have no freedom or incentive to pursue that goal whenever they feel confined to specific responsibilities. Yet managers often do not trust their underlings enough to give them this freedom.

The solution is to only hire people you can trust. Don’t hire someone unless you can trust them to talk with customers, handle sensitive information, and make important decisions. Then, once they have been appropriately trained, grant them the trust they deserve. Give them the freedom to take any steps they believe will benefit the company without asking for permission.

Employees who know their mission and are free to take whatever path will get them there will be driven to creatively innovate and contribute to company growth. Remove the limits on your expectations for them and they will strive to reach their maximum potential. Develop practices that encourage innovative problem solving through both tangible and intangible rewards.

One company has taken this philosophy so far as to eliminate managers altogether—to essentially make everyone their own manager. And this is no small company. In fact, it is the largest tomato processor in the world. The Morning Star Company prides itself on its organizational structure of “self-management.” With no managerial hierarchy, each individual has a personal mission statement which guides his responsibilities. He is free to acquire resources, training, and cooperation with other employees as necessary in order to fulfill his mission. People are compensated not based on a title, but based on their contributions and their level of expertise. As a result, everyone takes great pride in their work and has a strong incentive to master new skills and ensure company growth.

This decentralized structure is closer to the way most people live their personal lives. When making decisions for ourselves, no one tells us how much money we can spend or how to spend our time. We evaluate the available information and act accordingly. We negotiate with other individuals when necessary. We choose to live like this because humans thrive with freedom. It unleashes the creative entrepreneurial spirit in all of us and lets us express who we truly are. Why would we not take the steps to create an environment where we can all be at our best, all of the time?

We often feel powerless in the face of widespread injustice when the means to promote institutional change lie out of our control. But the phenomenon of exploitation in the workplace is something we can influence. We can start treating those around us like real people, showing them empathy, respect, and trust. Whenever we have the chance, in whatever organization we find ourselves, we can encourage environments that inspire people and give them the freedom to shine. When people no longer feel that working for a corporation entails selling their soul, both businesses and people will thrive.

Perhaps Capitalism has failed. And maybe we can fix it.