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Irrationality in decision-making – the impact on process design

This morning during my commute, I listened to a TED podcast from Dan Ariely entitled “Are we in control of our own decisions?” The abstract for the podcast was:

Behavioral economist Dan Ariely, the author of Predictably Irrational, uses classic visual illusions and his own counterintuitive (and sometimes shocking) research findings to show how we’re not as rational as we think when we make decisions.

I found the talk quite interesting in that it discussed how our assumptions concerning rationality in decision-making aren’t always true. Although individuals make specific decisions, others are responsible for creating the opportunity/context to make the decisions. For example, every morning you decide what to eat for breakfast. Others (cereal makers, producers of electrical appliances – toasters, etc), however, influence – or try to influence- how you make this decision.  We make decisions every second – these decisions do not exist in a vacuum but are presented to us in a context. This context is usually under the control of others who have their own agenda which may or may not mesh with that of individuals making the decisions. 

In a word, decisions aren’t value-neutral but are the product of others who try to manipulate us to make certain choices when forced to make these decisions.

Ariely describes in humorous detail how easy is it to influence decision-making behavior by influencing the choices that are offered to these decision-makers.  The desirability of certain items are influenced by the inclusion of similar items with small faults – the frequency of decision-makers choosing an all-inclusive trip to Rome can be influenced by the inclusion of a another trip to Rome where everything is included with the exception of coffee which must be purchased separately.

As I listened to the podcast, I started to reflect on this perspective and how it impacts process design. Some might be thinking – a big leap and one that might be stretching things a little bit – but I came to the conclusion that the process design choices that BPXs – either consciously or unconsciously – make have a direct influence – either in a positive or negative fashion – on how people make decisions.  For example, the decision regarding an alternatives block – what choices are presented, how they are described, etc – probably influence the frequency of what choices are made.  Of course, the process design doesn’t entirely determine what choice is selected. The major influence comes from the business context in which a decision is made. 

Irregardless of the level of influence, the direct business impact on decision-making of poor process design should be obvious.  Based on this realization should the goal of the BPX be to act as an objective medium in whom business requirements are poured and a process design is the result? I’m not sure. Just as poor process design can detrimentally impact business decision-makers,   excellent process design can help decision-makers make better decisions.  Thus, BPXs have much greater responsibility in influencing overall business health and the decisions that individuals in the organization make than they might acknowledge or understand.  

Note: The importance of creating processes that are “clear and intelligible to business people” is also present in Bruce Silver’s article on “The Art of Process Modeling”.

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  • Thanks for passing on the Podcast!

    Do you employ any decision frameworks in your decision making?

    Do you utilize any tools to help you make a good decision?

  • It is a fascinating subject. Thanks for blogging about this, Dick.

    If you pick up a menu and find something to eat, where do you think the pricey/profitable stuff is? usually on the top right. They will “hide” the less profitable eatables elsewhere. Such principles can be used to manipulate decision making. 

    However, it is only a matter of time before you figure the options that you did not choose from. People don’t book a trip to Rome daily, so you have the ability to manipulate them somehow. But what about a travel agent who does this daily for a living? She will probably catch on to it very quickly.

    • I like your comment.

      It implies that maybe we should question the idea that process design is value-neutral. Is there something like the more expensive stuff in the top right corner of the menu in a process design? Do we as BPXs have hidden agenda to influence how people make decisions?