SMEs Must Choose Change
Dr. Sheena S. Iyengar, a scholar at Columbia University, has conducted significant research on change management, choice, and decision theory. One experiment she describes is based on data collected at a supermarket: counting how many customers who sampled many different types of jam ended up buying the jam. The final purchase was verified using the discount coupons at the cash register.
Interestingly, she found that the higher the number of jam options the customers had tasted, the less likely they were to act on that purchase. She called this phenomenon “the paradox of choice.” Too many choices, too many options, hence analysis paralysis and unintended consequences (quite the opposite of what the store was trying to achieve by providing more shelving space to the marmalade section). She identified that the bigger the number of options and combinations, the higher the costs of acquiring and sorting information and the more complex the decision. Computer scientists try to simplify this complexity by
using an algorithm called “merge sort,” which brings similar, not the same, groups together and speeds up problem-solving. Gestalt theory predicates similar clustering and simplification approaches. Reductionism, which strives to simplify complex problems into small manageable pieces, does the same.
Why does something so positive – such as having access to a larger number of delicious and tasty breakfast options – turn out to be a paradox leading to fewer purchases? David Rock and Jeffrey Schwartz use neuroscience to explain it simply: change is painful.
Decisions leading to change are processed in our working memory and activate the energy-intensive part of the brain, depleting such energy. Routine and familiar activities are stored in the basal ganglia and form habits that require less energy to activate since they have already been stored in our brains thanks to training and repetition. David Rock and Jeffrey Schwartz explain, “When you see a new product on a supermarket shelf and rationally compare its benefits to a product you already use, your working memory takes in the new information and matches it against the old. This kind of memory activates the prefrontal cortex, an
energy-intensive part of the brain.”
This lengthy introduction enables me to discuss some concepts: paradoxes, change, and the difficulty of change. Change is indeed painful. Try to read any management theory book or journal article on the subject, and you will find a recipe for to-do lists that
are meant to help people and organizations adapt to changes. But change is also necessary. We live it constantly around us: biologically, we are under continuous pressures and stresses as our bodies (and mind) change and adapt to the passing of time. Nature changes continuously, albeit in times that span millennia, while human nature, and even personalities, change several times throughout an individual’s lifetime. And with that change comes something inevitable: the difficulty of adapting or embracing it. The fear of the unknown kicks in, easily explained by its opposite: the comforting certainty of the known. We know how it works now; the last time this was done, it failed; why should it work now?
Embracing agility is essential for SMEs business owners who need to create a dynamic culture in their organizations in order to thrive. Small business leaders should refrain from the status quo and embrace change to adapt to changing circumstances. During the pandemic, many small businesses, especially in the direct services industry, had to rethink their business operations to survive. In New York City, restaurants started delivering wine. They opened outside spaces on the streets, completely transforming the eating experience from an inside to an outside affair that seems to be here to stay post-COVID, even with a modified look.
The traditional tenets of how we conduct business have changed, moving people outside of their offices into their home offices, thus opening new opportunities to connect to local businesses and communities in radically distributed work environments. Those small businesses that can ride this wave of local and community innovation and adapt
swiftly will have new opportunities to reach new clients where they are. Choosing to lead this change will open new horizons. It is time to choose change, whether taxing, painful or uncomfortable. It is time to decide to change because of the unknown opportunities that it brings.
1 Iyengar, Sheena S., and Mark R. Lepper. “When choice is demotivating: Can one desire too much of a good thing?.” Journal of personality and social psychology 79.6 (2000): 995.
2 Rock, David, and Jeffrey Schwartz. “Breakthroughs in brain research explain how to make organizational transformation succeed.” Neuroleadership Journal 1 (2008): 2-10.
3 Rock, D., and J. Schwartz. “The Neuroscience of leadership: breakthroughs in brain research how to make organizational transformation succeed. Strategy and Business, 43.
Retrieved from www.strategy-business. com/article/06207 (2006).
4 Diaz, Alicia, and Kate Krader. “Inside the Fight Over the Future of New York City’s Outdoor Dining.” Bloomberg.Com, 23 Mar. 2022. www.bloomberg.com, https://www.bloomberg.
Article by: Katia Passerini, Ph.D. Provost and Executive Vice President. Seton Hall University