Drivers have been sitting on the clock for miles since Henry Ford told his Model T sellers that customers can have any color they want, as long as it is black. If anything, carmakers have been roaring in the opposite direction: by 2017, BMW plant managers have claimed that prospective Mini owners can choose from 15-ton combinations of shades, parts, finishes and accessories.
So my ears pricked up last week when BMW chief financial officer Nicolas Peter said the group would slash options available to customers. “Certain combinations do not make sense at all, and are never selected,” he said, highlighting how the group will reduce costs and complexity as it increases electric motor production.
In a restaurant, I tend to choose the set menu rather than go à la carte. Faced with an abundance of choice, I am an indecisive buyer, so news of simplification rejoices.
I welcome the British Poultry Board’s plan to reduce the number of tracks of turkey available this Christmas, to ensure provision. I welcome the steps taken by the National Theater, Glyndebourne Opera House and other cultural institutions to adapt new productions, in line with guidelines for more sustainable theater, by beach hunt for props and the reduction and reuse of scenery.
Several pressures combined to remind companies that less is more often: supply chain problems, post-Brexit and post-pandemic labor shortages, environmental concerns.
If they are smart, companies will have an opportunity to scale down their ranges and simplify their strategies to their own advantage – provided they can make some difficult choices themselves.
The most convincing research on the psychology of choice remains “the jam experiment”, at the heart of a 2000 paper by Sheena Iyengar and Mark Lepper. On consecutive Saturdays, they set up a tasting booth at a luxury grocery store in California, one with a range of 24 different flavors of jam, another just six. The greater the choice, the less likely customers were to buy a pot. In parallel experiments, students were invited to write a short essay, by choosing from six or 30 different topics, or to taste chocolates chosen for them, or which they chose from a wide or limited variety. “The provision of extensive choices, although initially attractive to choice makers, can. . . undermining voters’ subsequent satisfaction and motivation, ”Iyengar and Lepper wrote.
Academics have skimped on the original findings. It has become clearer that voters are overloaded by diversity under certain circumstances – such as time pressure, or when the options being compared are complex – and others are not. A 2013 study by Daniel Mochon points to the danger of oversimplification and the offering of too few options, which stifles comparison shopping that helps buyers make their decisions.
Unscathed by the risk of choice overload, supermarkets continue to offer a staggering array of options, while Amazon, which has always strived to be “the all-store”, has grown into one of the most valuable and successful companies in the world.
When I contacted Iyengar, who went on to expand her ideas on choice in a fascinating book The art of choosing, she responded via email to support the idea of a “fixed menu”. But she also advised: “Keep changing it so that it feels fresh. This is the optimal [approach] because it gives people limited choice, but does not grow old. ”
Some companies successfully question the mantra that if you can offer more, you should.
When I spoke to him last week Worldwide Peter Drucker Forum, showed Alex Osterwalder, a strategy advisor BurgerM, which builds modular hotels from prefabricated units and squarely targets itself on “mobile citizens”, who make short trips. “They have reduced their cost structure by simplifying everything, without making the customer experience feel cheap,” he said.
Choice is, in fact, the essence of corporate strategy, either to choose what to pursue or – in a step that Drucker himself recommended as a regular discipline – what to give up.
Not many small companies have the scale to consider offering 15 tons of options like BMW once did on the Mini. But increasing globalization and the improvement of technology have tempted even beginners to diversify their product range in hopes of attracting more customers.
Henry Ford knew this could be a costly mistake. On the setback to his one-color verdict, he wrote: “The salesmen insisted on enlarging the line. They listened to the 5 percent, the special customers who could say what they wanted, and forgot all about the 95 percent, who just bought without making any fuss. ”
The dual imperatives of efficiency and sustainability remind its heirs of that reality.