Human decision making is a complicated phenomenon. Many studies on the topic highlight the parameters defining our mental processes, even if they can’t fully explain them. These studies often find that we can be guided towards an outcome that we know is against our best interests. And this is the case in business, too.
It’s easy to view corporate decision making as something steeped in careful consideration — a binary process led by data and best practice. However, businesses are ultimately run by humans. Commercial progress is determined by the choices that we make, either alone or as a group.
As a result, the unpredictability of the human brain can influence a range of business decisions. This is even more pronounced when processing the outcomes of technology-related decisions, which teases out every dimension of our psyche. This is because for lots of companies, especially small and mid-sized firms, new tech is still very much a leap into the unknown.
Sometimes, when faced with a difficult decision, we need a catalyst to force us to make it. The Covid-19 pandemic, for example, accelerated technology adoption in many businesses, who took the leap and embraced new digital tools to survive. While many small-to-medium-sized enterprises (SMEs) set up websites or e-commerce platforms to process online orders, a significant portion were less willing to take the plunge.
I recently collaborated with Xero on a behavioral science study that explored the psychological barriers to digital adoption. It found that there remains a resistance to change and a skepticism towards technology that prevents widespread uptake. This is despite the clear benefits it offers.
