What Is Analysis Paralysis?
How to Avoid Decision-Making Pitfalls by Taking Action
Addressing customer needs is to truly understand the customer through data. Sounds simple right? Sadly, companies are accumulating and scrutinizing so much data that it can often become overwhelming – a paralysis of sorts.
Introduction
Analysis Paralysis may sound like a new Radiohead song. Still, to no surprise, it’s a genuine hardship that ultimately inhibits the health of our decision-making powers, the health of our business outcomes, and the health of ourselves.
This article looks at the principal causes of data paralysis, what these challenges have in common, the negative consequences – from both a professional and personal perspective – and why action is the light at the end of the tunnel.
What Is Analysis Paralysis and What Causes It?
Also known as Data Paralysis, this problem is essentially a severe form of procrastination. If the Action Gap – the failure to link customer data and analysis with action – is the most significant new challenge in CX, then data paralysis is undoubtedly one of the significant contributors.
In the 2022 action management study, customer experience leaders voiced their most significant challenges when collecting and analyzing customer information.
The main obstacles in analyzing custom data in CX are:
- Data not propagating across the company
- Lack of data analysts
- Difficulty identifying drivers and priorities
- Siloed data
- Overwhelmed by too many dashboards
- Too much data and noise
All of these obstructions are directly or indirectly tied to analysis paralysis. So let’s break down some of the major causes.
Difficulty Managing Vast Amounts of Data
Currently, over 40 zettabytes of digital information exist globally and is expected to grow to 180 zettabytes by 2025 – accelerated by remote working and remote learning.
That’s the equivalent of streaming the entire Netflix catalog half a million times or every human on the planet tweeting for 18,000 years. Happy New Year, 20023!
The sheer volume of information we collect from endless sources, including customer data, has become progressively complicated and overwhelming to manage and analyze. This can result in a frozen state of inaction when making choices and decisions, caused by frustration, confusion, lack of understanding, and the fear of failing.
Over-Analyzing and Over-Thinking
This is a road we’ve all traveled before. You’re experiencing dashboard fatigue, with your eyes glued to a screen of overcrowded and sometimes poorly curated information – uncertain which metrics or insights will influence your decision-making, zapping time, energy, and resources.
This results in over-analyzing data to try and extract the answers you need. Agonizing over every detail and over-thinking the endless alternatives and solutions to the problem you’re trying to solve.
When it comes to actions and decisions, this is a road to nowhere.
Fear of Making the Right Choices and Decisions
Fear is a fundamental component of analysis paralysis, stuck at a junction of fear, incapable of moving forward. The fear of being wrong, the fear of failure, the fear of indecision, and a fear of the number of choices at your disposal.
Psychologists have suggested that choice paralysis (fear of making the wrong decision) is a cause of anxiety. Barry Schwartz, author of The Paradox of Choice: Why More Is Less, explains that:
- By having more choices, we make poorer decisions.
- Too much choice causes paralysis, unable to make any decisions at all.
- We spend more time thinking about the choices we didn’t make rather than being satisfied with the ones we made.
Data Distrust
Questioning the quality of data to make informed choices is prevalent amongst decision-makers, perhaps from sheer complexity, conventional mindsets, data silos, and transparency.
According to a recent KPMG study of over 2000 business leaders on the topic of Trust in Analytics:
- 62% of organizations are not confident with their customer insights data
- 60% do not fully trust their data quality
- Only 10% believe they excel in managing their data and analytics insights correctly
This lack of trust encourages executives to fall back on guesswork, assumptions, and experience instead of being data-driven to try and make good decisions.
What Is the Negative Impact of Analysis Paralysis?
Office workers are spending more than 50% of their time receiving and managing information rather than using it to do their jobs, according to a workplace productivity study.
62% of employees think their work suffers because of information overload, and one in two professionals feel demoralized when they can’t manage all the data that comes their way, leading to performance issues and mental fatigue.
Performance
When people cannot cut through mountains of information, visualize data effectively, or uncover a compelling story using data, this can render employees more confused than confident. This information immobility can lead to:
- Missed opportunities
- Draining of time and resources
- Slower and drawn-out decision-making processes
- Lower creativity and performance (killing our best ideas)
Mental Fatigue
There is also the mental toll of over-analyzing, over-thinking, and under-performing.
For example, our working memory provides temporary storage for information necessary to perform and complete tasks. However, the working memory has limited capacity, so we become overwhelmed when too much information is presented at once. This can increase mental fatigue and have adverse effects on task completion.
In terms of mental fatigue expedited by continuous decision-making, Chief Clinical Wellness Officer and Psychiatrist Dr. Lisa MacLean says that:
“By the time the average person goes to bed, they’ve made over 35,000 decisions and all of those decisions take time and energy, and certainly can deplete us.”
Overcoming Analysis Paralysis by Taking Action
The main thing to remember is that analysis paralysis is a momentary problem. Improving data collection and analysis methods goes a long way in making your customer data useful, and most importantly, actionable.
Translating data into informed actions leads to better processes and a better return on investment when it comes to CX initiatives.
Actions to Manage Vast Amounts of Data
Bigger is not necessarily better in data analysis – it’s gaining a better understanding and always keeping your objectives in mind.
- Simplify and improve dashboard layouts
- Organize data into digestible layers
- Align KPIs and supporting metrics
- Know what you’re looking for
- Make small decisions and embrace good enough
Actions to Prevent Over-Analyzing and Over-Thinking
We know that delaying action while over-analyzing information holds you back, so going back to basics with a simple approach, or trying to limit the amount of information you consume allows you to make room for decisions.
- Put a time limit on your research (timebox research)
- Set a time limit and monitor progress
- Step away and try again with a fresh perspective
- Ask for a different perceptive form from another set of eyes
- Make small decisions and embrace good enough
Actions to Overcome Decision Fatigue
Knowing that sometimes there isn’t a right answer is an immediate reliever of pressure. It’s not making the right decision, it’s making a decision the right one.
We are often not dealing with type 1 decisions anyway, the ones that can’t be changed or walked back on. So making a good enough decision with the information you have at hand can be sufficient. The next step is to work hard to make that decision work, through iteration, learning, and adjusting.
- Don’t worry about making the right decision
- Just make a decision and iterate
- Stair-step decisions, small steps towards bigger decisions
These same principles can be applied to overcoming data distrust.
Final Thoughts
We surveyed 350 CX professionals about using data to improve customer experience, and the results show that the gap between analysis and decision-making is a very common one:
- 54% of respondents admit they are not properly equipped to turn customer data into CX initiatives and actions
- Two-thirds show no enthusiasm for the way their company collects and presents data
As a big piece of the Action Gap problem, analysis paralysis can extinguish some of our best ideas and best work, but it can end up being a brighter story. We can avoid paralyzation by taking small actions, and prioritizing adequate decisions over optimal ones, instead of examining every option and looking to make the best decision.
When it comes to mental exhaustion, think about the automatic actions we take throughout our day. Actions like brushing our teeth or making a cup of coffee have no negative effects on our limited daily willpower. Whereas making thousands of decisions each day takes a huge toll on our mental battery power.
So leaning into automated decision-making, or at least narrowing down the field of actionable steps, would free up the capacity to make intelligent data-based decisions without over-analyzing and under-performing.
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