My Favorite Analytics Story…Is About Cake

Here’s a Cross post of a piece I wrote on the Capital Analytics blog:

One of my favorite stories about talent analytics has nothing to do with talent or analytics. It’s about cake. Well, it’s not really about cake, it’s about how the mind makes decisions, but we’ll get to that.

Let me introduce to you a wonderful experiment run by professor Baba Shiv from Stanford. Professor Shiv works in the field of neuroeconomics – the study of the mind’s electrical impulses and chemistry when a human makes a decision. In 2008, he ran an experiment to understand one aspect of how people make decisions based on data.

The experiment went like this: Participants sitting in a nondescript room were asked to memorize a set of numbers. Some were asked to memorize two numbers. Some seven numbers. (Let’s call one such participant Steve.) After Steve had the numbers in memory, the researcher asked him to walk down the hall to another room and relay the memorized numbers to another staff member. However, that wasn’t the real experiment at all.

While the Steve was walking down the hall, keeping the numbers in his memory, another staff member would “coincidentally” appear in the hallway holding a tray of dessert. This staff member said to Steve, “Oh, you’re participating in our study? Thank you so much! You know we just ended a big meeting and have all of these leftover snacks. Can I offer you some fruit or a piece of cake?” Professor Shiv then compiled the choices of each participant. Who chose the fruit? Who chose the cake?

The results from this study were surprising. The people who memorized seven numbers, were twice as likely to choose the cake vs. the fruit. The more data a person kept in short term memory, the more likely they were to make a decision based on emotion vs. rational thought.

Why would that happen? It turns out that our short term memories are like hard drives – it’s possible to fill them up. Neuroscientists call this, “cognitive load”. While your frontal lobe is busy memorizing new numbers, a new task requiring a decision may not be routed to the rational part of the brain. Sometimes the emotional centers of the brain make the decision.

Let’s connect the dots with talent analytics. The moment that one of our senior managers reads one of our well-researched, completely revolutionary, information-packed decks on human capital, it’s possible that we are setting that executive up to fail. While they are reading and absorbing the new numbers, they are making decisions . But which part of them is making that decision? The rational side or the emotional side? Particularly with talent decisions, where a manager may be more emotionally tied to a decision, it may be difficult – physically difficult – for a leader to make a decision based on loads of data. While they are absorbing data in the frontal lobe, the decision is being made… by the emotional centers of the brain.

I freely admit that I have bought into the idea of cognitive load, and I’ve changed the way I provide data to others because of it. Here are a few lessons I’ve learned from Professor Shiv:

First, don’t defy the laws of physics by cramming tons of data on a single page. Excel does allow us to use a 6 point font, but please pity your reader and don’t use it.

Second, know what decision you are asking someone to make. What information is needed to make that decision? Keep that data, and strip out the rest. Throw the backup data in an appendix if you must.

Finally, know what story you are trying to tell. Does it flow? Does it have a beginning, middle, and an end?

There’s so much more to this topic, but I don’t want to create cognitive load. If this is an interesting topic to you, listen to this radio piece on the experiment and try out new ways of sharing your data. If it doesn’t work, come and find me in New York. I’ll buy you a cup of coffee. And maybe a slice of cake.

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Jeremy Shapiro is an executive in HR at a leading financial services firm, working on talent analytics. Formerly a Senior Vice President of the Hodes iQ Talent Management Suite at Bernard Hodes Group and is a co-author of the HR metrics book Ultimate Performance. Jeremy has coached hundreds of companies in recruiting and HR technology solutions across industries and sizes. Jeremy is a frequent speaker and author on HR technology topics and HR Business Intelligence topics, such as SHRM, IHRIM, the Human Capital Institute, HR.com and more. He is a frequent contributor to articles and whitepapers on HR Business Intelligence. Jeremy holds a Masters of Science in Information Systems from NYU and a B.A in Economics from Rutgers University. Specific topics of research include HR metrics, talent management technology, and next generation recruiting technologies.

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3 comments on “My Favorite Analytics Story…Is About Cake
  1. […] first problem is eloquently described by Jeremy Shapiro, who in his recent post writes about “cognitive load“. Here he points out that too much information will make […]

  2. […] actually make people make irrational and poor decisions even faced with good and objective facts. Elsewhere it has been argued that information overload (too much good data) will make people to make […]

  3. […] has highlight how important it is to keep the information down to the bare essentials due to cognitive load. I have also shown how  cognitive dissonance will create a bias for a certain decision despite of […]

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Talent metrics and human capital analytics galore.                                                                        

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Cornell ILR, Metrics that Matter: How HR Analytics Impact the Bottom Line, June 3-4, 2014 or November 13-14, New York, NY

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