Smart Choices: Overcoming Choice Paradox and Sunk Cost Fallacy in Learning Technology Investments

We’re in the game of behaviour change, right? So, let’s look at our own behaviour when it comes to learning technology through the lens of behavioural economics.

At the last count by RedThread Research, there are over 420 learning technology platforms, and that number continues to grow. As a buyer, you might think “Great, so much choice, there is bound to be one that’s just right for us!” Research by American psychologist, Barry Schwartz, on the theory of choice paradox, tells us that is not the case.

As there are so many options presented to us, we can easily become overwhelmed. Whilst we might believe being presented with so many options is good, it actually leaves us more dissatisfied with the choices we make. I am curious if this is why we often see a high dissatisfaction rate with learning technology in Fosway’s annual Digital Realities research.

We only have to think of the world of online dating to understand how this plays out. Back in the day, our parents and grandparents had a limited choice in which to find the ideal mate. Nowadays, as Steve Jobs might have said, “With thousands of potential partners in your pocket, you’re only one swipe away from your next date.” As a result, people are less likely to invest the time to get to know someone and commit.

What can we do to overcome this? Firstly, by imposing self-determined limitations on our choices – which means having robust use cases grounded in your context and business outcomes. Secondly, there are limitations on the number of options you will consider. Research by Schwartz showed people were happier when they limited themselves to 3 options rather than 2.

Let’s now look at the antithesis of the choice paradox, its good friend sunk cost fallacy.

If you’ve ever bought expensive clothes that now hang unworn in your wardrobe, or attended an event you didn’t really want to go to because you’d already bought the ticket, then you’ve committed the sunk cost fallacy crime.

Digital learning content and platforms are the biggest investment L&D teams make - its big money. But could you show me how much money? Do you know how much all the time you’ve spent deciding on, meeting about, and implementing your learning tech and content actually costs? And then there’s the ongoing admin, content strategy (I hope you have one), and design costs.

In all my practice and experience I have never seen the costs and returns of running L&D as a business truly calculated.

Just like a romantic relationship, the longer we’ve been together the harder it is to break up. As a profession are we clinging hopefully to the belief we should keep doing what we’ve been doing, even when we're not getting the expected (or promised) return on investment?

The sunk cost fallacy is a vicious cycle because we continue to invest money, time, and effort into something we have already invested in. And the more we invest, the more we feel committed to continuing and the more resources we are likely to use. In L&D, it appears we are sticking with a plan even though it no longer serves us. In the desire to avoid the negative emotions of saying ‘This isn’t working’ we’re only prolonging the agony of our employees.

In my practice, I have seen it all. From failed implementations, often resulting from a soft launch with poor prior stakeholder and user engagement. Questions that are asked at implementation that should have been asked at the RFP/decision stage. A lack of testing workflows or blind testing to get feedback from users. Just like a new love, we can fail to see the deal breakers. We think we’ve found the one, only to find incompatibility with our real needs.

So, we break up; we move on to something new. But are we in danger of repeating the same mistakes with our latest loves?