Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.
- Understanding Occam’s Razor
- Examples of Occam’s Razor in companies
- Where can Occam’s razor be applied in business?
- Occam’s Razor and Law of Parsimony
- Five elements of the law of parsimony
- Parsimony psychology in the workplace
- Occam’s Razor vs. Hanlon’s Razor
- Occam’s Razor vs. Occam’s broom
- Occam’s Razor vs. Hickam’s dictum
- Occam’s Razor vs. Pascal’s Wager
- Key takeaways
- What is an example of Occam's razor?
- What is the opposite of Occam's razor?
- What is Occam's Broom?
- Connected Business Heuristics
- Other connected business strategy frameworks
Understanding Occam’s Razor
Occam’s Razor is a principle that states that one should not increase (beyond reason) the number of entities required to explain anything.
In other words, with all things being equal, the simplest solution is often the best one.
The principle is attributed to 14th-century English theologian William of Ockham.
It’s important to realize that Occam’s Razor is not 100% reliable. That is, the simplest solution is not always the correct solution.
But when a business is presented with several solutions to a problem, its best course of action is to choose the solution with the fewest assumptions.
In business, companies spend vast amounts of time and money recruiting new customers and retaining them as loyal followers.
Consumers themselves are bombarded with messages daily and are easily distracted by social media and other sources of cognitive overload.
While complex marketing strategies may be somewhat effective in attracting customers, far simpler solutions help businesses retain them.
Here, the simplest solution for the business is to focus on:
Occam’s Razor suggests that product development teams discard as many features as possible and go for the simplest, most effective solution.
Simplifying customer services means removing as many barriers as possible.
It might be streamlining the customer purchase journey by removing unnecessary sign-up forms.
It might also mean removing wait times on customer support calls. Ultimately, consumer behavior is guided by simplicity and a pleasurable shopping experience.
Defining their target audience
Simplicity is achieved by starting small and focusing on the traits of a single, ideal customer to develop a marketing persona.
This is Occam’s Razor at work. Simplifying procedures increases productivity and profitability by focusing on processes most likely to deliver results.
Examples of Occam’s Razor in companies
In an attempt to boost their profits, McDonald’s created the now-infamous phrase “Would you like fries with that?”
Behind this catchphrase, marketers selected a very simple way to increase profits out of what was likely a large spread of options. Fries are of course made with potatoes, which are cheap and abundant and thus very profitable.
While the removal of the headphone jack may have been a case of over-simplification, the design of the iPhone also reflects Occam’s Razor principles.
With just a single button on smartphones and tablet devices, designers gave consumers a sleek and minimalist product without extraneous features.
Where can Occam’s razor be applied in business?
In this section, we’ll detail the ways Occam’s Razor can be applied in business to reduce complexity in certain situations.
Too many websites
Some business owners create a separate website for each of their brands with the belief that more sites equal more sales.
However, this does not tend to be the case.
Operating a single website is much simpler and more efficient. It is also much more cost-effective since hosting and maintenance costs are reduced.
In the context of marketing, too many websites means finite resources must be spread and diluted in the process.
Aside from poor resource utilization, this also reduces an individual website’s ability to dominate its niche and be ranked on the first page of search results.
Other companies dilute their presence with different websites for their B2B and B2C operations.
Unless there is a valid reason for doing so, these models should not be separated as doing so only leads to cost increases.
Instead, it is better to keep it simple by creating a website that appears for all intents and purposes to be a B2C site.
B2B customers can use the site by accessing a password-protected area where they can see a list of business prices, make volume purchases, or contact a dedicated support team, for example.
Why is this the case? For one, simple MVPs tend to be cheaper and as a result, are associated with less risk. They can also be developed more rapidly, which shortens the time until the company can enter the market.
Despite these benefits, some product developers choose to ignore Occam’s Razor and develop complicated, bloated proposals where an excess of bells and whistles is the norm.
The goal here should be to work with the customer and assess each feature on its own merits to determine whether it contributes to functionality.
Superfluous features that do nothing but add complexity to the MVP should be discarded.
Business owners can also become preoccupied with complexity when looking to expand into international markets.
An eCommerce site looking to sell tennis rackets in France and Spain, for example, may feel the need to replicate their website on a .fr and .es domain.
However, this situation is similar to building a separate website for each brand. That is, it tends to be more expensive, more inefficient, and less effective in terms of SEO.
For most eCommerce companies, a simpler course of action involves using canonical link elements for each country on their core website.
For example, tennis rackets for sale in France may be found at tennisrackets.com/fr/ and in Spain at tennisrackets.com/es/.
While a .fr site written in French may convert higher, a separate French page on the core tennisrackets.com domain will be effective provided it prices the tennis rackets in euros and details country-specific shipping policies.
In fact, any decrease in conversation rate is normally offset by reduced maintenance costs and the increased authority and visibility of the tennisrackets.com domain.
Occam’s Razor and Law of Parsimony
Parsimony psychology is an idea that advocates finding the simplest, most accurate explanation for any cognitive process or behavior.
Aspects of parsimony psychology may be referred to as the law of parsimony or Occam’s razor, with the latter named after William of Ockham.
Sometime in the 1300s, the theologian and logician wrote that “plurality must never be posited without necessity.”
However, the ideas that form the basis of the law have existed at least since the time of Aristotle who said “the more limited, if accurate, is always preferable.”
Since then, Ptolemy and Isaac Newton have used the idea to explain natural phenomena, and in the modern area, it has found use in healthcare and psychological contexts in particular.
So how exactly can parsimony psychology be defined?
The first clue lies in the word parsimony, a term based on the Latin word parser which may be defined as excessive thriftiness or, in less complimentary terms, miserliness or a lack of generosity.
Thus, parsimony psychology advocates that when academics want to explain a cognitive process or behavior, they should endeavor to find the simplest, most accurate explanation that fits the available evidence.
Five elements of the law of parsimony
Five of the most salient elements fundamental to parsimony and thus parsimony psychology are briefly explained below.
1 – Find the elegant solution
The elegant solution is the one that operates within the bounds of the law of parsimony.
In psychology, it may be a conceptual framework that can explain a behavior in the most simple terms or with the fewest components.
In business, think of an optimized assembly line that produces satisfactory results and contains no unnecessary steps or processes.
2 – Make assumptions that can be dealt with easily
If assumptions are present in a solution, further research is crucial to discover whether they are valid and can be efficiently dealt with.
If they cannot be validated, stick with the solution with the fewest assumptions.
3 – Refer to things that are observable
Observable things may comprise objects, behaviors, motions, body language, KPIs, or performance review results.
4 – Few entities
The law of parsimony also points out that history is littered with ordinary phenomena that have been explained countless times by countless entities with complex descriptions.
Therefore, it is important to involve as few entities as possible to explain an event.
In that important sales meeting, ensure that only people who are knowledgeable about the product and can sell it to the potential client are in attendance.
Remember, there is no need to overcomplicate an event or strive for perfection when a desirable result has been produced by others many times beforehand.
5 – Simple is best, but not always possible
Simplicity is important in parsimony, but so is accuracy.
While it may be tempting to default to the simplest solution right away, there are occasions when more information is needed to arrive at the solution we want.
Think of the thrifty consumer who wants to purchase a vehicle.
If they don’t research durable and inexpensive models beforehand, they’re more likely to waste their money on a car that either doesn’t run or is constantly off the road for repair.
Parsimony psychology in the workplace
We all can relate to having one of those days where everything seems to go wrong.
Perhaps we missed our usual bus, tripped on the pavement in our haste to make the office, and arrived at work late anyway where we received a reprimand from the boss.
Then, when it comes time a break, we realize our lunch is sitting in the fridge at home and the café is closed.
How can you explain this using parsimony psychology? Here are some possible explanations for these events:
- You’re just having a bad day. No need to panic, they happen from time to time.
- The world is out to get you and restore balance. After all, the bus was early three times last week.
- Someone is out there whose primary intention is to sabotage your life. This may be the café owner, the bus driver, or your boss.
Remember from earlier that the parsimonious solution is one with the fewest assumptions. In this case, the first explanation is the simplest and therefore most likely to be correct.
Key takeaways on the law of parsimony
- Parsimony psychology is an idea that advocates finding the simplest, most accurate explanation for any cognitive process or behavior.
- Five of the most salient elements of parsimony and thus parsimony psychology include finding the elegant solution, making assumptions that can be dealt with easily, referring to things that are observable, involving as few entities as possible, and ensuring solutions are both simple and accurate.
- In the workplace, parsimony psychology can also be used to explain a bad day where everything seems against us.
Occam’s Razor vs. Hanlon’s Razor
Similar to Occam’s Razor, Hanlon’s Razor proposes that often an outcome can be explained through stupidity, rather than malice.
In short, in a complex world, where it’s easy to think in terms of conspiracy theories, Hanlon’s razor is a great heuristic, which tells us, often stupidity is the cause of many problems, rather than malice.
Variations of Hanlon’s razor go back as far as German writer Johann Wolfgang von Goethe, who equated malice and stupidity with incompetence.
However, the adage was named after Robert J. Hanlon, who submitted the quote for inclusion in a joke book.
In the modern context, Hanlon’s razor is a somewhat philosophical concept.
Indeed, the principle of a razor in philosophy is one that allows the individual to eliminate or “shave off” unlikely explanations for a particular phenomenon.
Instead, Hanlon’s razor advocates that problems and bad experiences are part of life. In the vast majority of instances, there is no malice behind them.
Thus, similar to the Occam’s Razor, Hanlon’s Razor proposes a simpler solution to complex situations.
Occam’s Razor vs. Occam’s broom
Occam’s broom is a sort of bias, coming from the fact that people in various fields look for confirmation to evidence what they’re looking for.
In short, instead of searching for something with the core belief to change their minds, they tend to search for information that only confirms their beliefs, thus reinforcing their thesis.
Differently from it, Occam’s razor focuses on keeping things simple in a complex world. In short, Occam’s broom is the other side of the coin, where people focus on what they believe is true instead of what disconfirms their beliefs.
Occam’s Razor vs. Hickam’s dictum
Hickam’s dictum is the counterargument that helps balance out Occam’s razor.
Indeed, while Occam’s razor is an extremely effective heuristic, this can also lead to over-simplification in a complex environment, where many factors might influence an outcome.
While Occam’s razor helps speed up decision-making when it comes to decisions where. The outcome might have a wider impact, so it’s essential to balance out Occam’s razor with Hickam’s dictum.
Occam’s Razor vs. Pascal’s Wager
Pascal’s wager is primarily a philosophical argument whose aim is to find an optimal answer.
Whereas Occam’s razor is a heuristic, or shortcut to making effective decisions, in a complex environment.
Thus, where Pascal’s wager is more of an optimization formula to achieve infinite rewards, Occam’s razor is a more practical approach to decision-making, which is extremely useful in complex scenarios where adding more valuables to a solution makes it harder to define the problem.
Occam’s razor, in that respect, helps and drives execution.
- Occam’s Razor says that the simplest solution is more likely to be the correct solution. The theory does not provide the correct solution 100% of the time, but it does posit that a simpler solution with fewer variables yields more predictable results and is easier for the business to execute.
- Occam’s Razor helps businesses focus on streamlining product development, simplifying customer service, and defining a target audience. McDonald’s and Apple are two examples of companies that have used simplicity to their advantage.
- In more general business applications, Occam’s Razor is used to reduce the complexity that arises from too many websites, bloated product proposals, and international expansion efforts.
What is an example of Occam's razor?
A great example is Apple’s iPhone, which with just a single button on smartphones and tablet devices, designers gave consumers a sleek and minimalist product without extraneous features. The simplicity of Apple’s GUI and UX is a trademark of the company, and the fact that anyone, in no time, can learn to use an Apple device, makes it a perfect example of Occam’s Razor.
What is the opposite of Occam's razor?
The opposite of Occam’s Razor is Hickam’s Dictum which works as a counterargument to Occam’s razor. Indeed Hickam’s Dictum poses that to understand complex situations, a person, or group must be looking at multiple variables.
What is Occam's Broom?
Another concept connected to Occam’s Razor is Occam’s Broom, where when inconvenient facts that do not fit into someone’s hypothesis or serve their agenda are swept aside or hidden. This bias can lead to many judgment errors and is pervasive in various domains, especially in cognitive science, where cherry-picking (you select only facts that are in line with your thesis) can become an issue.
Connected Business Heuristics
Other connected business strategy frameworks