So, what is the right approach? Well, my first instinct is to refer to an article written on Jared Spool's site www.uie.com. Jared Spool is one of the most well-known usability and user interface experts around. The name of the article is The Truth About Download Time.
What does download time have to do with number of clicks you ask? The article is all about user perception versus reality. The basic premise of the article is that user's perception of the speed of a site were strongly correlated with their successful task completion on the site and not at all correlated with the actual speed it took to load pages on the site. In fact, the "fastest" sites according to the test participants actually had the slowest download speeds. Now the article was written in 2001 when download speed was very important as bandwidth constraints freqently made us wait for pages to load.
I would extrapolate these results to a user navigating through a deep site taxonomy or through a series of tasks. When designers and clients force too much stuff up to the home page or put too many links in a category, they are actually making it MORE difficult for users to complete their tasks. When site maps and taxonomies are designed such that there are fewer options that are more clearly identifiable, task completion will be improved. I usually try to keep categories to 7-10 items. A good reference point is the classic journal article by Miller in 1956: The Magical Number Seven, Plus or Minus Two.
There are those who would argue that the use of Miller's paper with respect to navigation is a misinterpretation and that far more links (and presumably fewer clicks) will work just fine. But what has often been absent from discussions about limiting the number of categories in a taxonomy is users employing the process of elimination during navigation. Process of elimination of the incorrect options is far easier with a small set of options. In fact, I recently observed a usability test session where the main menu had only 5 options. This menu had a lot of usability problems to begin with: 1) the options were hidden in a rollover by default; 2) the client's design firm had used icons instead of labels (the latter were only visible on rollover); 3) the nomenclature was not very clear for each option; and 4) the placement of the rollover menu was in the upper right of the screen (one of the last places users typically look). Yet, despite all of these negative usability factors, the menu was largely successful. I attribute that to the fact that there were very few options and users were able to single out choices by process of elimination (even though the couldn't read the labels on the icons and had to keep the choices in memory). The argument to use much larger numbers of links also largely ignores the time time it takes to read those options and the memory required to recall the possible options that could be the right one. Also, users often click the first option they find that sounds right. In many cases, the greater the number of links displayed, the greater the likelihood that there is some overlap within those links which can lead to users exploring the wrong path first and wasting even more time.
There are several caveats to the above situation, though:
1. The number of clicks should be reasonable. If you are forcing people through 15 levels of a taxonomy, they better be doing their taxes or something complex that they have a strong motivation to complete. I am not a proponent of making navigation paths any longer than necessary. For instance, on the Lenovo.com computer site, their new customization screen for purchasing a laptop has a carousel with 39 options. You literally have to click the next button 39 times see each option. And this is only for the "System Compoents" tab. There are more options for the other 3 tabs. And while you can skip around, who knows what you are missing. They should take heed of the Dell example which has more options per page because who knows what you are missing in terms of configuration if you aren't clicking through the 39 options. It could be something important to you.
2. If the list of links are things that most people are familiar with, you can get away with more links. US states for a US-centric site, or city names within a state are examples. For groups of things that are more subjective (like product categories), it is best to stick to ~7-10 links.
3. You must do a good job of creating descriptive, easy-to-undestand, mutually exclusive categories. "Descriptive" does not mean make the category name 8 words long. It should be as short as possible, yet meaningful. "Mutually exclusive" means that a user should not be confused between two categories when looking for an item within the taxonomy. There are cases where items will appear in two categories (or more) within a taxonomy, but those cases should be minimal.
While The Truth About Download Time is not specifically about building taxonomies and site architectures, it IS all about user perception and the correlation of that perception with site performance. I think it is a great analogy to the number of clicks issue. So, the next time you hear someone say "Everything on the site should only be two clicks from the home page", you will have some sound reasoning about why that is not always the case.
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