Bad decisions lead to bad outcomes — and other myths Product Managers believe in
I recently read the book — Thinking in bets and it really changed the way I think about life and decisions. Annie points out right away that life is not a game of chess but more like a game of poker — a lot depends on the cards you get or luck. But that doesn’t stop the really good players from winning.
Here is my perspective on the most common myths in decision-making, prioritization and resource allocation in business scenarios, in general, and Product Management, in specific.
Myth #1 Bad decision lead to bad outcomes, Good decisions lead to a good outcome
An outcome is a function of a dozen other factors, unluckily, luck being one of them.
A bad decision might lead to a good outcome and a good decision might lead to a bad outcome. Where we can control some of the parameters, we can never be a hundred per cent sure that something will turn out the way we hoped.
Foodie, a bulk food delivery app, is extremely popular among college students. One of the major problems students face is slow and unreliable internet on their phones. So the folks at Foodie spend all their resources in the next six months in building Foodie Lite that helps users place an order instantly, even on very slow internet. With the information and the data points they had at that point, this was the best decision and would have helped them beat the competition by a huge margin.
Just when Foodie is about to launch the Lite version, a popular telecom company comes up with a super cheap & fast internet plan for students and suddenly, the Lite version is redundant. Meanwhile, Foodie’s main competitor spent the last few months building a feature to deliver stationery items along with the food, giving them a considerable head start in the fast & cheap internet era.
In a world where the telecom company had not changed anything, Foodie would have flourished.
But that doesn’t mean we can’t increase the chances of a good outcome. There are two major ways to do that
- Gathering as much knowledge/information/data as possible and doing an in-depth analysis of what you know, weighing in all the factors in play
- Knowing the unknowns
It’s always a good idea to know what are data points which you don’t/can’t have access to while you are making a decision.
If the folks at Foodie had listed all the unknowns, they would have known that they don’t know what is cooking in the telecom industry. They might have either tried to find the trends in telecom or decided to offset the risk posed by the unknowns by allocating a significant chunk of resources to another feature that had fewer unknowns/less impactful unknowns.
Myth #2 People with higher IQ take better decisions/are not prone to biases
In fact, multiple studies suggest that smarter people find it easier to justify their biases to themselves and others. You might be super smart, but still, fool yourself into believing that you are unbiased.
But smart people are also very good at pointing out the biases in others’ decisions.
Putting two and two together, it always helps to talk to people who can help you see your biases. It’s in your own hands to cultivate a culture of open and honest conversations with smart people who have a different approach/understanding of things.
List of common biases in decision making — https://www.psychologytoday.com/us/blog/thoughts-thinking/201809/12-common-biases-affect-how-we-make-everyday-decisions
Myth #3 Only way to make better decisions is to travel back in time
In fact, we need to perform reconnaissance on the future. Imagine the scenario of the time in future when the outcome of your decision is in front of you. What might cause the outcome to be bad? What might cause it to be good?
For example, when the Product team at Foodie was taking the decision of putting all their resources into developing the Lite version, they could have brainstormed on — What could possibly go wrong when the Lite version is launched in six months? What could they do to mitigate these issues?
If we don’t try to hold all the potential futures in mind before one of them happens, it becomes almost impossible to realistically evaluate decisions.
In the words of Nietzsche, regret is adding to the first act of stupidity a second. We are working on developing a platform that would help minimize regret and help you make the best decisions. If that excites you, keep watching this space for updates!
