Wi-Ai and the “Perfect Decision”

Wi-Ai and the “Perfect Decision”

Wi-Ai and the “Perfect Decision” 1750 1346 Wi-Ai.net

‘How To Make The Perfect Decision’ sounds like one of those books you find in joke shops which, when you open it, reveals 60 pages of blank paper.  In truth is there can be no hard and fast rules which can guarantee a decision will always be right. If there were, we would all be making perfect decisions all the time.

Nonetheless, if you are a director or senior manager for a financial services provider it remains frustrating- and sometimes even saddening- to see customers make the same types of self-sabotaging decisions, over and over again. These range from panic selling during what looks likely to be a short-term blip in the market to choosing to over-value one piece of data against another based on how and when they received it, rather than its significance.

By way of one example of a barrier to good decisons, many of us resist making up our minds until we feel we have all the facts at our fingertips. Yet there is a school of thought (famously espoused by Jeff Bezos) that suggests that the cost of waiting until you have assembled all the facts may well be outweighed by the benefits of making an informed judgement based on say 70% of what you need to know.  Inevitably there may be some decisions along the way that go against you, maybe even badly. However, because doing without some relevant information allows him to move quickly and be more proactive than competitors, Bezos feels that any advantage conferred by having the other 30% of the data is on balance outweighed over time; the decisions that pay off handsomely more than compensate for the ones that turn out badly.

The quest for more and more data even has a name. “Information bias” is the human tendency to seek and evaluate data, even when it’s useless in understanding a problem or issue. Coupled with other biases such as recency bias (the tendency to attribute disproportionate importance to the most recent events or data), it’s heady stuff.

It is vital for your clients to make informed decisions. The difficulty is helping them understand their own tendencies (or biases) when called upon to do so.

This is especially tricky when investors are bombarded with vast quantities of information, including moment-by-moment updates from financial commentators and other media sources.

These reports may contain little relevant data for investors who are concerned about the medium to long term prospects of their investments. Yet these news items can overly affect investors’ financial perspectives, leading them to make self-sabotaging decisions.

We can’t promise “perfect decisions” any more than we can create Bezos levels of business acumen. However, by helping your clients understand and take ownership of their behavioural biases, Wi-Ai tools can support your customers in making considered and potentially more profitable decisions.

How do we do it? Get in touch at [email protected] to arrange a conversation.

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