Information keeps you competitive; Outcomes matter

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THE ESSENCE
OF DECISION
How information can keep you
competitive

2. …Ever wondered:
- How some sports teams win consistently,
while others languish at the bottom of a
table?
- How the worst house on the street can be
sold for the highest price?
- How price has everything to do with how
much you pay?
- Why outcomes matter?
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3. “Decisions are necessarily a function of information” – Kenneth
Arrow (Nobel Laureate, Economics 1972)
“Strategy is a pattern in a stream of decisions” – Henry Mintzberg
(1994)
“Quality of decision making is reliant upon the knowledge workers
access to good information – Peter Drucker (1955)
“Know your enemy and know yourself, find naught in fear for 100
battles” – Sun Tzu (Military Strategist – 6th
Century BC)
“I have always found that plans are useless but planning is
indispensable” – Dwight D. Eisenhower
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4. Strategy
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5. The high level planning of goals and objectives
under conditions of uncertainty and
maintaining a position of advantage
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6. Uncertainty…?
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10. What are the Top 5 Reasons Small
Businesses Fail?
• Unknown Market Clarity (Why, How, What,
Where, When, Who)
• Growth (Wrong geography; Too Quickly;
Too Slowly)
• Competitor Knowledge (Who are they and
what are they doing?)
• Organization (Poor planning; Operational
inefficiencies; Poor accounting; Bad
Management; Failure to delegate)
• Failure of Market to React
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11. We live in a business world
where…
- The business environment is clouded with seemingly
contradictory information
- We are bombarded with new information constantly
- We don’t always know what constitutes the right
information…or how it effects how we make decisions
- We need to stay current and informed about our
direction
- We lack the tools for information symmetry, to remain
competitive
- We need to plan ahead
WE NEED INFORMATION
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12. Information…
• Reduces risk
• Increases certainty
• Is the creator of goals and objectives
• Increases the ability to plan
• …To execute
• …To DECIDE
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13. Consumer Decision Making
• Five Step Decision Making Process
• Dependent values: how involved the consumer is in
their commitment to the process
• Corporations can manipulate the process at any stage
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 Gala
 Honey Crisp
 Braeburn
 MacIntosh
 Fuji

15. Using Fallacy of Demand
• Mostly consumers choose products based on value, quality
and availability
• Consumers get used to purchasing certain products at a
certain price - Anchoring
• Anchoring is how one associates value to an arbitrary
product
• Demand therefore can be easily manipulated and made
false
• The value of a product is related to how it is associated to
supply and demand, and…
• Demand is dependent upon supply and it is based on
memory rather than preference
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16. Bias
• Corporations decision making invariably
takes advantage of cognition, belief and
confirmation biases
• Think of the Brands as “proprietary
antonyms” in common useage:
• Kleenex (instead of tissue)
• Q-Tip (Cotton swab)
• Zipper (originally a brand by BF Goodrich)
• Band-Aid (Elastic Plaster)
• Champagne, Cheddar, Tequila
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17. Word Use in Decision Making
• “Climate Change” – 1972 paper; 1998 common usage
• An analysis of the language used in real-estate ads shows
that certain words are powerfully correlated with the final
sale price of a house - Five of them have a strong positive
correlation to the ultimate sales price, and five have a
strong negative correlation
• Common: Spacious, State-of-the-art, granite, charming, great
neighborhood
• Positive: Granite, State-of-the-art
• Negative: Spacious, charming, great neighborhood
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18. Do Top Football Teams Always
Win?
• 2009 Univ. Maryland study
• Looked at top seeded teams expected to win 2006
World Cup
• Top teams only have a 28% chance of winning
• Why? What accounts for this?
• Predictors…
• Outcomes: 58% determined by goal order
• Team 62% more likely to advance from deficit win
• However: if first goal is scored later in the match,
scoring team 80% more likely to win (RMC
Kingston, ON 2009/McGill)
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19. Outcomes Matter
• Information is important
• Create models
• Can justify and clarify goal setting
• Determine realistic expectations
• Mitigate hazards and barriers to growth
• Use information to increase chances of
success and beat the information
asymmetry war
• Better Outcomes = Better Payoffs
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20. THANK YOU
Questions?
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