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In my last post on the personal decision-making revolution (sorry for the gap!) I talked about one aspect of what ‘a better decision’ looks like. A better decision leads you to a better outcome. (You might say, Well Duh! except for the fact that right now we have a massive trillion dollar marketing industry that invests close to 100% of its time trying to do the opposite).
The second element of ‘a better decision’ is a better decision making process. In fact, in a funny sort of way, this is probably the most important element, because it’s the better process that leads you to a better decision.
That’s what the new industry of decision-support services sells: better decision-making processes.
So what are the key ingredients of a better decision-making process? There is no rocket science here at all. They’re the same as any other product. They:
- Do the job – lead you to better decisions
- Using quality ingredients – fit for purpose and trustworthy
- Are easy to use
- Cost as little as possible
We’ve already covered the output of better decisions, so let’s skip to quality ingredients.
Quality ingredients This has two elements. First, there’s an information logistics ingredient of getting exactly the right information to the right person at the right time. This, in turn, requires a detailed understanding of what decisions people are trying to make, and how they want to make these decisions + plus the mechanics of delivery and presentation. It’s a whole user interface/customer needs research project in other words.
The second element is trustworthiness. You have to be able to trust a good product implicitly without having to worry that it’s going to blow up in your face in some way. In the decision-making market this is all about honesty, impartiality and comprehensiveness – no biasing, just helping.
A key part of this in a low-trust world is information provenance and transparency. Where does this information come from? How do I know I can trust it? Another important element is the ability to access advice – to help me answer the questions I can’t find answers to, or to better understand the answers I’ve been given.
Easy to use This ingredient is crucial because many decisions, and decision-making processes are hard. That’s why we opt for short-cuts which offer ‘good enough’ answers. In fact, in one sense, the deadliest competition for the new generation of decision-support services is not marketers’ blandishments but the habitual short-cuts (such as ‘buy what I bought last time’) which in many cases are now super-fast, super-easy decision-making processes.
There are two ways that decision-support services will rise to this challenge. First, they will flourish first where people do not have short cuts they can trust and rely upon (when making decisions in areas they are less familiar with, or higher risk, for example). Second, they will also flourish by working with rather than against short cuts. If you want peer recommendations for example, Reevoo has built an entire service around providing more, better, more trustworthy peer reviews. It even offers a really fast way to making a decision based just on peer recommendations (justbuythisone.com).
In fact, one of the ways decision-support services will add value is by helping people use short cuts while protecting them against the downsides. For example, by combining consumer reviews of products with price comparisons, they can help those adopting the short-cut ‘buy the cheapest’ distinguish between the cheapest because it is excellent value and the cheapest because it is a thoroughly shoddy product.
There’s a channel aspect to this too. Until recently, decision-support services were confined to home-based online shopping because of restricted access to information in physical stores. Now, with smartphones and services like TheFind and ShopSavvy, that’s changing fast.
Cost If anything this is the real driver of the new industry of decision-support. As I’ve shown, in the industrial age, the costs of collecting, sifting, sorting and using information was so high that people had to adopt short cuts. But today, thanks to search, comparison services, peer review services, etc those costs are plummeting. Before, the costs of investing in better decisions outweighed the benefits. But as costs plummet, the ROI of decision-making is being revolutionised – the costs of investing in better decisions are falling below the benefits. That’s why, for example, 86% of consumers now going to market to buy car insurance consult a price comparison site: because it’s worth it.
Cost and complexity of implementation
There is another aspect which we need to cover. A good decision-making process addresses the costs of implementing the decision as an integral part of the process – because there’s no point in arriving at a better decision if, for some reason, it’s not possible to carry it out.
Sometimes implementation considerations are trivial. If the decision is ‘should I have a cappuchino or latte?’ implementing the decision is not a huge challenge. But if it’s completing a DIY project, moving home, or organising a holiday implementation considerations could be decisive in shaping the final decision. In many instances, decisions about implementation are as important as the decision itself.
None of these factors are powerful enough to create a viable decision support service in isolation. A brilliant product that’s too expensive to buy isn’t worth the candle. Nor is a really cheap one that you can’t trust. It’s the combination of quality inputs (trustworthiness), and quality outputs with ease of use and low costs that’s creating this new market.
A new industrial sector
Once upon a time, decision-making was something we did automatically in our heads. Like most things that happen in our heads, we didn’t realise how complex the process was until we tried to mimic it in the external world.
Delivering scalable services that help individuals make better decisions is a significant design and integration challenge: as significant as the challenge of designing and integrating the components needed to make a product such as an aeroplane, a computer, mobile phone or to deliver appropriate health care. It requires dedicated investment and expertise.
On this score, we’re still at the very beginning. In comparison to the making of better things, we haven’t even reached the stage of mass production … yet. But we are on the verge. All the components of the new industry are now there, and they are being brought together. We are ready for lift-off.