People and companies reward the providers of misleading information more than they reward truth tellers. An unbiased appreciation of uncertainty is a cornerstone of rationality — but it isn’t what organizations want. Extreme uncertainty is paralyzing … Acting on pretended knowledge is often the preferred approach.
— Daniel Kahneman
Decisions often are made without adequate information and without the benefit of solid analysis. We can help you identify, measure, and understand the factors driving the decisions your company takes in its daily operations. More importantly, FinEx can help your company develop effective strategies for managing the results of your most important decisions.
How? Many managers believe there is a single answer to any particular problem — “The Number” they call it. This is one-dimensional thinking. Decision making involves uncertainty and requires assumptions about a variety of unknown variables. In short, this means there exists more than one solution — a range of Numbers.
Simplicity is good, but looking for The Number is overly-simplistic. It leads to errors and bad solutions. Decision making requires managers to explore and understand different solutions to any given problem.
Decisions often mean change, and managing change is especially fraught with risk. But current economic conditions require change from businesses large and small, for profit and non-profit. No one is exempt.
Whether your firm needs to grow, expand its offering of products and services, reduce expenses relative to revenues, redefine markets and operations, acquire another line of business, or restructure, the one certainty is what lies ahead is uncertain.
Recent history shows what you don’t know can definitely hurt you. Just consider your experience over the last couple years.
At all levels of business, huge economic and financial risks were taken, and the largest financial, economic collapse since the Great Depression ensued.
Perhaps the riskiest behavior is not understanding the risks of the decisions we take. It is a mistake not to identify and examine them.
FinEx can help you and your company make better decisions in your daily operations. Decision analysis is central to the FinEx approach to consulting.