Decision Making Under Uncertainty

Smart Decisions in Foggy Futures: A Checklist

When the future is unclear, don’t guess. Use these steps.

1. Define Your Decision:

   • What exactly are you trying to decide? (e.g., “Launch Product A or B?”)
   • What are your clear alternatives?

2. Unpack the Uncertainty:

   • What are the 2-3 biggest unknowns that could impact your outcome? (e.g., “Will the market accept it?”, “How will competitors react?”)
   • Can you assign probabilities to these unknowns (even rough ones)?

3. Map the Paths (Decision Tree thinking):

   • What happens if you choose A, and then Factor X happens? What if Factor Y happens?
   • List all possible outcomes for each path and their potential value/cost.

4. Consider Scenarios:

   • Instead of predicting one future, imagine 2-3 very different, plausible futures. (e.g., “Best Case,” “Worst Case,” “Muddle Through”).
   • How does your chosen strategy perform in each scenario? Can it survive the worst case?

5. Look for “Options” (Flexibility):

   • Can you make a smaller, reversible investment first? (Option to delay/learn)
   • Can you build in a way to scale up if successful, or exit cheaply if it fails? (Option to expand/abandon)

Golden Rule: Don’t predict the future; prepare for multiple plausible futures.