From the course: Decision-Making Strategies

Assessing distinct possible outcomes

From the course: Decision-Making Strategies

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Assessing distinct possible outcomes

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- In situations where there are distinct, possible outcomes involving more parties in the decision-making process is going to help you handicap the odds of each outcome and assist you in contingency planning for whatever's going to happen. Let's look at an example. Imagine you're launching a new product where there's a lot of demand for it, but the product is highly regulated, and we have a political election coming up in a couple of years. Now there's two parties that can be elected, party A or party B. If the candidate from party A is elected, they're likely to pass regulations that will be favorable to your product. If the candidate from party B gets elected, they're likely to pass regulations that are unfavorable to your product. So there are two distinct possible outcomes here. But the result of that outcome is going to have a dramatic effect on your product. So how can you reduce the ambiguity around this and contingency plan appropriately? You may look at midterm election results and analyze political maps to see which party is more likely to be elected. You can do some market research on the features of that product and look at features that might be harmed or eliminated if one party is elected, or features that could be promoted in the marketplace if the other party is elected and see what the result might be on your product sales. You could do market research on features you could replace in a product that would cause fewer political issues. So knowing that you have a distinct set of two possible outcomes here, you can build your contingency plans now so when that ambiguity gets resolved later, you know which path to take and what decisions to make at that time. So if you find yourself in a situation where the ambiguity is a set of distinct possible outcomes, the critical thing you need to do is look at each of those outcomes and put in place contingency plans, so when that ambiguity gets resolved, you know what actions you're going to take.

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