Your Product is Decisions

For many people in the world of non-tangible products (finance, IT, HR) Your Product is Decisions.

Make the process you use to make decisions consistent and you have a better chance, according to Daniel Kahneman.

This podcast from Farnam Street with Michael Mauboussin is filled with gems about just that.  As a sidenote, the podcast is quite hard to listen to because the recording quality is just dreadful, but I’m persisting because of the quality of the ideas. It will send me back to his first interview.
Here are some I wrote down in the train as I was listening to the podcast.
  • insurance adjusters assessing cases, with procedures: expected 5 – 10% variance but in fact there was 40 – 60% variance between them – even with a process
  • less variation with knowledge workers if they use “1st answer is the algorithm”, and then you can use discretion (gives them volition)
  • intuition is a great way to make a decision where the environment is stable and linear (chess, accounts receivable), but they must have the opportunity for training and feedback (deliberate practice)