Business decisions in the presence of uncertainty at a tech company
Imagine you are a product manager at a tech company. One of your key responsibilities is to decide which new products and features to develop. This involves making decisions in the presence of uncertainty, such as:
- Which products and features will be most popular with users?
- How much will it cost to develop and launch each product or feature?
- How long will it take to develop and launch each product or feature?
- How will the market change over the time it takes to develop and launch each product or feature?
To make these decisions, you can use a variety of tools and approaches, such as:
- Market research: You can conduct market research to learn more about your target users’ needs and preferences. This can help you to identify promising product and feature ideas.
- Data analysis: You can analyze data from your existing products and services to learn more about how users are using them. This can help you to identify areas where there is room for improvement.
- Customer feedback: You can collect feedback from customers to learn more about their needs and preferences. This can help you to validate your product and feature ideas.
- A/B testing: You can use A/B testing to test different versions of your products and features with real users. This can help you to learn which versions are most effective.
- Scenario planning: You can use scenario planning to identify and assess the potential impact of different future events on your business. This can help you to make more informed decisions in the presence of uncertainty.
Example:
Imagine that you are considering developing a new product feature. You have conducted market research and analyzed data from your existing products and services. You have also collected feedback from customers. Based on this information, you believe that the new product feature is likely to be popular with users.
However, you are still uncertain about a few things. For example, you are uncertain about how much it will cost to develop and launch the new product feature. You are also uncertain about how long it will take to develop and launch the new product feature. Finally, you are uncertain about how the market will change over the time it takes to develop and launch the new product feature.
To help you make a decision, you can use the following tools and approaches:
- A/B testing: You can create a prototype of the new product feature and A/B test it with a small group of users. This will help you to learn how users react to the new product feature and to identify any potential problems.
- Scenario planning: You can use scenario planning to identify and assess the potential impact of different future events on the development and launch of the new product feature. For example, you could consider the impact of different economic conditions, technological advancements, and competitive developments.
By using these tools and approaches, you can make more informed decisions about which new products and features to develop, even in the presence of uncertainty.
Other examples of business decisions in the presence of uncertainty:
- A retail company deciding how much inventory to order for the upcoming holiday season.
- A restaurant deciding how many tables to staff on a busy weekend night.
- A manufacturing company deciding how much to invest in new production equipment.
- An airline company deciding which new routes to offer.
- A pharmaceutical company deciding which new drug to develop.
Conclusion
Business decisions in the presence of uncertainty are a fact of life. By using the right tools and approaches, companies can make more informed decisions and reduce the risk of making mistakes.
