Unlock Predictive Genius

How simple algorithms can revolutionise decision-making.

When attempting to predict performance — whether it’s the success of your next distributor partner, the best person to join your team, or the right market to enter —
it’s common to rely on instinct or mental calculus. But is your approach helping you make the best decisions?

Many business leaders don’t realise how easily cognitive biases, noise, and inconsistency creep into decision-making processes, affecting the predictive validity of their evaluations.

You might reply that you’re experienced, and that you’ve made many successful judgments in the past, but wouldn’t you seize the opportunity to make even better decisions if you could?

The Challenge: Combining Multiple Factors in Your Mind

Predicting future performance often involves juggling multiple factors: market reach, past performance, financial stability, and so on. In theory, this sounds straightforward, but in practice, humans struggle to combine complex pieces of information consistently. Instead of an objective process, decision-making can become clouded by biases, such as:

• Overweighting recent information (e.g., a recent meeting with a candidate).

• Letting irrelevant details affect judgment (e.g., the color of someone’s suit).

• Failing to evaluate all options consistently (e.g., relying on “gut feelings”).

• Internal noise (e.g.,personality traits that lead you to make overly positive or negative judgments).

This mental juggling act doesn’t just complicate your decision-making — it reduces predictive validity, as you will fail to weight all the multiple factors consistently across the various partners you're assessing.

Here’s how simple algorithms, also known as decision rules can revolutionise how you predict the future and make decisions.

Combining information in the mind doesn’t just complicate your decision-making — it reduces predictive validity.

The Solution: Simple Algorithms

Research in decision-making and psychology has repeatedly shown that predictions made by combining information through a decision rule or algorithm is typically as, if not more, accurate than without. Even better, these rules don’t have to be perfect to be effective. Scientists have know for years that even the most basic ones can significantly improve predictive validity.

This includes non-optimal algorithms where all the different sources of information are considered equally important. In other words, by assigning the same weight to all the variables you’re evaluating to identify the most suitable partner, you can already expect improved predictions.

The fact is, by incorporating straightforward rules to weight and combine data, you leave much less room for human biases, noise, and other sources of error related to inconsistencies.

Unfortunately (or fortunately, depending on your mindset), this type of approach is largely underutilised in practice. By incorporating it, you can outperform season decision-makers and experts by leaving much less room for human bias and inconsistencies.

How Open Latin America Can Help You

At Open Latin America, we specialise in helping businesses like yours take the mental gymnastics out of evaluating partners. Here’s how we can support you:

• Developing tailored decision rules: We work with you to identify the most critical factors for your distribution strategy and create a simple, effective framework for evaluation.

• Teaching you the science of decision-making: Through workshops and consulting sessions, we’ll show you how to combine data optimally and avoid common pitfalls in judgment.

• Custom tools for ongoing success: From simple scorecards to more complex decision rules tailored to your unique needs, we provide the tools you need to make more consistent and error free judgments.

By combining the right methodology with our expertise, you’ll gain confidence to make data-driven decisions that will drive success in Latin America.