Step 6.4 aims to assess and prioritize finance solutions. Detailed feasibility studies and technical proposals (Step 6.5) will be drafted for the selected solutions, to ultimately be included in the BFP. The prioritization process needs to be accurate and credible. The priority given to each finance solution should be based on desk reviews and analysis, expert interviews and ideally a prioritization workshop. A two-step selection process is suggested with a rapid screening (Step 6.4A) and a more detailed assessment (Step 6.4B). Figure 6.2 visualizes the selection process, i.e. the identification of a subset of priority finance solutions for which detailed technical proposals will be prepared.
Figure 6.2: Prioritization of Proposed Finance Solutions
Based on lessons from the BIOFIN Process, we recommend the following:
Box 6.5: Cognitive Bias in Decision-Making
When selecting, prioritizing and screening finance solutions, be aware of biases that commonly influence people’s decision-making.
Bandwagoning, for example, is the tendency to adopt the same beliefs as the people around you, or to assume that people are making the right decisions and follow that. This could bias the results in a consultative workshop assessing people’s perception about finance solutions. Good information and evidence are the best prerequisites for good decisions but even with those, decisions can be biased.
Confirmation bias is the tendency to favour information that conforms with your existing beliefs and discounting evidence that does not.
Availability heuristic is people’s tendency to place higher value on information that comes to mind quickly despite no systematic research.
Similarily, anchoring bias occurs when people focus too much on a single piece of information rather than all available information, typically the first, most recent or the most emotional information piece of information received.
When considering different finance solutions and evaluating their appropriateness, we risk outcome bias, which occurs when people tend to evaluate a choice based on its outcome rather than the information available at the time of the decision.
Similarly, the pro-innovation or anti-innovation bias is the tendency to believe something is good (or bad) simply because it is new. When we assess and screen finance solutions we should do it based on their merits and potential to solve the identified problem, not because they are new or old.