Wednesday, July 27, 2022

The 40-70 Colin Powell decision rule


Colin Powell had a 40/70 doctrine for senior leader decision-making, which held that if you make a decision with only 40% of the information, you are making it prematurely, but if you still haven’t decided by the time you have 70% of the information, you are no longer in control of events.

-from WSJ 7.26.22

Of course, if you know how to calculate the 40% and 70% you know all the information that is necessary or available. The basic dictum is that you need some information but not all the information available to decide. Gathering more information takes time and money, so you must learn to make do with less than perfect information.

You will never have all the information you think you need. In fact, studies show that having more information will not improve accuracy but only confidence. Try and decide with less to take some action. However, plan to have an exit strategy if you are wrong. Make decisions faster, learn from your successes and failures, and repeat the process as a feedback loop.  See More information does not lead to improved accuracy.

This decision framework is consistent with the Bezos Rule for planning. If you have 70% of the information you think is needed, decide. See The Bezos "70 percent rule" for decision-making.


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