Making Decisions With Incomplete Information

Colin Powell reportedly used a rule he called the 40/70 formula: don't make a decision with less than 40% of the information you'd ideally want, but don't wait for more than 70%. Below 40%, you're guessing. Above 70%, you're stalling.

I think about that formula a lot, mostly because it gives a name to something I've watched friends and colleagues struggle with for years -- the belief that just a little more research, one more conversation, one more data point will make the right answer clear. It almost never does. At some point the information-gathering stops being helpful and starts being a way to postpone the discomfort of committing.

What you actually need to decide

For most decisions, you need three things. Not ten. Three.

Clarity on what you value. If you know your priorities, ambiguous situations get a lot less paralyzing. You don't need to predict every outcome. You just need to pick the option that best aligns with what matters to you.

A realistic sense of the downside. Not every possible catastrophe -- just the plausible worst case. Can you live with it? Can you recover? If the answer to both is yes, the decision is probably safe enough to make.

A willingness to course-correct. Most decisions aren't permanent, which means the real question isn't "is this right?" but "am I willing to stay alert and adjust if it turns out to be wrong?"

Untangling the unknowns

When you're stuck in the information-gathering loop, try writing two lists. What you know. What you don't know. Then for each item on the "don't know" list, ask two questions: Could I learn this before I need to decide? And would it actually change my decision?

If the answer to either is no, that unknown is noise. Cross it out.

What's left is the real information gap, and it's almost always smaller than it felt before you wrote it down.

Inaction has a price tag

We tend to notice the costs of action -- the wrong job, the bad investment, the relationship that didn't work out. We rarely notice the costs of inaction because they're invisible. The application you never submitted. The conversation you kept postponing. The months spent deliberating that could have been spent living with the choice and learning from it.

Imperfect action usually beats perfect inaction. Not always, but more often than most people assume. The map will never perfectly match the territory. At some point you just have to start walking and pay attention to the ground beneath your feet.