The 70%-90% Law

Published by Lex on

I don’t if it is a law or just a guideline but Jeff Bezos has said that if you wait until you have 90% of the information needed to make a decision then you have waited too long. If you have less than 70% of the information then you don’t have enough information to make a decision.

This guideline is just what we need. No matter how much we know, can we really know it all. And even if we did know it all, chance still seems to play a role in everything.

Even a 100% certainty can fail to materialize sometimes. So how you make good decisions in the world of less than perfect information.

Scenario planning around the areas where information is more uncertain is probably a good place to start. Having a plan for more than one potential outcome will help in multiple ways. It will improve your overall thinking and it will help you make better decisions in the course of events.

Of course, even scenario planning is an information management activity. How many people need to be involved in this activity and how much detail needs to be shared.

Somewhere between the two default answers, everyone or just a narrow band of leaders, is probably the correct answer.

Using the 70/90 guide is probably useful in this context as well. It probably informs just how many people are needed to come up with 70% of the possible scenarios. While you can’t know 100% of the outcomes upfront, it feels like you should have a good feeling for a majority of them. Using that same logic, it is probably good to have the majority of your group aware of what could possibly happen.

The main idea is to have an idea of how much information is enough to take action. This number may vary depending on how difficult it would be to reverse course or change a decision. The higher the consequences, the more input would be needed.


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