Do not seek more information to make a decision - there is no perfect decision

When in the process of making a decision, seeking more information has diminishing returns. Diminishing returns means that the more information you seek, the less valuable it becomes. For most decisions in life and business, the amount of variables and information at play is too large for us to factor in our decision-making “equation”. There are factors we don’t know we don’t know. So, we satisfice when making decisions. We pick the best option based on our current resources and the information available. We know, if we look within, that there are tradeoffs we make and heuristics we employ in order to make the decision. And we need to be ok with that, because getting all of the information needed may turn into a life-long endeavor in itself.

Sometimes, decision-making is also constrained by time—say, for a military commander during a battle, or the executive board during a cyber security attack on the company. That can be bad and good. It can be bad because when there is a time constraint and the decision is high-stakes, you risk letting emotions take over and make the first decision that comes to mind, driven by your sense of panic. It can be good because of Parkinson’s Law: work expands to fill the time allocated to it. If you manage to establish order in the process of decision-making under time constraints, you may optimize your satisfice decision, picking the best choice you can given the circumstances.

And when enough information is gathered for you to make up your mind with a high degree of confidence, it is time to embrace your choice fully. Especially in time-constrained situations, there is no space for haphazardly moving forward; decisive commitment is required at all levels. Everyone involved in the action (e.g., your military army, your employees) needs to be informed of the vision and their role in it with the utmost clarity. This is what general Stanley McChrystal also points out in this conversation on the Knowledge Project podcast.

And there is also the aftermath of decision-making. A decision doesn’t stop when you make the decision. A decision continues until the situation for which you are deciding ends. That’s because as you commit to the decision and move along the action curve, you get feedback on your decision. And feedback empowers you to adjust your course of action. You can incorporate feedback into your mental model of decision-making and course correct along the way with the highest level of humility and receptivity possible. Because you don’t even know what you don’t know, many times. What you see is all there is, as Daniel Kahneman puts it in Thinking, Fast and Slow. Seeking more information before making a decision has diminishing returns. Being highly receptive to feedback during execution and adjusting your position along the way can have positive compound effects (or negative ones, if you confuse noise with signal).

Thank you for reading this weekly reflection. For any questions or if you want to chat, feel free to reply to this email.