The 80/20 Rule For Decision Making

Leadership:  Use the 80/20 Rule for Decision Making

As a manager or leader in your organization, you make many decisions.  However, do you always have all the information you need or want when the time comes to decide on a course of action or choice?

The answer to this question is most likely no.

As you already know, I’ve been involved with management and leadership issues for over 30 years now.  And it is obvious to me that most, if not all, people don’t have all the information or data or inputs that they would like to have when making a decision at work.  In fact, I would go further to say that our decisions are almost always made on the basis of incomplete information.  Think about the times you have purchased a car…

How comfortable were you when buying a car?  Did you know everything about the car?  Did you feel completely sure about the purchase?  You see, most of our large purchases involve incomplete information.  In fact, sales people know this and make sure that you and I don’t suffer from “buyers remorse” or the feeling of making the wrong decision.  So sales people may send you a small gift after the purchase to help you feel good about the action you just took.  Does the same kind of thought strike us with decisions at work?

Most of us second-guess our decisions.  That is normal.  So what is my point with this?

We need to realize that decisions are made with incomplete information and that we need to gather about 80 percent of the data in order to make an informed decision.  In other words, it is highly unlikely that we will know everything possible before making the decision.  Therefore, once you hit the 80 percent level, make the call and go on.  There will be about 20 percent of data out there that make take too long to gather.  So the question becomes one of how much data or information is enough to meet that 80 percent level?

Perhaps set an “information target” before making the decision.  Determine what is critical or important when it comes to the situation.  Gather the inputs that your really need to make you comfortable with the decision.  In most cases, your intuition will be your guide and help you know when you have enough input.

The great managers and leaders knew this concept.  Remember from your history lessons how people in the past had to make tough calls without all the information.  Those famous people knew that only 80 percent of the information would be sufficient to guide them in the process.  Waiting for the final 20 percent wasn’t worth it.  Time was of the essence in most of those cases too.

So in making your decisions tomorrow and later, get to the 80 percent level, then make the decision and go on.  This way, you will not suffer from “paralysis by analysis” as you go about your daily decisions.  Good managers and leaders know this concept-now you do too.