Imperfect Information
It took me a while to understand that executives and entrepreneurs make decisions based on imperfect and incomplete information every day.
As a high school and college student—and later as an engineer—I was trained to believe that most problems had a correct answer. Mathematics, chemistry, and physics were governed by established principles. Statistical process control could help identify variation, test assumptions, and improve outcomes. If I studied the problem and gathered enough data, my experience was that the answer would eventually reveal itself.
Business leadership taught me something different.
The Decision
I remember the first time I was in the room with the CEO of a Fortune 200 company as he considered a proposal I had helped develop. My team and I had done extensive analysis - we had analyzed the data, considered alternatives, and prepared a detailed pitch with our recommendation. I expected the CEO to work through that analysis before making his decision.
He didn’t even read my whole report - instead, he considered several factors that could not be reduced to a spreadsheet: the likely response of the capital markets, the effect on employees, the return on investment, and the risks of acting—or failing to act. Then he made the decision, trusting the work, the recommendation, and the people presenting it. That surprised me, but I came to understand that this was not careless decision-making, it was executive decision-making.
The CEO’s responsibility was not to know every detail that we knew. His responsibility was to determine whether the recommendation was sound, weigh it against considerations beyond our analysis, and decide whether the organization should move forward.
The Myth of Complete Information
As an executive I learned that senior leaders rarely have the luxury of complete information. Customer preferences and competitors change, employees needs and the organization evolves and capital is often limited. Even the best forecasts rest on assumptions about a future that no one can predict with certainty.
Waiting for every fact may feel prudent, but waiting also has a cost. Opportunities disappear, problems grow, and organizations lose momentum. The executive decision-making goal is not to eliminate uncertainty, it is to make a sound decision in the throes of uncertainty. It requires analysis, but it also requires judgment, belief in the team and a willingness to act.
Over the years, I have developed several principles that guide my approach as an executive decision maker, coach and board member:
Define the Problem
Before trying to find an answer, make sure you are solving the right problem. Teams can spend enormous amounts of time producing excellent answers to poorly defined questions. I have learned to slow down at the beginning and ask:
What problem are we actually trying to solve? A clear problem produces focused analysis. A vague problem produces activity.
Same Data. Same Decision
The people closest to the customer often have the most useful insights.
Senior executives may have a broad view of the business, but they do not necessarily have the clearest view of the customer experience. Frontline employees, franchisees, salespeople, operators, and customer-service teams see problems and opportunities that can be invisible from the executive office. Authority sits at the top of an organization, but insight is distributed throughout it.
Good leaders create ways for that insight to travel – and my experience is, when armed with the same data as executives, leaders closer to the customer will make the same decision, and faster than the chain-of-command can muster.
Get to 80%
Good analysis is essential, but I have seen many teams get caught in ‘analysis paralysis’
In many business situations, having roughly 80 percent of the available information is enough to make a responsible decision. While not a universal formula - as surgeons, structural engineers, or rocket scientist require a very different standard - in business, the final increment of information often takes disproportionate time to obtain and does not materially change the answer.
At some point, the value of additional analysis becomes smaller than the cost of delay.
The more reversible the decision, the more comfortable I am moving quickly. If the decision can be tested, measured, and adjusted, speed and quality of execution may create more value than additional study. For decisions that are difficult or impossible to reverse, the threshold should be much higher.
Give Me Something to Say Yes To
When someone brings me an idea, I often say: “Give me something I can say yes to.”
I am asking the person to do more than describe a problem or present a collection of facts. I want an actionable recommendation. What do you believe we should do? Why? What will it cost? What are the risks? What would success look like?
A clear recommendation makes it easier to evaluate an idea and helps develop future leaders who are capable of exercising judgment rather than merely providing information.
Teach As You Go
My role as a leader is to establish clear outcomes, define appropriate boundaries, make the necessary resources available, and then trust capable people to do their job. When appropriate, I often use decision-making as a developmental opportunity - sharing how I reached a decision. I explain which facts mattered, which risks I considered, what tradeoffs were necessary, and why I chose one path over another.
This does not mean every decision requires a lengthy defense. But explaining the thinking behind important decisions helps people understand the organization’s priorities and prepares them to make better decisions themselves. A leader’s decision can solve one problem, but explaining the reasoning can strengthen every decision that follows.
The Lesson on Purpose
My engineering background taught me to respect facts, test assumptions, and value disciplined analysis. Business leadership did not require me to abandon those lessons, but it did require me to recognize their limits.
Business decisions are rarely black and white. The data are incomplete, the consequences uncertain, and the competing interests difficult to compare. Even so, the boss is ultimately responsible for results and the decision-making process that led to the results.
The best executives are not those who always know the right answer. They are those who define the problem clearly, listen to the people closest to it, study the available evidence, understand the risks, trust their teams, and recognize when it is time to act, decide and go.