Making Better Decisions
To order shelter-in-place, or to stay open? Reduce loss of lives, or loss of livelihoods? When I think about these impossible choices that leaders have had to make during the pandemic, it reminds me that making decisions is both art and science.
As PMs, we may not be making decisions that impact humanity at that grandest scale, but we are constantly making decisions that impact our users. Sometimes, they are small decisions - such as when an engineer asks you to clarify whether the value inputted into a field needs to be stored in a history table. You might ask what the impact of storing the history of the data point is, but you can’t foresee every future usage of such data, so you make the best call that you can, with the information that you have. All of this happens within two minutes in the middle of your daily standup meeting.
Other times, they are bigger decisions - like should you prioritize building a feature that is expected to increase customer satisfaction right away or building a new feature that can possibly grow revenue next year? These roadmap decisions are hotly debated by your cross functional partners, with the customer success team advocating for customer satisfaction drivers and your GM pushing for top line revenue growth. Ultimately, you commit and set the product roadmap, but sometimes you still wonder if you made the right decision.
You can make a good decision and have a bad outcome. You can make a bad decision and have a good outcome. You control the decision, but not the outcome, because the outcome is a combination of luck and skill. Therefore, just looking at the outcome, or “resulting” as Annie Duke calls it, won’t improve your decision making skills. You have to focus on improving your decision making process.
Disclosure: This post contains Amazon affiliate links. That means that I may earn a commission if you make a purchase through one of these links (at absolutely no extra cost for you). These funds help me buy my next cup of Philz which, in turn, fuels me to write more blog posts.
The first step to making better decisions is accepting that you need a balance of intuition and data, art and science.
The more you make decisions, the better your intuition gets. In fact, your intuition can get so good that “decisions made very quickly can be every bit as good as decisions made cautiously and deliberately” as Malcolm Gladwell states in his book, Blink. Making decisions isn’t pure science, because intuition helps guide you to what’s most important.
So how much data and how much intuition do you need? Colin Powell uses a 40-70 rule. It’s very simple: get 40-70% of the data, and then use your gut. What’s less straightforward is defining what 40% or 70% of data is.
For me, I can tell what % of the data I have based on how I’m feeling about the decision.
At 40%, I feel like “eh, it could go either way”. If you have less than 40%, then you’re trusting your gut too much and your chances of success are riskier.
At 70%, I feel uncomfortable. I have most of the data to get the general picture right, but those few details that I don’t have are making me sweat.
At 100%, I feel confident. I’ve dotted my i’s and crossed my t’s and know that it’s the right decision. However, if you have more than 70%, then you’re waiting too long to make your decision and wasting time. In other words, don’t wait for perfect information. Make decisions with imperfect information.
Finally, apply the 40-70 rule to the type of decision you’re making.
Is it high stakes or low stakes? Low stakes decisions are reversible, so you should make this decision quickly and be empowered to make this decision as the PM. You should target getting 40% of the data, coupled with some intuition, when making low stakes decisions.
High stakes decisions are irreversible or very hard to reverse, and you have to be really careful and deliberate about making this decision and bringing your stakeholders along. Is it high urgency or low urgency? If something is high urgency, then it’s better to make any decision than no decision. You should target getting 40% of the data and have strong intuition, when making high stakes, high urgency decisions.
If something is high stakes and low urgency, then taking a little more time to get to the right decision is better than making a decision right away. You should target getting 70% of the data, coupled with strong intuition, when making high stakes, low urgency decisions. If you don’t have enough data to make the decision, then think about how you can either get more data or how you can reduce the stakes so that you need less data to make the decision.
You can make better decisions by applying this simple framework to understand if you have enough data and intuition to make the decision. If you want to learn even more about decision making, here are some additional resources that I recommend:
Video from my talk about this topic at the Women in Product Conference
The Biggest Bluff, by Maria Konnikova (Full disclosure: I haven’t read this one yet, but it came highly recommended by friends so it’s on my list to read soon.)
🗞️ Subscribe to my newsletter
I write about once a week about topics like product management, design thinking, becoming a better leader, and personal branding. By subscribing to my newsletter, you’ll get these insights emailed right to your inbox every time I post.
📹 Reflect with me on Friday Flashes
Friday Flashes is a series of quick one-minute videos that introduces a topic of reflection for the week. Each prompt is product-focused and ties back to one of the ten disciplines in the Product Decagon.
🛒 Get your copy of The Productive Product Manager
The Productive Product Manager is a guided journal that combines the weekly reflection with weekly review and other goodies. You can see the inside of the journal in the Friday Flashes announcement video. Don't worry - the journal is not dated, so it's ok if you don't start at Week 1.
