Decision Quality and Information Quantity

Decision quality IS NOT directly related to information quantity and quickly reaches a point of diminishing returns in complex environments.

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Running a contracting business is considered a “complex environment” with many variables completely outside your control so this is an important concept.  This DOES NOT mean that information does not matter when making decisions. 

Leadership Tools: Decision Quality, Information Quantity and Confidence.

In an engineering calculation with known variables the more you can account for the more accurate the engineering calculation becomes.  You can and should become MORE CONFIDENT in your calculation.  

Think about playing poker where you have both luck and skill involved.  In this situation more information will only yield better results up to a point and beyond that the only thing that goes up is your confidence in the decision. 

The CIA discusses this with intelligence work where analysts have to make probabilistic predictions about ambiguous situations with incomplete data.

NOTHING is more DANGEROUS than a high degree of confidence in a decision that only has a 20% probability of being right.  That is what causes people to stick to bad decisions instead of pivoting quickly.  

What matters more is making the best decisions you can then checking the results frequently making adjustments as necessary.




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