Jeff Bezos explains the perfect way to make risky business decisions

[kitrose]

The lede really stuck out to me:

"Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow"

At what point is the information you have available for a key decision enough? You always want more.

This exactly mirrors a MAJOR decision-making framework taught in the Marine Corps--we actually call it the "70% solution."

All of our warfighting doctrine is built around the principle of rapid and decisive action, but the problem is you're in an uncertain, rapidly changing world where there are opposing actors operating around you and you never have all the answers. They emphasize in officer training that a key limiter is being paralyzed with uncertainty and wanting to wait until more information is available, and that you must actively counter this feeling. Indecision is a decision (and often the worst one).

I have personally found this one of the most difficult and perpetual factors I've encountered in both military and civilian careers. It's interesting that Bezos espouses this principle.

[hxta98596]

Nice comparison. I'm also familiar with "70% solution". One thing to add: officers, and hopefully business leaders, are taught how to build a theoretical list of what approximately 100% of the information, questions and answers might be...That way you know what 70% is in reference to. This is taught and one can easily memorize the checklists of decision making questions (it's a mnemonic device).

To see why this matters imagine: Are we looking for 70% out of 5 questions? or 70% of 10 questions we have? If you think you only need to answer 5 questions before making a decision and answer 4. That's 80% and you would go...But if there are 10 questions to ideally check off before deciding and you only answer 4, that's way too low and dangerous. This is dangerous in the military and in startup land. Knowing the full list of questions to ask is more important than knowing the answers.

Lastly, both Amazon and the military have huge structures, plans and support teams in place to encourage 70% as an OK threshold. Imagine if you have air support you can call in the marines should things go wrong, or you have your parents couch to crash on if your startup fails, those things would help a person be comfortable going on only 70% of the information.

[fgimenez]

I like to borrow from the decision theory field. There are massive frameworks around the "value of information" or "value of clairvoyance"[1].

The best summation of their framework is "Make a decision when the probability of new information changing your mind is minimal."

Of course, we need to quantify "new information" and "minimal", but it's a good framework to consider what new data points would change your existing course.

[1] http://lesswrong.com/lw/85x/value_of_information_four_exampl...

[AndrewKemendo]

My favorite must-memorize Patton quote that sums this all up is:

"A good plan, violently executed now, is better than a perfect plan next week."

[matwood]

> They emphasize in officer training that a key limiter is being paralyzed with uncertainty and wanting to wait until more information is available, and that you must actively counter this feeling. Indecision is a decision (and often the worst one)

Analysis paralysis happens frequently with analytic types of people.

[RichardHeart]

https://en.wikipedia.org/wiki/Optimal_stopping

[Consultant32452]

Based on the results of the last 15 years of foreign policy it seems like we're working from far less than 70% of the information. :(

[ValleyOfTheMtns]

How do you even know what % of information you have?

[oskarth]

I really like that this is an example from the real world. In the real world, people have skin in the game and their decisions matter. In the military field, of the boots on the ground variety, this distinction is crystal clear. People can die from the wrong decision. What happens if your Decision Framework Theory is wrong? Most likely nothing.

If Bezos didn't develop this heuristic himself - through his own risk taking - I wouldn't be surprised if he got it from something like the Marine Corps.

[psyc]

This is very valuable. My overall impression is that many people tend to be maximally risk-averse, regardless of scope. For example, rejecting a course of action due to fixating on a single unlikely thing that could go wrong. Rather than holding out for a choice that comes with no anxiety, I believe it's better to work on not being anxious.

[BurningFrog]

If you structure things so you can change or revert your decisions later, it is also much cheaper to start executing them with not that much information.

Not always possible, of course, but once you start thinking in those terms, you can get good mileage out of that habit.

[SnacksOnAPlane]

Louis CK has adopted this rule: http://lifehacker.com/use-louie-cks-70-rule-to-avoid-decisio...

[typetypetype]

> Indecision is a decision (and often the worst one).

This is a great guiding philosophy!

[eevilspock]

See the *Secretary problem": https://en.wikipedia.org/wiki/Secretary_problem

[agumonkey]

It's a bit like speed of light, you can't reach it.

[thr0waway1239]

>> This exactly mirrors a MAJOR decision-making framework taught in the Marine Corps--we actually call it the "70% solution."

This is ironic.

Taken as an entire group, people who go to fight for their respective countries are routinely lied to, rarely have the full picture of the motives of those who are sending them out to fight, and end up causing destruction which is completely disproportional to the amount of knowledge they possess.

As the saying goes, the first casualty of every war is the truth. Besides, is the 21st century war, where one side drops bombs on a technologically hapless group of people via UAVs, actually a level playing field from which you want to learn business principles?

[cwyers]

Given how much of success is luck, I try and play a game whenever I see successful people asked "how to be successful" where I try and 'spot the overfitting.' Is this really what made you successful? Or is this just what you wanted to do, and because you were successful, you think it has to be why you succeeded because of course your success was earned?

[WalterBright]

When the odds of success are favorable if you keep playing, eventually you will win, even if each individual event is luck.

For example, is it luck that the Vegas casinos make money on gambling? Nope, even though the outcome of each individual hand is luck.

Many people who are successful went through repeated failures to get there. They never gave up.

[seibelj]

Love the "disagree and commit" part. Perfectly encapsulates the situation where "I'm convinced this is a bad idea, but I'm going to trust you and support you."

[ardit33]

As I worked in amazon previously and know this first hand, you can translate it to: "Shut up, and do as be told".

It is a very top down hierarchal type of company, and engineers usually have little influence in general, and often are kept in dark on key decisions. Disagreeing in general is seen as a nuisance. A lot of it would disappear if managers gave concrete details on why a decision was made, but it usually takes a skilled manager to do that, and Amazon, as a large company, has a combination of good managers and plenty of not-so good ones.

[ams6110]

he [Bezos] notes, when you disagree and commit, it's not about holding an "I-told-you-so" over other people's heads. It's a chance for people to hear an opposing point of view but to move ahead with action

I actually can't see it as anything other than a (potential) "I-told-you-so." Why are you specifically highlighting that you disagree, if you are then giving the go-ahead? You are the boss. If you approve something, ultimately it's your responsibility.

If you really trusted the person you would give them full authority on the decision without dropping your own agreement or disagreement into the mix.

[tbirrell]

I read about all the crap Amazon employees have to deal with. So it's hard to view anything this guy does in a good light. IMO, anyway. I wonder how much this philosophy contributes to the horror stories we hear out here.

[AndrewUnmuted]

The horror stories don't resemble anything that I experienced during my five years at Amazon. I think they're largely propagated by NYT and friends because Amazon out-competed them in their own space.

Amazon is the best run company I ever worked for. By far.

[mrslave]

Funny, I've heard some of them too and they only made me want to apply there! I haven't given it too much thought but Jeff Bezos is probably one of the industry leaders I admire the most. ducks

[KaiP]

That seems more like a values thing than a process thing. I doubt that this process would produce terrible work conditions if Amazon actually cared about their employees well-being.

[eclipxe]

Take what you read with a grain of salt. Amazon can be an amazing place for some and horrible place for others. The horrible stories are more interesting to tell and stick with you but doesn't make them the rule.

[tellingya]

Bezos might have got this from Colin Powell's 40/70 decision rule. http://integratedleader.com/articles/40-70rule.pdf

[rrggrr]

The % of information missing versus the importance of the missing information... between the two I've learned the hard way that you wait for the right information. Perhaps Bezos way works well for capital rich companies, or it could be my instincts aren't great. I only know that every time I rush into a decision I pay more that I should and often have regrets.

[matwood]

I don't see waiting for 70% rushing at all. The point is that there is always another piece of information, so if you're waiting for the impossible 100% you'll never get anything done.

[vermontdevil]

I thought of OODA Loop (Observe, Orient, Decide, and Act)

https://en.wikipedia.org/wiki/OODA_loop

[squozzer]

In principle, the ideas sound great. In practice, the biggest decisions seem to have high switching costs (e.g. home purchase), by design, to reduce flexibility.

So it might prove useful to pursue courses of action that provide maximum flexibility.

[dmitripopov]

The big problem is that the majority of people with 70% of information will go into f*ckup 100% certain. You need to have a talent of some sorts to make right decisions or at least reversible ones.

[bronz]

this is some self-help guru type of bullshit.