Today I’d just like to talk to you a little bit about decision making. All of us make decisions all the time, and major decisions quite often and we depend upon data in order to make those decisions.
But here’s something that I’ve learned over time, it is much better to be approximately right rather than accurately wrong.
Yes I know it’s an oxymoron or actually a couple of oxymorons.
How? – Well let me explain what I mean.
When I was working at Nokia we used to use extensive Excel models to model our customers requirements. And it was a reality that quite often, once the customers implemented a solution, we’d find that it’s pretty accurate with where the models were.
But then there were quite a few occasions, given the number of parameters that went into the model, that we would make a wrong assumption. And when we do that, what a good data model means, actually, is it could be way off from what we intended.
This led me to the conclusion that is so much better to be approximately right rather than accurately wrong.
While data is important to making our decisions, it’s even more important to understand what the impact of those data points is on the decision that we would make. So rather than go for an extensive 100-person conclusion based on data, you should be looking at maybe something like 20% input of the data and 80% based on your experience, on your gut, on what you understand the rest of the parameters to be. That’s what makes a good decision from a bad decision.
You want to know what the impact of data would be rather than whether the data itself is accurate, especially when you’re dealing with predictions, because data is never accurate.
So here’s again how to look at data when you’re making decisions;
- Yes I agree data is important, you need to collect as much information and data points as you can.
- Look at what the variation of any of those data points would do to the overall results of outcome of the decision.
- Use your gut to balance the data with your own experience and with experience from other people.
So at the end of the day, be approximately right, know you are in the ballpark before you make the decision, rather than try to be accurate to an extent where you could get to be accurately wrong.