Making Better Decisions
Most of us are flooded with information in today’s world. It’s no surprise: today’s information systems are capturing and digitizing more information EVERY DAY than has been collected in the entire history of the Library of Congress.
Schoolchildren with a basic knowledge of how to construct google searches are able to access detailed information about arcane subjects that would have been unthinkable just a few years ago.
When I was earning my MBA (in the dark ages of the early 80s), the core mantra in almost every class was avoidance of snap judgements. The first thing to determine was how long the ultimate decision could be delayed, so as to use the maximum amount of time to gather all salient facts. More facts (more data) could be used to make better decisions. So, with all this data available on which to base decisions, today’s decisions must be the best in the history of mankind – right?
Welcome to the world of ambiguity. We have more information to slice and dice, and we do slice it and dice it in almost infinite ways. But rarely does all of that information actually point to an obvious “correct” decision. Instead, the flood of information is usually ambiguous, and a focus on the flood can simply result in drowning in data.
In my venture investing business, I have been privileged to get to know quite a few scientists at NASA, and I have interacted with them in evaluating new technologies. They have convinced me that the key to making better decisions – and making them quickly – is not gaining access to more information. They have taught me that the key is paring down the information to a small amount of the right information.
Less is more, but only if the “less” is the correct “less.” Stated another way, the most important attribute is not a strong ability to research, but rather good judgement.
Reams and reams of detail are always available, but the meta-data that digests that detail and presents trends are what matter. Finding the right meta-data almost always depends on the judgement that comes from experience.
If we ever needed experience and good judgement in the management of the general economy, it is now.