Jeff Bezos: Decide with 70% of the Information, Otherwise You Are Slow!

Every year Jeff Bezos shares a letter with Amazon shareholders addressing his ideas, concerns and plans. This year’s letter had four key decision making tips for all professionals. Below is an excerpt of his letter dated April 17, 2017 on these tips[1]. In his letter, Bezos argues that most decisions should be made with about 70% of the information you could gather. If you wait for having 90% of the information, in most cases, you’re probably being slow.

High-Velocity Decision Making

… You have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations. The senior team at Amazon is determined to keep our decision-making velocity high. Speed matters in business – plus a high-velocity decision making environment is more fun too. We don’t know all the answers, but here are some thoughts.

  • First, never use a one-size-fits-all decision-making process. Many decisions are reversible, two-way doors. Those decisions can use a light-weight process. For those, so what if you’re wrong? I wrote about this in more detail in last year’s letter.
  • Second, 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. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.
  • Third, use the phrase “disagree and commit.” This phrase will save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?” By the time you’re at this point, no one can know the answer for sure, and you’ll probably get a quick yes. This isn’t one way. If you’re the boss, you should do this too. I disagree and commit all the time.
  • Fourth, recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision.

Jeffrey P. Bezos
Founder and Chief Executive Officer, Inc.

Click here to read the entire letter on The Amazon Blog.

[1]: Bezos, Jeff, 2016 Letter to Shareholders, Company News, The Amazon Blog, About Amazon, April 17, 2017

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