We are comfortable making decisions based on a variety of inputs, including opinions. In the absence of data, we’re even comfortable making decisions with opinions as the sole input, as long as these opinions are believable.
Running a company is about How We Make Decisions rapidly.
Even more, making decisions faster than your competitors is arguably the only sustainable competitive advantage, on the one condition that you learn from these decisions. No one will make all of the right decisions all of the time so it’s much better optimizing for fast decision making and learning than optimizing for making the right decisions.
Now, the % of decisions you get right out of the gate does matter. If you can be right from the beginning half of the time that’s way better than if only 10% of your initial decisions turn out right. And that’s where it gets hairy.
What do we base decision making on at Awell to maximize the % of decisions where we are right, without compromising on speed of decision making?
In an ideal world, you have 100% information and can make data-driven decisions all the time. But there are some problems with this:
We can go on but the above should be sufficient to point out why it’s futile to exclude anything else but data and information based on data for decision making.
An additional point is that we only have one brain, with limited processing capacity. Imagine you need to take a decision and you have perfect information, but that perfect information consists of one billion data points. You’ll never be able to hold all of those data points in your head. More and more research shows making decisions with the gut is not just acceptable but enables better, faster and more accurate decisions.
Therefore, for all our decision making we should be comfortable taking other inputs into account. These can be qualitative external input such as interviews with customers, but also our opinions, intuition and gut feel.
Popular opinion (pun intended) in high growth companies is that opinions are bad. But as we argued above, there will never be perfect information and there will always be some degree of opinion involved. Instead of seeing opinions as black sheep and trying to ban them, we should recognize they are a natural element of decision making and identify what’s behind them so we can incorporate them into our decisions.
People with experience in a particular domain have accumulated insights and knowledge that are not captured by data. We hire people with a specific experience and expertise exactly because they can shortcut the decision making process. Their opinions are based on this wealth of learnings so they become believable opinions.