I was thinking about a phrase that US general Colin Powell used in his autobiography. He called it the “P40/70″ rule. It’s a formula to help leaders in battle determine when there’s enough evidence to take action but I think it absolutely applies to digital decision-making too.
The thinking being that if you have less than 40% probability of making the right decision with the amount of information you currently have, then you should seek more information. But how much more? Powell’s theory is that if military leaders decide to wait until they have enough information to give them a greater than 70% probability of making the right decision, they are likely to make the wrong decision *because that decision will be too late*. The battlefield conditions will have changed.
And so it is in digital.
In this fast paced environment, you will never have 100% of the information you need to make decisions. Change can happen so quickly that by the time you get the figures the goalposts have moved again. New competitors have entered the space, new devices have altered consumer behaviour, new, unexpected technology has changed the game.
I remember one acquaintance of mine who started working for some very prominent internet billionaires. After a meeting about some new ideas he asked them if he should go away and model the commercial impact of the ideas out on a spreadsheet. A typical next step if like him you had come from a massive US media company run by MBA types.
But the answer he got back from said internet entrepreneurs was simple. “No point”, they said. “You can’t model disruption”
No one could have predicted that Friendster would be trounced by MySpace. No one - even really clever people like Rupert Murdoch - predicted that MySpace would be overtaken by Facebook. And none of us can predict the future either.
Just get enough information to make a decsion with 40-70% probability of being right. The rest is down to experience, intuition and (say it quietly) luck.
Loading ...
links for 2008-02-07 25 Jan 2008
Report[...] Knitware Blog - Is Digital Media Like War? “You can’t model disruption” — “Just get enough information to make a decsion with 40-70% probability of being right. The rest is down to experience, intuition and (say it quietly) luck.” (tags: digital strategy tactics decisions do) [...]