Dan Arens

Former Secretary of State Colin Powell, had a particular approach when faced with making a quick decision. He called it the 40/70 rule. He would strive to not make a decision with less than 40% of the information needed, then ultimately make the decision when he had at most, 70% of the information. The ability to make the right decisions under any set of circumstances is an underrated skill that is often overlooked by many business leaders who want to grow their companies.

If Powell realized that time was of the essence and he would probably not be able to gather one hundred percent of the information he needed to make a completely informed decision, he had to draw the line when he acquired a certain percent of the information. Hence, 40% was the minimum amount he needed and 70% was the maximum amount of information to decide.

Powell went on to say, “When you have about 70% of all the information, you probably ought to decide, because you may lose an opportunity. My own experience is that you get as much information as you can and then you pay attention to your intuition, to your informed instinct. Sometimes what my analytical mind says to me is not what I’ll do.”

While the 40/70 rule of decision making is good for use in time sensitive scenarios, other, more traditional methods are used in other situations.

In the traditional approach to decision making, most people have learned to use what is commonly known as the business approach. First, clearly and concisely:

-Identify the problem: One method used is the 5 W’s technique for problem identification. When you have a problem ask Who, What, Why, Where, and When. As you go through each ‘W’ you should end up with greater clarity in defining your problem.

-Consider Alternatives: Make a list of possible solutions that would resolve the problem. Many times, groups are used to help develop a good list of possibilities.

-Develop a Recommendation: Having looked at and reviewed the alternatives, thoroughly analyzing each one for timing, costs, and resources. Then choose the best alternative.

-Implement the Recommendation: Begin the implementation of the decision in a manner that aligns with the necessary timing to solve the problem you identified, using the available resources you have at your disposal.

In a recent article for Inc. Magazine, author Jeff Steen suggested a new approach to quick decision making. He called it the 5 Minute Ladder Rule. Using the analogy of a ladder with four steps, Steen suggested writing down the following information, ‘rung by rung’.

For the first rung of the ladder, there are two questions to ask yourself:

“Will this decision have a measurable or noticeable impact on people, company, or society? Is this decision time-sensitive?” Steen’s approach is very straight forward. If the answer to both questions is ‘no’ then it is not necessary to proceed. If either or both of the answers are ‘yes’ or ‘maybe’, then you enter the decision ladder and proceed to the second rung.

When you are on the second rung of the ladder, according to Steen, “Give yourself space and time to focus on the decision. Set aside five minutes to concentrate solely on the decision you need to make.”

The third rung of the ladder is when all the alternatives and results are quantified and written down. Steen says, “On a piece of paper, define each option in one sentence. Keep it brief and stick to what you know (facts and verified observations). Next to each option, write a single sentence describing the likely outcome.” The approach he suggests allows you to create a visual map of the process and should bring more clarity.

The fourth rung is used to provide you with the opportunity to identify the best alternative. Steen also suggests that you select the second best alternative and prepare to use it if your primary alternative is not viable, for whatever reason.

One of the keys to any decision making model is the discipline it instills in the approach. Once you take a framework approach to decision making, the more you use it over time, then the more disciplined you will become.

While the 5 minute ladder rule is analogous to the more traditional business approach method, one model might resonate more with the decision maker, than the other. The key is making the right decision at the proper time for your company.

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