[Leadership laws] The law of Goldilocks

Don't wait for "perfect" on important innovation decisions: 40 - 70% certain is the best you can seek.

[Leadership laws] The law of Goldilocks

Strategic decisions have a “Goldilocks zone” of just-enough certainty in which you should decide, as U.S. General Colin Powell found.

It always matters. But for credible innovation work, that Goldilocks zone between 40 and 70% certainty makes all the difference.

Stay in it for your important decisions!

The Goldilocks zone …

In his book My American Journey, Powell included this among his lessons learned:

"Part I: 'Use the formula P = 40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired.'

Part II: 'Once the information is in the 40 to 70 range, go with your gut.'"

It mostly stands on its own. The only thing worth adding because it is not included in this core quote is that exceeding the approximate threshold of 70% on important questions takes long enough that, in Powell's experience, others would beat you to the decision before you reach it.

… and what it means for innovators

At the highest level, the “output” that innovation teams produce for their organizations is knowledge, or insight, if you must.

But the question is: “how much knowledge?” How much de-risking and discovery?

Turns out, we can’t get to “full” understanding. We have infinite options for what to do. And so do our competitors and other participants in our space, like regulators, suppliers, and channel partners. Compound that over multiple moves, and you have a dynamic system, where every change produces more change.

In other words, innovation is not a “problem” that you can “solve.”

That truth means that we can’t de-risk every assumption. And for the assumptions that we choose to de-risk, we can’t do so fully.

Remaining risk is a built-in feature in ambiguity.

The trick then is to choose a degree of understanding and certainty that suffices without delaying us so much that others leave us in the dust.

This is where General Powell’s rule of thumb really helps us.

is it precise? No, not remotely. Is it “proven” to be “right?” Also no.But it offers us enough guidance to help:

  • Less than half-certain must suffice: The “40%” part of the law points out just how much remaining uncertainty we must tolerate. This certainly matters for the leaders who decide. But it also matters for teams and stakeholders: Cut your leaders a break. If they must decide at such low levels of certainty, they will be wrong a good bunch of the time. It’s a feature, not a bug. Expect it, and support leaders in their decisions anyway.
  • We don’t have forever: The “70%” of the law reminds us that every space that’s interesting has more than one competent team pursuing opportunities. It’s simply impossible to wait until we have certainty. What interests me about this part of the law is Powell’s wording for what it signifies. It may not mean that it’s “too late.” You may still “win” if you don’t decide. But it does mean that the decision is out of the our hands. It’s now up to luck and to others’ mistakes. You are no longer an agent in the decision. Note that this can be legitimate. You can’t lead on every topic. There are infinite ones of those too. That’s why an element of the Credible Innovation system is “Selectively Awesome Craft,” for example.

How to use it

This one is simple: Triangulate it with thought partners!

"40% certainty" is not an objective metric. What matters is that you and those who matter around you are on the same page.

Each one of your thought partners has a different gauge for their level of certainty in important decisions.

Discuss with them what your collective certainty should be. Don't "average." Discuss.

Aim for a collective "40% certainty."

Reach a level of consensus at which everyone who matters might say: "I can live with that. Even if I disagree personally, I can commit."

Then decide, move on, and course-correct if you turned out to be wrong.

Further reading

18 lessons, including the 40-70 rule, from Colin Powell's book, via GovLeaders.org

Colin Powell's book, My American Journey, at Powell's publisher's site

“Colin Powell” Wikipedia article