In the Anthropocene, science and mathematics are increasingly used to support all manner of claims that are otherwise easily refutable. Thus, economics, for all its uses, sometimes blinds us and leads us astray. So it is with the idea that perfect information is possible in business– within markets and beyond.
Even if we ignore the information asymmetry of markets, we cannot ignore the role of information in organizational decision making. Without a doubt, all sorts of information are necessary for management to make decisions effectively, assuming that informed decisions are always better than random ones.
While this is generally true– the more informed the better– taken to an extreme, many decision-makers enter a state of paralysis waiting for perfect information. This may be partly in the belief that perfect information is possible and partly an aversion to taking on risk when faced with limited information.
But in business, as in life, decisions often have to be made based on the best information available at a given point in time. It helps to understand that even something as seemingly reliable as sight, sound and (perhaps) memory is actually subject to interpretation by the brain. That is, it is practically impossible to experience objective reality– only a simulacrum constructed by each of our brains, prone to variation and not wholly reliable.
So, too, with the information we use to make decisions in a business context– information which is often the result of interpretations by multiple brains, as well as being subject to loss of fidelity in transmission from person to person before it reaches a decision maker.
All this to say that even when we believe we have perfect information, we most likely do not. And thus any decision always has a margin of error. It is easy to overlook this margin when things go right, to forget that it is simply the working of probability, as opposed to our own prowess or the information that was used.
This doesn’t, of course, mean that there is no point in seeking more information; it just means that we need to ask intelligent questions, test our assumptions and once we have done so, make the best decision we can at any given moment. While doing so, we need to be cognizant of the margin of error and be forgiving of mistakes; as well as being open to learning from them without resorting to blame or scapegoating.
Ultimately, being a good leader and decision-maker is not about being perfect, it is about understanding when information– or anything else– is good enough.
Don’t let the perfect be the enemy of the good.