An Aid to Adapting: Adopting the 70% Rule
By Marc Weiss - CEO, Management One
Last month I wrote that Adaptability is the New Normal. It does require courage to adapt. However, there are heuristics or rules of thumb that can make change less challenging and aid in quicker decision-making.
Our lives have felt like an endurance test to perform well under stress and pressure over the last 3 years. External threats have been an endless series of waves, as one subsides the next one emerges. It has felt like we are in a perpetual trial by fire. Okay, I’m mixing metaphors - endurance test, waves, and fire. I stand by them all.
One way to manage this stress is to adopt Jeff Bezos’s famous 70% rule. Make decisions based on 70% of the information you think you need - because if you wait until you have 90%+ of the required information, you’ll be too slow and all you’ll really accomplish is to stress yourself out even more.
Knowing you are not going to get all the information frees you to make decisions. Also, recognize that there is no hard and fast rule on what is 70%. The takeaway is to gather as much information as you need to get to about 70%, in the time frame you need, and move forward.
We have seen a wide range of decisions by retailers over the last year. Some retailers sought to capture market share, went deep on their purchases to drive revenue in what they saw as a once-in-a-lifetime opportunity to catch the rebound and take advantage of weakened, hesitant, or lost competitors. Some were influenced by recent memories of a shutdown and inventories they were sitting with on April 1, 2020 and did not want to be in that position again. Others were enjoying the ride of selling through everything they landed and were willing to risk chasing and being ok if they could not get the goods.
If you adopt the 70% rule, remember you still have levers to push and pull. The beautiful thing about planning is it provides most of the 70% of the info you need as a retailer and is also a progress monitoring tool to measure the success of your decisions - thus allowing you the space to change based on evolving conditions.
The key is not to have analysis paralysis and overthink. When I was a kid my mom told me I thought too much. She said, ”Marc, make a decision and act on it. From there you will know what to do.” That is still some of the best advice I have ever gotten.
For more insight on the 70% rule, check out Nabil Alouani’s short article in Medium, which unpacks this concept very well.
Onwards and Upwards.
Marc