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The 40 70 Rule For Making Decisions

Written by: Noah Learner Tags: critical thinking, newsletter, data

Published: Feb 13, 2026  |  Last Updated: Feb 13, 2026

I'm sure you've heard of the 80/20 rule, but have you ever heard of the 40/70 rule?

Colin Powell is famous for his decision-making principle that you should not make decisions with less than 40% of the information you need, because it's not enough to reduce risk.

But on the other hand, he argues you shouldn't make decisions with more than 70% of the information you need. In our quest for certainty, we muddy the water, and then lose the window to a team that moves faster.

The distance from 70% to a sound decision, is intuition: Get just enough information and then trust your gut.

The role of intuition

A study in the Harvard Business Review suggests that high-velocity decision-makers are not necessarily those with the most data, but those who use "real-time information" to build collective intuition. This aligns with Powell’s belief that once you hit that 70% mark, your gut instinct, fine tuned by your experience, can bridge the gap to a 100% confident decision.

In the intelligence community, this is frequently compared to the OODA Loop (Observe, Orient, Decide, Act), where the goal is to cycle through decision-making faster than your opponent.

Operating within the 40-70% sweet spot builds organizational momentum, which Powell argued is often more valuable than being right every single time, but too late.

Why this matters now

Last week we talked about how data will always be directional at best, and when we aim for powerful we often miss and land in the "overly complex." When we aim for perfect certainty, we often land in analysis paralysis, a state where the cost of further investigation outweighs the benefit of the data gained.

Powell argues that waiting to cross that 70% threshold often leads to a high "opportunity cost," where the delay of waiting completely erodes the early mover advantage. 

The only thing we know right know is that things are changing fast and so is our understanding of it. If your instinct lately is to trust your instincts, on top of a few key pieces of data, then you're more likely to keep your bobsled on track then stumbling over mechanics that are bound to change.

Ask yourself

1. What's a decision I've been waiting on because I think I don't have enough data?
2. What am I waiting for? How significantly would my decision change with this data?
3. What is the cost of waiting? What is the cost of missing the window?
4. What does my gut say? How has my gust treated me in the past on these kinds of decisions?